So many economic indicators, so little time... Let's see: New home sales, up slightly month-to-month (yay!) but still at historic lows and down 34 percent from a year ago (boo!). Durable goods orders surprise economists with a seemingly robust month-to-month jump, (yay!) but a key component -- non-aircraft business orders -- is down, again, (boo!). Weekly initial jobless claims fall more than expected, providing yet another encouraging sign that we are past the peak for new claims (yay!), but continuing claims break another record for the 17th straight week, indicating that unemployment overall is continuing to rise (boo!). Mortgage delinquencies and foreclosures hit new records (boo, boo, booooooooo!!!)
Further complicating matters, the yield on ten year Treasury bonds spiked very high in trading on Wednesday, raising all kinds of apocalyptic fears about whether the U.S. government will be able to afford all the borrowing necessary to pay for bailing out banks and stimulating the economy and keeping interest rates low. But on Thursday the trend reversed itself, sending big sighs of relief shuddering throughout the markets.
What can we make of all this? No question, the U.S. economy is a long, long way from healthy. The glimmers of hope -- durable goods, a possible bottoming out in the housing sector, a slowdown in job losses -- are fragile in the extreme. It's ugly out there.
And yet: I just finished reading "House of Cards." William Cohan's excellent account of the rise and fall of Bear Stearns (of which readers will be hearing more later, after I finish Kate Kelly's new book on the same subject.) And what struck me most is how truly tumultuous and chaotic the year 2008 was, compared to 2009. Huge financial institutions failing left and right...armies of bankruptcy lawyers and federal regulators and investment bankers pulling consecutive all-nighters as they struggled to plot a way forward over the next 24 hours...vast uncertainty in the financial markets...the prospect, at several junctures, of imminent systemic collapse. Few people alive in the Western world had ever seen anything quite like it.
This is not to suggest that we are out of the woods, by any means. But the challenges facing us now: possible inflation, how to bankroll deficit spending, growing unemployment, the restructuring of General Motors, et cetera, seem like familiar bogeymen, when compared to the unfathomable mysteries that pummeled us last year.
I consider that progress!
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