Pwning the recession

Want some bang for your recession buck? Try some video games. For $50-60 the hours of entertainment that a single game can provide (let’s ignore the console purchase up front…) it has most other forms of entertainment beat in a dollar-per-hour equation. And consumers are putting their dollars behind this value proposition:

 

As people cut back on travel and going out, they are turning more to home entertainment, providing a boost to the videogame industry that is under pressure to keep gamers amused and beat the recession.

“Videogame sales have been impacted the least from the global recession and there are no real signs of it slowing,” said Michael Cai, vice president of videogame research at Interpret.

Last fall, as the effects of the economic downturn were being felt, videogame sales rose internationally. In the United States alone, sales increased 19 percent over 2007, topping $21.3 billion, according to The NPD Group.

 

Source: Reuters

This trend is keeping these guys pretty happy…

 

I just love any excuse to use this...

Manufacturing index ticks up again…

Faint signs of life? Manufacturing sector activity rose slightly in March… the surprising thing is it’s actually the third month in a row:

 Manufacturing sector activity rose slightly in March, inching up for a third month, but the index reading still indicates an ongoing contraction, a purchasing managers’ group said Monday.

The Tempe, Ariz.-based Institute for Supply Management’s (ISM) manufacturing index rose to 36.3 in March, up from 35.8 the previous month.

The reading beat estimates from economists, who expected a slight increase to 36, according to a Briefing.com consensus survey.

Source: CNN Money

Add to that better than expected housing and auto sales data and we saw another solid day on the Dow and world markets.
Source: WSJ Online

It possibly indicates the growing trend of alternative usage of manufacturing equipment as traditional consumer demand remains low.

 

Recovery in 2010

Its not the end of the world as we know it. The UCLA Anderson School of Management is seeing a recovery in 2010:

The U.S. economy has a good chance of starting to recover in 2010, but the rest of this year is going to be tough, according to a report released Wednesday.

The UCLA Anderson School of Management’s quarterly economic forecast calls for real gross domestic product to decline 6.8% in the first quarter of 2009, 4.5% in the second quarter, and another 1.7% in the third quarter.

But in 2010, the report predicts an average quarterly growth of 2.7% and an average of 4.1% in 2011.

Source: CNN Money

Hmmm… so try and suck it up for the next 9 months… things might be looking better post-Christmas 2009.

Biggest one-day gain since October

So as predicted by world markets yesterday, the Dow powered up 6.84%. Perhaps even better than expected.

Has the bottom now been hit???

Source: Wall Street Journal

Geithner’s stocks have also been on the rise. Even the WSJ are giving him a tentative tick of approval for now:

The best news about the new Treasury bad bank asset purchase plan is that Secretary Timothy Geithner has finally settled on a strategy. The uncertainty was getting almost as toxic as those securities. Now all Mr. Geithner has to do is find private investors willing to “partner” with the feds (Congress!) to bid for those rotten assets, coax the banks to sell them at a loss, and hope that the economy doesn’t keep falling lest taxpayers lose big on their new loan guarantees.

Source: Wall Street Journal

Yeah… so it is not going to be easy but hopefully we are finally on the way.

Plan for toxic assets boosts market further…

Some, including Paul Krugman, might be saying otherwise, but the markets are giving Obama’s a thumbs up. Nikkei – six week high. Hang Seng -five week high. Australia -six week high. FTSE up 2% as of writing on top of 6% for last week.  And the Dow is currently looking good:

U.S. stock futures rallied early Monday, as investors expressed optimism about the Obama administration’s plan to seek the help of private investors as it attempts to rid banks of possibly as much as $1 trillion in bad assets.

At 5:16 a.m. ET, Dow, S&P 500 and Nasdaq 100 futures were sharply higher. 

Source: CNN Money

Well now let’s wait and see what this plan ends up being…

It prints money!

So Ben Bernanke is feeling positive about the economy. Whether that is true or not, he did his best today to give the US economy another boost by buying up $300billion in treasuries and another $750billion in mortgage backed securities. A trillion dollars sure isn’t what it used to be.

He’s hoping that this injection of liquidity into the market will start to get get credit flowing, and by buying mortgage securities, lower the cost of 30-year home loans. (A bit hard to just drop interest rates when there is nowhere left to go) The stock markets sure did like it though, keeping this current rally ticking along nicely.

Source: Everywhere, but check out CNN Money.

I believe the term du jour for this is ‘quantitative easing’. They used to call it printing money back before money turned into a concept reflected on a computer screen.

Instead of buying up treasuries, maybe Benny B should have borrowed Iwata-san’s Wii?

Fed Reserve Chairman is upbeat

Ben Bernanke felt the need to get a bit of 60 Minutes action recently and took the opportunity to be a little upbeat:

 

The U.S. appears to have averted an economic depression and there are some positive signs, or “green shoots,” in some markets where the Fed is active. And we’ve seen some improvement in…the banks, as well, certainly in some key cases.

Big banks are solvent… and they won’t be allowed to fail.

 

Hmmmm… this whole not being ALLOWED to fail thing still doesn’t sit right with me personally. Hopefully at least the US Government can reprivatise/refloat its equity stakes in all these companies when times get better. Anyhoo… I’ll take the positive news Ben!

Source: WSJ.com

 

Benny B on Day 1.It might have seemed an easier gig back in '07 to impress the old boss.