Every now and then, someone spots a faint glow in the darkness, and wonders out loud if it’s the light at the end of the tunnel…or if it’s a train. Somehow, that joke continues to get laughs, though that’s always a surprise. It’s as if people were fooled, again, into thinking the good times were finally coming back. This now reflexive defense mechanism against getting one’s hopes up has gotten a good deal of exercise in the past 18 months, thanks to the heavy hammer you’ve got to lift to bash them down again.
And yet, hope springs anew. It’s not just the great weather and the sun and everything, mixed with a bit of Cannes. The American economy has for several months been tracking up into “suspicious optimism” leaving behind “mild despair”. The first signal for us were predictions that the housing market would hit bottom in 2012. Sure, there are tons of foreclosures to go through yet, and the banks still (unbelievably) can’t find the paperwork on a bunch of them. But more and more analysts are climbing on board the bottom of the market argument. Now, monthly employment numbers have surprised analysts yet again, giving a horrible fright to Republican presidential candidates who never dreamed the economy might be on President Obama’s side come November.
It could all still go pear-shaped, of course. Pessimists will set their sights on Europe, where few believe Athens won’t need more money and there’s concern about the rest of the PIGS. And, sorry to say, you could do worse than add Hungary to your list of concerns. But anyone listen to Bloomberg on-line sometimes? You’re starting to hear some analysts there say recession might bottom out at the end of this year. Yeah, we know the joke, and yes it might be a train. But you don’t know that yet.