As economy stabilizes, new challenges rise
Give Fed, politicians some credit. Now can they pull off the ‘pivot’?
These days, it’s easy to be confused about the economy.
On the bright side, the stock market rallied more than 25% from the dark days of early March. Credit markets eased. The April jobs report was less bleak than anticipated. And the government’s “stress tests” of major financial institutions delivered relatively benign results, allowing many to issue new common stock to beef up balance sheets.
At the same time, retail sales dropped in April. Foreclosures and unemployment rose. The bank stock offerings caused indigestion as they competed with existing shares for investor capital.
Chrysler filed for bankruptcy protection, and General Motors might soon follow. The stock market dipped a bit this week, and money managers sounded more notes of caution.
Amid the cacophony of mixed signals, where do we stand? One simple answer is: a lot better off than we could have been.
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