Are We Seeing the Beginning of Economic Recovery? March 19, 2009
So between Unbiasd and NYTExplorer, I tend to consume a lot of news in a given day. Both this week and last, I’ve been surprised and downright excited to see certain signs that we are indeed on the road to recovery, and the dire economic downturn isn’t going to hold us down forever. To be brief – I for one, believe that we’ve (finally) hit bottom and are climbing back up. March 9th being the day we potentially hit ‘bear bottom’. Here’s why:
Housing is the root of the credit crisis, which in turn led to the recession we’re currently in. In case you’re still wondering about the logistics of the credit crisis and how housing a real estate contributed to our current economic state – watch this video. It should clear up a lot of those details you may have missed, I know it did for me.
So the way I see it, if housing is at the root and beginning of this mess, then it probably should be involved with the recovery as well, right? This week news came in touting the rate of housing starts actually increasing! This means that basically the rate at which new houses are being built actually increased in February. This means (potentially) that there is an increased demand for houses and could also mean that there are less foreclosures and houses being auctioned. This is a solid first step.
This one is easy to see and certainly news worthy. It’s no secret that the markets have rebounded in the past couple weeks since their horrific downfall previously. Actually, in the past 10 days (3/9-3/18) the DOW is up almost 1,000 points (11.5%). The S&P 500 is up even more at 14% over the same period.
Now I’m not saying that a simple rally in the markets means the end of the recession, I’m simply saying that it’s a very welcome change to see as opposed to the doom and gloom of the past month. Any investor will tell you that it’s been a somewhat high wire act of late. Let’s keep it going!
This certainly was a surprise for me to see:
http://www.crunchbase.com/funding-rounds?page=1
Venture funding, while down from the levels of the past years, is still happening. If this recession has taught me anything in terms of startups, its the simple face that in order to have a successful business, you actually have to make money and become cash flow positive.
Total no brainer, I understand. But with all of the companies out there, especially in the tech space, that seem to think they’ll get enough eyeballs by making a decent product at best and support themselves through CPM advertising while hiring a staff of 10…I think it’s rather naive. Startups in the recession have to be lean and efficient – but most of all, as we’ve learned, they have to have a plan that will enable them to generate enough revenue to break even as quickly as possible. Not an easy proposition for most.
Of course in the tech space, the news of late around acquisitions has also been positive with Cisco agreeing today to purchase Pure Digital Technologies, makers of the popular Flip video recorder for $590 Million. Also, the big news of the week has been IBM gesturing at acquiring Sun Microsystems, which of course will also land them the rights to MySQL, which Sun purchased back in the beginning of ‘08. At least in the tech space, which tends to be very active in terms of M&A is looking up.
Time will tell around economic recovery, but these three signs alone has me feeling optimistic for the first time in a while. How about you?






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