It just went beige all of a sudden
We’re all looking for that light at the end of the tunnel when it comes to America’s economy. Have things hit bottom yet? Is there truly nowhere to go but up? Or is martial law waiting in the wings? Will no fax cash advance and mortgage loan modification protect us from the rubber bullets and tear gas?
What does the Beige Book have to say? It’s the Federal Reserve’s anecdotal take on the economy from the viewpoint of its central banks in 12 U.S. districts. Carl Gutierrez reports for Forbes that Wall Street may just have reason to let loose a (cautious) grin.
A “troubled, but thawing” outlook
According to the report, the Fed’s banks saw activity that was “contracted” or simply “weak.” Yet five of the 12 reporting districts noticed a slowing pace of decline. Several districts even noted signs that activity in certain sectors was beginning to stabilize.
But don’t get too excited. The Fed set the bar – their expectations – quite low for their analysis. The prior report, which came out in early March, indicated an end of 2009 recovery from the subprime debacle. In that report, 10 of the 12 districts pointed out weakening conditions through February.
Rewind. Press play.
The rest of the current report sounds like more of the same. The market for credit remains tight as a drum, manufacturing continues to show decline, people still aren’t quite confident enough in the state of things to boost retail sales significantly, home prices continue to make their way downhill and the commercial Real Estate market is stagnant, as the sales outlook makes building and selling more office, industrial and retail space an iffy proposition.
Keep in mind that the Beige Book traditionally isn’t a market mover. That remained true here, despite the positive bits. Perhaps Chairman Ben Bernanke’s recent comments can be seen as a sign that beige was going to be more of a cheery color than it usually is. Here’s Here’s a story about beige Butcher Ben.
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A decline of decline is good news. Perhaps this means that the prediction of a rebound starting in early 2010 is a bit more likely. Of course the doom and gloom lobby doesn’t believe it, but it might just happen. Hopefully a lot of people will be able to return to their jobs.