Open Thread

WASHINGTON (MarketWatch) — Ben Bernanke, the chairman of the Federal Open Market Committee, seems to be at odds with his colleagues about how strong the economic recovery may be next year.

The official FOMC forecast calls for healthy growth next year and robust growth in 2011, but the chairman of the Federal Reserve has his doubts that a depression can be averted.

jasetheace…..that was cool!!!!!

benson….I see a lot of the florists now offering stems of cherry blossoms. Have you ever been in Japan for sakura, the cherry blossom season? So beautiful especially along the palace.

BRG;

I am with you! The scenario you write about above is a neurosis that seems to be gripping many upper-middle-class suburbs. My brother, who lives in an upscale NJ suburb, did the same thing with his kids, as did his entire social circle there. Folks were having their kids take the SAT prep courses at the age of 10!!!!

It is amazing to me because I came from a blue-collar background, and my folks didn’t even know what a SAT was, never mind a prep course. Yet we did alright. It never dawns on my brother – an executive with a major financial company – that he was able to work his way up, in spite of the fact that he and I started out with few advantages.

Moreover, I feel sorry for these kids, as they are put under tremendous pressure. It amazes me to think back that when I was a kid, my parents were actually concerned – in old Brooklyn style – that I have adequate free play time with other kids. I tended to be a shy homebody when I was a kid. My folks were always telling me to “go out and play with the other kids”. Nowadays, when I see kids from upper middle class backgrounds, I feel sorry for them in that their time is completely structured with SAT prep courses, the ubiquitous soccer leagues, etc.

The streets of Brooklyn are also not the same as when I was a kid. During a nice summer day, the streets would be teeming with kids making up their own games.

Signs of Life: Irwin Keller, Marketwatch

PORT WASHINGTON, New York (MarketWatch) — Although you wouldn’t know it from the behavior of the stock market, the economic outlook is turning just a bit less gloomy.
Prosperity may not be just around the corner, but a growing number of statistics suggest that the worst of this recession may soon be over.
And before you inundate me with emails alleging that I am out of touch with the real world, let me say right at the top that I am not for one moment saying that the economy has stopped sliding. I am only suggesting that it appears to be contracting at a slower pace.
Clearly, this has nothing whatsoever to do with the stimulus package that the president signed into law last week. As a matter of fact, if the recession does end within the next few months, it will probably be in spite of this package, rather than because of it.
If you want a policy to credit, it’s monetary policy. The combination of liquidity that the Federal Reserve has pumped into the economy, along with its special lending programs and capital injections into the banks, is largely responsible.
But you want more than assertions; you want proof, so here it is:
1. The Conference Board’s index of leading economic indicators has risen two months in a row;
2. Producer prices have increased for two straight months;
3. Consumer prices rose in January — the first monthly gain in six months;
4. The Baltic Dry Index, which measures the cost of shipping key raw materials like copper, steel and iron, has more than doubled from its recent lows;
5. Existing home sales rose in December and participants in our weekly survey think that another rise took place in January;
6. Pending home sales went up in December;
7. Builders’ confidence inched up this month;
8. Thanks to lower interest rates, applications for both new mortgages and refinancing existing mortgages are rising;
9. Real hourly earnings rose 4.5% in December following a 3.3% increase in November;
10. An index of consumer expectations rose in January;
11. Retail sales shot up by 1% in January — the first monthly rise since June;
12. The decline in consumer credit moderated in the latest month;
13. New orders for consumer and non-military capital goods went up in January;
14. The ISM index for manufacturing went up last month;
15. The ISM index for services rose last month for the second month in a row;
16. The money supply is soaring, a sign that there’s plenty of liquidity in the economy;
17. The 3-month London interbank offered rate, a measure of the banks’ willingness to lend to each other, has dropped to 1.2% from close to 5% a number of weeks ago;
18. Other measures of the state of the financial markets, like the TED spread and the 2-year swap spread are down as well;
19. Prices of credit default swaps for banks have fallen from their peaks;
20. The corporate bond markets are thawing out as well; some $127 billion in dollar-denominated debt was issued in January, the most for any month since last May;
21. Some securities on banks’ books are starting to recover in value.
All this said, the economy is still a long way from a pink-cheeked state of health. But remember, you’ve got to crawl before you can walk and it looks like the economy is about to do just that.
Irwin Kellner is chief economist for MarketWatch