Volume 72 July, August, 2010

A Penny for My Thoughts...

     I loved Aesop's Fables as a child. We had a collection of books recounting the tales, and I constantly pored over them. Of course, this was reinforced by my Saturday mornings in front of the television. Many of the early cartoons were retellings of these stories.

     I recall the story of Chicken Little, aka Henny Penny, told in one of the Disney cartoons. An acorn falls on her head, convincing her the sky is falling.

     Her hysteria becomes contagious. She convinces everyone in her path of her erroneous conclusion. Soon, all the animals in the forest are whipped into a frenzy convinced the world will soon end.

    "There's many people in the world just like our Henny Penny. They panic when they listen to the news. They think the sky is falling, and we're all about to die. I'd say they have the Henny-Penny Blues."

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     When it comes to the economy, there's good news and bad news. I'll tell you the bad news first even though you already know it all from listening to the nightly reports.

     First, the unemployment rate is stubbornly stuck at 9.5%. Add in the folks who have given up on finding work or who are working less than they would like and you'll get a rate around 17%.

     Consumer spending slowed to a crawl during the summer. As a result, retailers are struggling again for sales. Commercial real estate is in a pinch, and businesses are holding off on rehiring.

     That's a lot of bad news... more than an acorn's worth. But I don't believe the sky is falling.

     As a whole, company earnings look good. Some are good because of cuts in spending, but many are reporting ever-rising sales. 

     The unemployment rate is static. Governments are cutting payrolls, but private businesses are hiring. Other economic indicators are edging higher.

     While the news over the summer was dire, that will change. Consumers will step up, and it will be the end of the Henny Penny Blues!

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