Monday, February 1, 2010

Groundhog Day in Melbourne II

Well, GDP supposedly grew 5.7% last quarter. The numbers are preliminary, still subject to adjustment. The announcement came with all sorts of qualifiers from the Commerce Department; but nevertheless, it is an impressive number.

Previously, I’d been on pins and needles for several quarters waiting for other financial shoes to drop, sending us reeling into the deep winter of a double dip recession. We’ve had some positive financial results from our portfolio companies of late, however, so it seems that things may indeed be getting better, notwithstanding a ten-plus percent unemployment rate. Combine it all, and it just leaves me jittery.

But something happened yesterday to put all our fears at ease. We can finally breathe a sigh of relief. The Great Recession is behind us. We can all get on with life.

How do I know?

Well, Federer won the Australian Open. He thumped Andy Murray in straight sets.

Life has once again returned to normal.

Recently, the once-invincible Roger had been less than perfect. He’d always lost to Nadal at the French, but then he started losing to him everywhere. Then all manner of journeymen, hackers and good-for-nothings started to get the better of Roger. He lost his number one ranking, and was finally reduced to tears at last year’s Australian Open.

Our economy, too, came crashing down from its once-unassailable heights, at just about the same time and in the same gargantuan manner. When a giant falls, he falls hard.

We reached the depths of both recessions about a year ago – the winter of 2008/2009, culminating in that teary trophy ceremony at the Australian.

(For more background, see Groundhog Day in Melbourne I).

As spring unfolded, however, it appeared that perhaps things were not as bad as they once seemed. Roger performed admirably on the European clay court circuit and then, after the gangly, howitzer-wielding Robin Soderling took out Nadal at the French, Roger claimed that only major title which had eluded him. Tears flowed again, but this time they were tears of joy.

Then Federer claimed Wimbledon in an epic five setter against Andy Roddick that went to 16-14 in the fifth – a serving slugfest on both sides, masterfully played. Only a few weeks later, Roger blissfully announced that he had become the father of twins. The tears flowed deeply.

Tears of joy flowed on Wall Street once again, too, as big US banks started posting improbably large profits on trading gains. Unemployment was somewhat intractable, but from many other perspectives, financial professionals were forced to conclude that life on earth was not actually coming to an end. Cash for clunkers seemed to be working, and the auto industry pulled out slightly from its historic slump. For the first time since 2006, investment bankers, hedge fundies and brokers of all stripes were actually able to relax on their August 2009 family vacations.

The start of fall brought the US Open and a new sense of optimism. All seemed well until the final. Federer started well against Del Potro, impressively outmaneuvering the powerful youngster in the first set. But then cracks started to appear in RFed’s game, and the raw power of John Martin the Door’s forehand started to wreak havoc on the Fed’s confidence. Roger lost in five, looking weak and beaten by the end.

Similarly, fall saw fresh new signs of economic distress. Housing starts were woefully weak; foreclosure rates started creeping up again; small regional banks continued to fail. Pundits wailed about weakness in commercial real estate markets, whose Byzantine securities could create distress far beyond their own boundaries, like those in the residential mortgage market.

By Christmas, nobody really knew where we were.

But then came the fourth quarter GDP growth rate of 5.7%. When I first saw it, I thought it was a mistake. It couldn’t possibly be so robust. Could it?

But now Roger has sealed the deal. His performance yesterday was reminiscent of the go-go days of 2004. It made one ponder whether any human, past, present or future, could possibly withstand such an onslaught.

So I can now confidently assert that our economic winter is over. Punxsatawny Phil can do his thing about the actual winter (bring on the snow!), but otherwise, roses are already coming up everywhere.



Disclaimer: I say all of this in equal parts jest and hope; in truth, I still have grave concerns about our economy.

1 comment:

Anonymous said...

A blog that talks about Roger AND the economy??? I think I'm in love...

Hope all is well! -Mory