Is the recession really here yet? - Inside Tucson Business
Sep 5, 2008 6:30 PM - • There’s this Aug. 8 article in SmartMoney by Donald Luskin: I’ve just spent two days with friends and family in Disneyland, ‘The happiest place on Earth’. Based on what I’ve seen, it ought to be called ‘the most crowded place on Earth.’ It was mobbed. Packed beyond capacity. On its third quarter conference call, Disney management said, We estimate that without the impact of the Easter timing shift, combined attendance at our domestic parks in Q3 would have been ahead of the prior year by low single digit percentages. Wow! There are families still taking vacations despite the high cost of gasoline.
• The Associated Press reported Aug. 8 that Chile’s Central Banks says the nation’s copper sales surged 8.8 percent in the first seven months of the year over the same year-ago period. The South American nation is the world’s largest copper producer. State-run Coldelco and BHP Billiton are the country’s largest copper producers. BHP Billiton reported record copper production for the year ended June 30, 2008. The demand for this economically sensitive metal at high prices would seem to support a global economy that’s growing.
• Housing starts in July came in at an annual rate of 965,000, down 29.6 percent from July 2007. July’s pace was the lowest since March 1991. This is not all bad news. Consider that a low level of housing start activity is what is needed to work off existing inventory to get to a level where healthy growth can begin. The Tucson Association of Realtors Multiple Listing Service reported the inventory of home listings in July dropped below 8,000 and new listings are down nearly 20 percent.
• Finally, if magazine covers are contrary indicators, as some believe, the worst may be over for the financial services industry. Meredith Whitney, a bank analyst at Oppenheimer & Co., is on the cover of the Aug. 18 issue of Fortune. The cover reads, Bank analyst Meredith Whitney called the credit meltdown a year ago. Her forecast now: more pain on the way. The author describes her as the most influential stock analyst in America. And certainly the most bearish.
Don’t get me wrong. I fully appreciate the serious issues facing the real estate and financial services industries. And the economy may fall into a recession, or it may not. But for now, I think sentiment appears to be too dour versus reality.
Contact Stuart J. Shaw, creator of the Company Stock Risk Profile, at stuartshaw@stuartshaw.com or (520) 877-9901. Shaw, a Chartered Financial Analyst and licensed in the state of Arizona as an Investment Advisor, created the Company Stock Risk Profile to simplify the process of analyzing securities for individual investors. Shaw’s column appears the second week of each month in Inside Tucson Business. A HREF=http://www.azbiz.com/articles/2008/09/05/finance/your_money/doc48c193c20cf90818973880.prt target=pri
