The rebirth of the economy

April 20, 2009

In the autumn, I made a little forecast about the potential duration of the financial crisis, the severity of which I have always been a bit skeptical about. Essentially, I predicted that the crisis would be over by early April, on the basis that several close friends were expecting babies around that time, and that parents wouldn’t want to bring babies into a world of financial meltdown.

While the forecast was of course tongue in cheek, I’m happy to report that there are signs that it appears to have been correct. Bernanke  and Obama were out last week talking about “green shoots” and “cautious optimism,” saying that although the recession would continue to cause some pain, there were signs that things were already getting better. Today, Bank of America announced that their profits have tripled, which was a good sign that the banking sector has started to recover, especially when coupled with news that JPMorgan, Goldman Sachs and Wells Fargo are also expecting to make big profits this quarter. All of those who drank from the tap of public funds plan to pay them back early. It’s true that these might prove to be temporary upticks in the economy, but they seem pretty robust signs that the critical element of the economy affected by the crisis – the banking sector – will begin to resume lending and therefore prevent the economy from going into further recession.

While all of this is good news, I’m even happier to report that four baby boys have been born to my friends, on March 11th, April 4th, April 10th and April 15th. Two more are expected on April 30th (one girl amongst all these boys!) and in early May.  Let’s hope that their arrival continues to augur well for the economy, not just for their parents and families.

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