Think Semi-Positive

Is the turnaround at hand? Maybe, maybe not, but it is heartening to see CFOs more optimistic, life returning to the credit markets, and deals starting to happen.


We didn't intend for this to be the "green shoots" issue, but it does seem to have turned out that way. From the results of our latest Business Outlook Survey to our examination of current trends in credit and capital markets ("Back on Track") to the latest news in the world of M&A ("Down but Not Out") there is widespread, if shallow, evidence that things are looking up. Or perhaps still looking down, but at a less acute angle.

As this issue went to press in mid-September, the Dow reached a new high for the year on the very day that President Obama traveled to Wall Street and suggested that the United States is "beginning to return to normalcy." We still have a long way to go, of course, and even a full return to normalcy won't take into account the opportunity costs inherent in a year (at least) of containing, if not extinguishing, economic fires. Where might we be today if the no-questions-asked, interest-only mortgage hadn't struck so many as a great idea? We'll never know.

Nonetheless, it is heartening to see a majority (58%) of CFOs more optimistic about the coming quarter, a sixfold increase from last December's record low. And new signs of life in various segments of the credit market, not to mention the previously moribund deals arena, are also encouraging. It may say something about just how far we've fallen that the slightest whiff of "normalcy" can prove so intoxicating, but we'll gladly breathe deep of this nontragic news and be grateful.

We are also pleased to offer something new in this issue: the debut of our Credit Risk Scorecard, which provides a snapshot of three dozen industries based on their credit risk: Does a company's cash supply combined with its days payable outstanding suggest trouble for its suppliers or customers, and if so, how much?

Is the scorecard brimming with good news? No. Optimist or pessimist, there's something there for everyone. But not, we're happy to report, in equal measure.


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