the downturnaround

Introducing the Downturnaround

Sure, the front-page headlines spell gloom and doom, and the layoff numbers in the news are nothing short of horrifying. But if you look very, very carefully, the proverbial silver lining is visible, if just barely. Which is why we’re introducing the Downturnaround: A semi-regular feature in which, like an out-of-work banker checking the sofa cushions for change, Hugo Lindgren digs deep into the darkest crevices of the internet and mainstream media to bring you a digest of economic news that isn’t despairingly negative! This week so far: Some people on Wall Street make money, Nouriel Roubini says something positive — or at least not negative — and hey, other recessions have been worse than ours! After the jump.

• Nouriel Roubini, a.k.a. Dr. Doom, says that the U.K. will not be the next Iceland. [RGE Monitor]

• Meanwhile, Peter Schiff, a grizzly bear who, among other certain calamities, sees the United States dollar going the way of the Zimbabwe currency, gets his hat handed to him. [Mish’s Global Economic Trend Analysis]

• Don’t let buzzwords like “depressed,” “bottom,” and “dismal” distract you from the overall sense of non-gloominess in this paragraph about the future of automobile sales: “Sales won’t increase right away (look at the depressed sales during the early ‘80s), but this does suggest that auto sales are closer to the bottom than the top, and that auto sales will increase significantly in the future — although sales in 2009 will probably be dismal.” [Calculated Risk]

• In his latest quarterly letter, David Einhorn of Greenlight Capital sees further buying opportunities ahead, even if that does include a bit of that doom-mongerer’s favorite, gold. (Einhorn also scores points with us for quoting Thomas Pynchon in his letter.) [Infectious Greed]

• Private money-manager Jeremy Grantham, another one of those scary-smart guys, has a couple of comforting observations in his latest quarterly letter. For starters, he concludes that the bubble that popped in Japan in the early nineties, often cited as a model for our current woes, was in many ways much worse.

Their stock market, at 65 times earnings, was over three times our market’s recent highs and their land was at several multiples of ours. In 1989, Tokyo’s land per square-foot was around ten times the value of Manhattan’s!

Moreover, those of you who are not yet broke can take solace in the fact that “with the market at half price, you now have much more powerful dollars. For consumption purposes, a dollar is always a dollar. Investment dollars, in contrast, are weak dollars in badly over-priced markets but powerful dollars in cheap markets. Today, investment dollars are a whole lot more powerful than they used to be.” That was hard to follow, but amen! [GMO]

• Oh yeah, this isn’t the first recession in recent times that made us all hate ourselves for buying too much crap and think that everything in America would have to change forever. [Marginal Revolution]

• And just when it looked like the only way banks could make a buck was by taking it from taxpayers, some guys at Morgan Stanley and Bank of America caught a windfall from Pfizer. Now, c’mon fellas, hit the shops and restaurants and spread it around! [Bloomberg]

• The banks can take our houses, they can revoke our credit cards, they can leave us in the street wearing nothing but last year’s distressed denim. But they cannot take our BlackBerrys! [Silicon Alley Insider]

• Jack Welch, formerly America’s most respected businessman and now a guy who gets listened to not quite so much, says the government’s bailout plans are doing the trick. [Seeking Alpha]

• And finally, the big economic number of the day, the all-important existing-home-sales figure, came out not so horribly, dreadfully, terribly bad. Sales improved 6.5 percent from November to December. Yes, prices continued to slide at an annual rate of 15 percent, but hey, people are buying shit. That’s not nothing! [Money/CNN]

Introducing the Downturnaround