Always look on the bright side of life!
Any market prognosticator worth his salt must include a gut check or play devil's advocate to avoid missing early warning signs that change is afoot. Taking this attitude with me to the East Coast last week, I found at least ten signs that an economic recovery may be on the way:
10. International cooperation and potential bailout: We could argue whether bailouts consistently lead to better relationships, but I saw one instance where it is highly likely. Two Aussies just off the plane from Sydney at 10:00 in the evening were playing hacky sack and getting quite rambunctious with a very lonely and quite inebriated New Yorker who had an unspecified accent. Though I soon retired to my hotel, I'm almost certain a bailout for one of these active drinkers would be necessary, creating the potential for much closer relations.
9. Tight labor market (for artists, no less!): When coming out of past recessions, I recall one of the earliest signs was a lower quality of service across the board. As the labor market tightens, employers are required to dig lower and lower into the competency barrel to find acceptable candidates. The Stevie Wonder cover band performing in the bar referenced in point 10 is a prime example. To say they lacked both rhythm and soul is akin to saying Joran van der Sloot lacks both manners and common courtesy.
8. Tight labor market II: The band was so bad management projected the Lakers-Celtics game behind them in big-screen fashion apparently to get people to stay. (Corollary indicator: When the bass player answers his phone during a song, I call that a "sign." And yes, the band was so bad — making this indicator so strong —that it deserves two spots on our roster)
7. Increase in leisure travel: In the airport there were flights posted from "Northwest Arkansas" direct to NYC. A quick review of the major travel sights revealed no such place or airport exists. I presume these flights are not full of business travelers.
6. Sold-out New York performances: During my stay, I had cause to walk through Times Square four times (something I enjoy greatly as an avid people-watcher). I was surprised to realize by the end of my trip that I had not been accosted even once by comedy club ticket hawkers (or the naked cowboy, thank goodness!).
5. Transportation boom: A colleague arranged a car service for me, explaining the legendary difficulty obtaining a cab between 4:00 and 6:00 pm. A former New Yorker myself, I've always found this to be false. Setting out to prove my coworker wrong, I decided to count the cabs for hire during my 30-minute wait for the car service. Total tally: 0.
4. The Turkish are bailing out the bankers: This same coworker and I had dinner one evening and when the bill came there was no charge for our drinks. When we asked, our Turkish waiter stated simply "No charge for the beautiful lady...and you."
3. Another sign from the music world: Bell Biv Devoe is scheduled to play at BB King's blues club in near Times Square on July 16. For those of you born in the '90s, Bell Biv Devoe was a successful, though briefly so, "boy band" in the '80s. My guess is they aren't boys anymore. If people are willing to spend money on these guys....
2. Inflation at the airports: My ticket would have been $1,200 more had I chosen the direct flight rather than suffering through a very brief one-hour layover in Chicago. Though I believe my time is valuable, $1,200/hour may be a bit steep.
1. LaGuardia still exists.
Current economic development still lacks significant signs of inflation as producer and consumer prices for the month of May declined. On a year-over-year basis, core consumer prices are up 0.9 percent, which is one of the quietest performances since 1966.
Housing starts in May declined to a 593,000 per year pace, down 10 percent from April. Though the percentage decline seems large, the industry is been running at less than half the 1998 – 2005 average pace since the summer of 2008.
Both the Philadelphia and New York area manufacturing surveys declined in June, perhaps taking a well-deserved respite after projecting significant positive growth for some time. Challenges in the employment components of the Philadelphia index may indicate the strengths in last month's employment report (including an extended workweek) are temporary.
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