It's been three months since these weekly blogs started and I thought it might be interesting to revisit the first one, which dealt with a ridiculous idea that was presented to get readers smiling as they absorbed daily doses of bad economic news. It's been three months since these weekly blogs started and I thought it might be interesting to revisit the first one, which dealt with a ridiculous idea that was presented to get readers smiling as they absorbed daily doses of bad economic news. I introduced the DABometer Recession Gauge, designed to give a completely unscientific view of the daily state of economic and financial news that crossed my computer screen.
It is simple in concept--just count all the economic, financial, and business news items and stories that appear on my screen each day to see if these are positive (good news) or negative (bad news).
In the first few weeks the news was generally negative; that is, on balance more bad than good news was being generated. But slowly, as the weeks went by, the shift was to neutral, at least over a five-day-week period, and then, gradually positive, to the most recent days when it has been definitely positive.
Note, the measure is how I see the news, so that the current deluge of dispatches from and about Detroit are, I consider, positive as long as they deal with the survival of these companies. After all, the alternative to the bankruptcies would be disastrous. Now mind you, behind the Detroit news lurks a raft of bad news for suppliers to the auto industry, but for now, the news about their pending problems has been overshadowed by the General Motors/Chrysler headlines. I imagine that once the settlements are made the readings could shift to the negative as the reports start to come from those who monitor Detroit's supplier industries.
But on the whole, setting auto aside--and that's a hard thing to do--the news is better than it was in March and April. I don't know your political leanings, but you have to admit that all the activity by the current administration in Washington is having some effect, if nothing more than morale building. Setting aside politics, it looks like the end of this mess we are in is beginning to be visible--the only disagreements coming from the cognoscenti concern during which quarter this will happen.
Two months ago I couldn't find a serious reference to a bottoming out or upward turn. Today the news has one at least every day and a learned body of economists, who always are responding after the fact, have overwhelmingly decided the recovery start can be by the end of this year. The only obnoxious fly in the ointment is some body of "experts" who are self-appointed official arbitrators of the beginning and end of recessions. And they are stubbornly holding out for no relief for many quarters--I don't pay them much attention because they were the ones that announced the recession had started a year after we all knew it had.
So take a deep breath, readers. The end is now coming into focus, even though we all know, and are constantly being told by the hedgers including the President, that bad news will continue for some time. But many of the key indicators are up, or at least neutral, and the DABometer has a definite swing to the right, so much so that I am inclined not to check it every day.