Tuesday, January 20, 2009

The Great Depression - fading?

The economy must be on the verge of perking up -- I have only seen four references to The Great Depression this morning. That is a dramatic improvement compared to the past couple of months. And one of those references was actually simply saying that people are getting tired of constantly comparing everything to The Great Depression.

Granted, our economic future is contingent on the Federal Reserve and the incoming administration making a lot of wise decisions, but that is the way it always is.

The overall economy is "the sum of all curves." Some of the curves (e.g., employment, consumer spending, decline of weak companies and poor credit risks) are continuing to trend downwards, but other curves (e.g., mortgage refinance, money supply, Federal Reserve support for various forms of finance) are trending upwards. Sure, the downwards-sloping curves continue to overwhelm the upwards-sloping curves, but that is the way it always is even shortly before an overall turning point.

The Federal Reserve, Treasury, and Congress clearly have plenty of work to do, but the simple fact that there is more work to do or that not 100% of prior efforts have been 100% successful is not a valid reason to abandon confidence in the efforts to come or the value of the work that has already been done.

-- Jack Krupansky


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