8 Bright Spots Amid the Gloom – WTF!

I found this little gem of an article from two writers at SmartMoney.com, they think that some of the good news about the economy has been lost.  So they put together a list of eight “bright spots”.  Four of them seem rational and reasoned, the type of thing I would expect from financial writers. The other four would make sense if I was a complete idiot.  See if you can spot the BS.

1 – GDP: The Case for Seeing the Bottom: The fact that the economy shrank at a rate of 6.2% last quarter — the worst showing in more than a quarter century — sounds pretty awful. But here’s another way to look at it. The last time GDP dropped so precipitously (back in the first quarter of 1982) the Dow went on to gain 25% in the next 12 months.

Ok.  I’ll buy that, a correlation between the fall of the GDP and the rise of the DOW.

2 – U2 Releases New Album: A Positive Indicator: Irish supergroup U2 is coming out with a new album, “No Line on the Horizon,” this week. Their last album came out in 2004 — when stocks were still in the early phase of the last great bull market.  If that’s not a positive indicator, consider the longevity of this band. U2′s first single came out in 1980.

You’ve lost me.  2004?  So you’re telling me that the our economic recovery being rests on whether Bono and the gang feel like going into the studio and cutting a few tracks.  If we are going to believe in a musical deus ex machina, let’s at least buy American.  Aerosmith’s last studio album Honkin’ on Bobo was released in 2004 and they have a new one slated for release this summer.

3 – Health-Care and Tech Funds: Playing Defense Works: Fund tracker Lipper reports that the average return of science and technology funds is down 6.2% for the year, while health-care and biotech funds lost an average of 7.9%. Not too shabby considering the market is off 17%.

Health-Care and Tech Funds suck but not as much as everything else.  Its a reasonable argument.

4 – Solar Energy: Creating Jobs Already: International trade may be slowing, but Munich-based Wacker Chemie, beamed some optimism into southwest Tennessee with a planned $1 billion solar energy plant in Cleveland, Tenn. The factory will create 500 to 600 jobs in Bradley County, where 12.2% of the population lives below the poverty line.

Bring it on Germany!  I’m all for new green industry.

5 – Fund Flows: Money Is Coming Back to the Market: Investor optimism persists despite the odds, according to data showing a net inflow of money into mutual funds in January.

Sounds rational.

6 – Iceland: Selling Real Estate, Cheap: Iceland is trying to raise $25 million by selling property. If you’ve got $5.7 million, you can buy the Iceland ambassador’s residence in Washington, D.C. The 10,000-square-foot mansion boasts 10 bedrooms, five bathrooms and a swimming pool.

That’s right, Iceland selling a DC mansion has a nationwide impact.  Please let the President know that Riverside County California is saved!  Miami condo buyers your prayers have been answered.

7 – Tiger Woods: Another Positive Indicator: Having the greatest golfer in the world back on the professional tour after recuperating from knee surgery is good news even if you’re not a golf fan. After all, who doesn’t like Tiger? But we also noticed that the last time Tiger played in a tournament (June), the Dow stood above 12,000. Stocks have fallen 45% since then. Could Tiger be the balm for the market?

What is with you people?  This is your crack financial analysis?  Hell, by this brilliant logic I could say that Tom Brady’s return as the starting QB for the New England Patriots means that the market will rebound.  His season ending injury occurred on Sept 7th 2008, on Monday after the Dow was at 11,230.  Its fallen 39% since then.  Go back further, he first went under center in relief of Drew Bledsoe on Sept 30, 2001, the was at Dow 8,847.  So seven years, 3 Super Bowl rings, and 27% gain on the Dow is what I’m christening as the “Brady Effect”.

8 – Movie Ticket Sales: Still Shelling Out: U.S. theater admissions were up 9.3% in January and February, according to Variety. That sort of boffo box office is “unheard of” during what is usually the slowest time of the year, the trade publication says. It turns out that hopeful stories about the lowest strata of society — the improbably uplifting Oscar winner “Slumdog Millionaire” and the merely improbable “Paul Blart: Mall Cop” — have folks streaming to the cinema.

Hmm.  Paul Blart is our sign that things are picking up!?  No Paul Blart is a sign of two things (1) that Kevin James can carry a movie, as long as he’s doing silly physical comedy and (2) there is a rotund comedian void, we don’t have Candy or Farley anymore so James might be ready to step up.  I work in the entertainment industry, while I benefit from people going to the movies, it ain’t a “sign”.  I’ll breath easier when occupancy at Las Vegas hotels goes up, when visitors at Disney Parks in California and Florida return in large numbers, and when NASCAR attendance picks up.