The best thing that can be said of 2008 is that it’s finally over.
Analysts and historians will be writing a post-mortem for years to come.
Knowing Hollywood’s penchant for disaster movies, I’m sure there soon will be blockbuster coming to a theater near you.
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As most of us pick through the shards of the calamity, it’s hard not to believe that the coming year will bring more of the same.
The worst may not yet be behind us. But there are some reasons to be guardedly hopeful.
The First Priority
On top of the list; is the changing of the guard at 1600 Pennsylvania Avenue.
Not all the problems of the past 18 months can be laid at the feet of George Bush. But from the first inkling of adversity, there has been a lack of credible leadership.
Historically, Presidents get too much blame when the economy is bad and too much credit when it’s good. Bill Clinton is an example.
But in times of crisis, leadership and the ability to inspire are invaluable.
FDR was not a visionary. As President, however, FDR relished the challenges of leadership. He was also a master pitchman. Through the force of his personality alone, he sold Americans on idea of a better and brighter future.
Trust Makes a Comeback
It’s too early to know whether the President-elect and his team will be able to quickly get our economy back on track. Like FDR, Obama exudes confidence. While the new President has been quick to caution against too much optimism, his actions to date appear to have brought about a new sense of trust.
It may not be enough, but it’s a good place too start.
In addition to the change in leadership, there are other reasons to be hopeful about the months ahead.
Inflation is in check. Although commodity and fuel prices have gone up in the past few weeks, you can almost fill your tank for $20.
Unemployment Starting to Steady
Unemployment numbers are still growing. Unless the automakers suddenly shut their doors, there are indicators that the job numbers could begin to stabilize in the second quarter.
Interest rates are at historic lows. Credit-worthy borrowers have been turning out in droves for everything from new home purchases to refinancing old loans. As home prices continue to come down, bargain-hunting buyers will emerge from the shadows.
Most analysts agree that the stock market probably has not yet found its bottom. At the same time, investors remain gun shy. Like the real estate market, at some point the bargains on Wall Street will become too attractive to ignore.
Man y Enterprises Retain Their Solidity
Despite the steep downturn in the economy, there are still thousands of companies whose fundamentals remain solid. When the haze clears, these companies will be the beneficiaries of price-savvy investors.
In upcoming year, transparency will be the watchword in the financial world.
From all indications, the new administration seems to understand that it must strike a balance between the imposition of new regulations and free market forces. While Obama nominees like Treasury Secretary-designate Tim Geithner are advocates of closer regulation, they seem to appreciate that care must be taken not to handcuff financial innovation.
Bipartisanship in Bloom?
It’s unlikely that the Congress will have an economic stimulus package ready by the time the new President takes office. In a departure from the bickering that has been the hallmark of the past Congress, there appears to be a budding bi-partisan unity of purpose on Capitol Hill.
Lawmakers on both sides of the aisle say they are anxious to move forward. Even the most strident deficit hawks understand that the in light of the current crisis, the federal government must act with bold purpose.
It’s still too early to have high expectations about the economic prospects for 2009. But, with the books finally closed on ‘08, and a new President about to take the reins, there are reasons to be cautiously optimistic.
John Cohn is a senior partner in the Globe West Financial Group[ based in West Los Angeles. He may be contacted at www.globewestfinancial.com
