I have to say this trading week I awoke with a serious increase in optimism overall in my home life. I remain decidedly more guarded in my trading portfolio however. My friends over at Pragmatic Capitalism would remind us all to be a little more optimistic about the US economy. While I would have to disagree with their suggestions as to what looks good in the US, I decided I ought to come up with a few facts or figures to rally around myself.
5 Things Americans Have to Be Optimistic Coming into the End of Q3
- Obama’s proposed jobs bill. No, it is not as big as it needs to be, but it does represent at least some small expansion of Government deficit – which is something needed today until consumer credit expansion resumes
- Consumer credit deleveraging is in its third year of balance sheet repair. While it would be nice if the Congress would throw a little money at household balance sheets (jobs? paging the jobs bank, hullo!!!), at least the Fed can be said to doing everything in its power to drive lending rates down. Now if we could only get the government to BORROW a little more…
- As previously mentioned, personal borrowing rates for credit-worthy borrowers remain at historic lows. Those people who missed the last round of refinancing opportunity in Sept-Oct 2010 can now take another swing at it in 2011.
- Proposed / in progress investigations into improprieties perpetuated by the mortgage lending industry. No, technically it’s not good for the economy. On the other hand many Americans want to see some bankers get what’s coming to them. While not particularly good for the banking sector or the stock market, psychologically, it may be just what the doctor ordered to restore a little consumer confidence in “the system of Justice.” Government officials who underestimate the desire for Justice (with a capital J) amongst the American people do so at their own peril (read elections 2012).
- While we haven’t seen really robust numbers from the sales books overall, there have been bright spots here or there – so at least some segments are able to sputter along. Further, while the recent jobs numbers have been abominable, the numbers in the first half of the year weren’t so bad. Having a few bad hits on the jobs numbers now may spur the Congress to do the right thing and ease fiscal policy for a little while longer – at least long enough to get themselves re-elected.
There you have it, five things I can say that are positive for the market outlook. Yes, I had to do a little back-handed twisting to find silver linings in a couple of serious clouds – but hey, I could have said, “At least we’re not Germany who is stuck with Greece and France!” …but that just would have been cruel.
Happy trading today!