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Fed Chief Ben Bernanke keeps beating the "Recovery in 2009" drum. It seems he’s confident that the measures taken by the Fed, Treasury and Administration will free up the banking sector and get money moving again.
Will that get people spending again? Well, it might.
As I’ve said before, it’s never wise to underestimate the U.S. consumer. Americans, at least those that still have jobs, have been re-capitalizing their personal balance sheets for about six months now. And the first round of consumer stimulus hits paychecks starting in April.
All that’s missing is a little confidence …
*****Consumer confidence polls tend to get dismissed as a lagging indicator. The financial media likes to pretend the average American is fickle and unreliable. We’ll say we’re scrimping and saving to make ends meet. Bur we’ll also treat ourselves to a mid-day Starbuck’s break, or a <gasp> cocktail after a particularly hard day’s work.
And I’ll readily confess that I’m always surprised when my occasional after-work cocktail ends with a $40 or $50 bar tab.
I’m just doing my part to help the local watering hole and the people who work there.
Of course, when it comes to the economy, a couple drinks really is a drop in the bucket. We need to see cars selling, refrigerators, TVs and maybe even an airplane or two.
*****It’s pretty clear that the Obama administration and Bernanke are doing their level best to boost confidence that the steps they are taking will lay the groundwork for a better tomorrow. As well they should.
An economy really is about faith and confidence. Citizens must have faith in the rule of law and in the financial system. Madoff and AIG have dealt both systems a serious blow. And for a little while there, the promise of a better tomorrow was looking a bit like one of Madoff’s annual statements. But now, that promise might start looking like it might actually be correct.
*****I’m feeling a bit sheepish about abandoning the stocks I’ve recommended recently in Daily Profit just as sentiment may be turning to the positive. But only a bit.
Because while stocks moved higher late last week, this is no time to throw caution to the wind. And I prefer to err on the side of caution.
I still expect any stock market recovery to be a drawn affair, meaning that despite a potential shift in sentiment, stock prices aren’t likely to plow higher and leave investors behind. We’ll have opportunity in the days to come.
We’ll be discussing these issues in more detail, with charts and specific investment opportunities in an upcoming TradeMaster video conference that will air on March 25. Here’s a registration LINK if you’d like to sit in. Plus, when you register, we send you TradeMaster Daily Stock Alerts right up until video conference. That way, you’ll be able to make the most of the information and trading ideas we explore.