Chin Up in the Downswing

positive economic news during recession

More Analysts See “Sunlight” and “Green Shoots” in Financial Sector

May 18, 2009 07:00 PM
by Anne Szustek
Observers keep saying the economy’s dreary days are coming to an end. Backing up those claims are strong regional bank numbers and Wall Street’s overall rally.

Orszag: “Some glimmers of sun”

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Peter Orszag, the White House’s budget director, became the latest economic observer to voice confidence in the economy’s rebound. “There are some glimmers of sun shining through the trees, but we’re not out of the woods yet,” he said yesterday on CNN program “State of the Union,” as quoted by Reuters.

His comments parallel recent remarks made by a number of top economists and financiers, including Federal Reserve Chief Ben Bernanke and JPMorgan Chase CEO Jamie Dimon (profiled in the May 8 edition of “Chin Up in the Downswing”); like Orszag, Dimon has also used a “light” metaphor to describe the economy.

“Green shoots” latest metaphor to be replayed

The other of those two economic gurus, Bernanke, used the term “green shoots” in March to describe the country’s economic recovery. Now, CEOs of regional banks are adopting the metaphor to describe new growth in lending, thanks to a revival in the housing market. Chicago Bank CEO Steve Calk told CNBC that some regional retail banks are seeing more access to funds for mortgage lending. “It’s green sprouts just like springtime in Chicago,” he said in an interview with the business news network. Harris Simmons, the CEO of Utah-based Zions Bancorp, also voiced hope for the housing sector, although like some of the other market observers profiled in the May 8 installment of “Chin Up,” said that he sees recovery happening over the long term, perhaps in 2010. 

Market Inflection Sparks Investor Reflection

Writing for financial news and info site Seeking Alpha, Bespoke Investment Group reports that following the end of Wall Street trading on Friday, the markets approached an inflection point that could be the sign of bullish markets for the next few months; Bespoke supports that hypothesis with today’s strong market performance.

Other investors have noticed the rebound, too. But to them, the market rebound has been bittersweet, as they pulled large portions of their financial nest eggs out of stocks and into less risky CDs, bonds and cash. "They know that in hindsight, it wasn't the best thing to do," Cincinnati-area financial adviser Lucas Hail told The Wall Street Journal. "But it was what they had to do emotionally. Math and the mind don't always add up."     

Neither do crises of confidence.
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