The news from Europe is dire, the housing crisis of 2008 continues to echo as real estate markets bounce along the bottom, and unemployment/underemployment remains unacceptably high. This is the news you constantly hear in an attempt to get you to watch, click, read, and buy their product.

If you are actually engaged in the economy, you can see there is something different going on. I have the advantage of participating across different segments of the economy and that provides something of a distinct view point.

Here’s what I see/hear:

• The price of housing rentals is spiraling out of control. What was a $1,500/month setup is now a $2,000/month charge in less than a year. Since mortgage rates are still at historical lows and inventory is available, watch out, here comes the next housing boom. Not building, but remodeling and purchase of existing inventory of investors looking to rent and renters looking to escape to more predictable costs.
• Help Wanted Part 1: Everywhere I go I’ve been seeing Help Wanted signs. Not just a few, about 50% of the businesses I’ve visited over the past 3 months are looking to hire. Admittedly, not all of these are great jobs, but they are jobs and I haven’t seen this phenomena since the pre-bust years. At Oddyssea, we’re looking for help and having a devil of a time finding quality candidates.
• Help Wanted Part 2: Since some of my work is consulting, I get to see inside some of the large, publicly traded outfits and what they are up to. 100% of my clients are hiring and hiring big. These are great, white collar, high paying jobs with benefits and these companies are having a difficult time finding qualified candidates to fill the openings. Hiring is going offshore not for cost reasons, but instead because of skill sets and that is a bone chilling long-term proposition for the US.
• The outcome of the US Presidential Election is not really in doubt. Markets love predictability and when the incumbent wins in a near landslide in 2 months time, we could be in for a holiday stock rally…

So Mike, what does this all add up to? I think we’re about to turn the corner on the cycle and head into an upswing. The news stories you’ll hear will be about 19 year old millionaires who led the way in the upturn. You’ll hear about companies in the US resurrected from near-death experiences. You’ll hear about wily business people who just “stuck with it” during the downturn and emerged triumphantly. Everyone will rush back into real estate after a few years on the sideline.

It will be as Alan Greenspan opined “irrational exuberance.” That will last a couple of years until the next series of events cause the next downturn when the doom and gloom stories re-emerge from their hibernation.

The best way to benefit from this is to participate. Get in the arena, get bloody, and reap the rewards. (Note: when prognosticating, it’s always a good idea to say “And I could be wrong, it’s happened before. YMMV.”) 😉