Thoughts of Spring

It's official: my friend who deals with rail cars has said for months that loadings have looked better across all classes of commodities, from back in January. Now, there's official news from Federal Reserve statistics that manufacturing activity is broadly up in the first quarter (autos, computers and equipment, apparel and leather goods, and machinery) beyond inventory replenishment. Another manufacturing friend described it this morning as seeing some pent up demand from his customers. So, the expected first quarter GDP increase should be between 3.5-4%, according to AllianceBernstein.

I'm having trouble following the statistic that exports are up at an annualized rate of 22%--where are these going? Europe is traditionally our largest trading partner, and it doesn't seem to square with their domestic growth statistics, but there it is. Some commodity prices have bounced off their bottoms and appear to be firming. But again, with the market already having had such a strong move up, then these numbers should be already baked in.

The price of Greek debt is the next worry. It seems like the combination of Greek government pig headedness, German and French lack of leadership, and speculators seeing a juicy target may conspire to create the next potential global contagion. Financial press calls for the Obama administration to show leadership on this issue are misguided: if the EU can't find the technical and political wherewithal to defend their own monetary union, there is certainly nothing to be achieved by American jawboning.

Definite signs of economic spring, but stay tuned.