Economy Poised to Surge
It’s probable that the worst of the recession – the part that’s at the bottom – is over. Other countries are posting signs of economic recovery, too. Germany is experiencing a rebound of significant proportions with recent headlines touting that a) shoppers are spending again, b) Deutsche Bank is reporting “surprise” gains, and c) German prices fall for the first time in 22 years. Unfortunately, the three marquees of which we’re most familiar in the USofA, Daimler-Benz and Porsche and BMW, are suffering 25% revenue declines; similar to what our Big Three are experiencing. As is Honda and Toyota. But, overall, Germany’s economy appears to be on the significant rebound. Their automobile manufacturing performance is inextricably tied to our economy.
That being said, we are seeing some signs of spending being increased across the country, such as purchases of existing homes and new housing starts. The good news here is that sales are generally up about 11% from last year. The bad news is that the median home sales price is down nearly 50% from last year. The good news is that people are spending, even if it’s for bargain-basement values. Still more good news is that median prices of existing home sales are up 3% this year.
Howsomever, no jobs yet; at least not in the millions as predicted by Pres O. When will they come? I prognosticate that the recovery will launch the next phase of the rebound in October of this year. Why? Jobs are the last segment to respond to a recovering economy. In my mind, the sequence of a recovery is: 1) consumer confidence, which 2) drives sales of durable goods, which 3) urges more manufacturing, which 4) increases sales and profits, which 5) encourages investors, driving stock market prices up, which 6) encourages financial institutions to lend more buckeroos to both businesses and individuals, which 7) creates jobs, which 
increases consumer confidence and spending, ad infinitum; a good cycle. Unfortunately, all portions of the cycle are inter-dependent; when one collapses, all collapse. An 1936 comedy song chorus ended with, “… the music goes round and round and it comes out here.” (listen to the originator, Nat Gonella and his Georgians, here: http://www.youtube.com/watch?v=uj6jEPNkBq0
Businesses will begin to cycle their atrocious sales and profit results beginning in September of this year. Because businesses make most of their comparisons to Last Year results, This Year’s results will legitimately improve; see #4 above. We’ve already travelled through #’s 1-3. In October-November, #’s 5 and 6 should increase, resulting in #7 … and then we begin again.
On this day in history: 1958 – NASA was created by Congress passing legislation to establish the National Aeronautics and Space Administration. Although the Soviet Union was the first to put a man in space, the USofA bested them by putting men on the moon on July 20, 1969. The rest, as they say, is history.
On a positive note: Pay attention to what your pets are trying to tell you. Especially if it is an unexpected and unusual behavior. Mary Phillips’ Maltese poodle began to lick her temple furiously. Mary went to the emergency room where they discovered an aneurysm.
Blessings.