Sunday, March 29, 2009

GE Sees First ‘Glimmers of Hope’ in Economy

The Bernanke helicopter drops are starting to impact the economy.

General Electric has started to see the first “glimmers of hope” in the world economy, according to a senior executive at GE, reports FT.

Nani Beccalli, who as chief executive of GE International is in charge of all its business outside the US, said he saw several encouraging bits of economic data from round the world.

These included “signs of life” in the US and European retail sectors and improving profits among European banks as foreign competitors leave the market.

My only problem with Beccali's statement is that he sees strength in the "retail sales" area. Of course, I would prefer that this was broken down more in terms of capital goods (i.e. consumer durables) and immediate consumption goods. If he is seeing strength in immediate consumer goods, that is not as positive as growth in consumer durables. However, given that whatever he is talking about seems to have stopped and started, it's probably durable goods type stuff. For example he continues by mentioning the "inversion" of trends ":

“The first glimmers of hope are there. This is the inversion of trends, which for a long period have been going down. The glimmers weren’t there two months ago”. ..

Becalli’s comments on the first signs of an upswing were shared by other business participants at a European House-Ambrosetti conference – sponsored by FT– that took place last week in Brussels.

Bernd Geilen, the head of retail bank ING Direct in Italy, said there were signs of stabilisation returning to the banking market, while Stefano Pambianchi of Cisco said technology companies were also seeing some rebound in orders.

Remember, first the rebound, stronger than almost all expect, then the inflation (But, it is still sometime before the inflation hits at dramatic rates).

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