Where did those Green Shoots go?

The health of our economy is no longer being measured by our ’green bills’, but by the abundance (or absence) of ‘green shoots’. Federal Reserve Chairman Ben Bernanke was quoted a while back saying that the economy wasn’t exactly healthy but he did see ‘green shoots’. He was referring to the little signs of life that will drive us out of a recession and into a recovery.

The debate is ongoing whether the green shoots were destined to grow into flourishing plants or parasitic weeds. Optimistic investors drove the stock markets up nearly 40% in a three month period. I even bought into it (Of which I’ve seen a 100% return on my money… no complaints, btw). But now the markets have seen four straight losing weeks and the overall feeling seems to have changed. Consumer sentiment has fallen, which is important since consumer spending is a driving force of our economic health. Home sales are mixed (but mostly up) at much lower prices. Unemployment is nearly 10%. One out of every ten people is unemployed. Fear is setting in…. we thought the bottom was here but it’s only getting worse, right?

Wrong!

You need to step back from the situation and really look at it. Things are bad but they also aren’t going to turn around overnight. The declines are still there but they are pulling back. Everyone is being overly cautious and rightfully so. Businesses are not going to hire new workers even if their business is picking up. It’s smarter to be a little more conservative the usual. The unfortunate problem that happened is people were overly optimistic about the green shoots and sentiment shot up to fast. There was never enough supporting data to back a 40% rise in the market.

However, the market has reached it’s unofficial bottom of this recession back in March. It’s been shown (through the use of charts, stats, and geniuses) that the market bottom usually occurs 6 – 9 months before the end of the recession. That would put recovery in place somewhere around the 4th Quarter. That sounds right to me?

Now, I’m not an economist so do not come back to me in December if the end to the recession is not officially declared. But it’s also been shown that the end of recessions are directly correlated to the peak in the four-week average of new jobless claims, which we saw (so far) a few weeks back.

And if you really know me we can all agree that I’m a very laid back guy. I don’t let much bother me and I like to look at all sides of an issue before forming an opinion. Maybe I’m wrongfully brushing off the recent lackluster data. But no one’s expectations are high anyway. There’s still some mess that needs to be cleaned up.  You need a job but that company isn’t going to hire you unless they make more money. They don’t make more money until you spend money on their products. You don’t want to but their products because you don’t have a job. It’s a vicious cycle that takes time to work out.

I guess my point is that you can’t get down if times are hard. Giving up is never an option. There should always be something that keeps you going even if you feel beaten down, and if you don’t have that already, find it!

 Be grateful for your family, friends and loved ones. Be happy you have your health. That you have a roof over your head and shoes (or flip-flops) on your feet. You hear it everyday, but learn to really appreciate the little things you have. Did someone do something nice for you recently?… pass it on. It’ll go a long way. Keep a positive attitude and the pieces will fall into place.

“The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.”

-Dr. Martin Luther King Jr.