This past weekend I went to opening day for my nephew’s Little League baseball team. This was his second year, and let me tell you, I hadn’t seen a crowd like that since my playing days at that park back in the ‘80s.

Granted, the bases-clearing double my nephew hit might be playing into my sentiment here, but I really think this recession is going to remind us of the little things that made life fun. I mean, for about 45 minutes (games are shorter on opening day) all I could see were parents cheering on their kids or selling snacks to help raise money for the league.

In our rush to have everything, we’ve forgotten about the little things in life. Unfortunately, this recession is providing a nice reminder of those little things.

Don’t get me wrong, I was jumping out of my chair when I heard about today’s rally on Wall Street, especially since it was led by companies impacting our industry -- Citigroup, which saw its shares jump 38 percent, Wells Fargo, Bank of America, and JPMorgan Chase. However, as several market analysts said, one day doesn’t make for a trend.

I often think back to Amy Martin’s comment at the AFSA (American Financial Services Association)’s 2008 Vehicle Finance Conference in San Francisco. The director of structured finance ratings for Standard & Poor’s Corporation said: “I think [the correction is] going to be felt across the board … the consumer is going to feel it, the dealer and the finance company. That’s what happens when you go through a correction …”

I’m not sure Martin knew how bad things would get when she made those comments more than a year ago. Her point, however, was that we’re kidding ourselves if we think we’re going to get through this period pain-free. The truth is – and it’s something I think we’ve forgotten – we’re all in this together.

It’d be nice if some revered economist or financial expert could tell us that things are going to be OK. Unfortunately, even those people don’t know what to make of things.

Yesterday, Warren Buffett likened the crisis to our economy falling off of a cliff, saying during his appearance on CNBC that President Obama is in essence a wartime president given the severity of the economic downturn.

“We’re in a big war, and we’re going to use money to fight it,” he said.

Then there was the comment from Nigel Gault in response to the jobless rate hitting 8.1 percent in February, the highest since 1983. “There is no light at the end of the tunnel with these numbers,” said the economist for IHS Global Insight.

As bad as that sounds, I do believe consumers are just waiting for someone to tell them it’s OK to spend again, which is actually being supported by recent data. True, the unemployment rate was definitely a shot to the stomach, but there was also a consumer spending report that offered some good news.

Retail sales in January rose 1 percent, while consumer spending and income rose 0.6 percent and 0.4 percent, respectively. I know that’s not a lot, but as one economist said, spending will be a key indicator of our return to normalcy. Heck, consumers went out and spent after the 2001 terrorist attacks and the 1987 stock market crash, as people could only keep their pent-up demand bottled up for so long.

“I think we are close to where the intensity of the recession starts to back off,” said Ken Goldstein, an economist at the Conference Board, who believes March payroll losses to be below 600,000, the first time in about four months.

And apparently many of you in our industry believe the same thing, at least according to results from a survey conducted by the Small Business Research Board (SBRB) in the fourth quarter of 2008. The results said 40 percent of owners and managers of automotive-related businesses expected the general economy to improve over the next 12 months, which was a 12-point increase over the second quarter of 2008.

Think about those results for a second. Even during what was one of the worst quarters in our industry’s history, dealers still could see the light at the end of the tunnel.

Look, I don’t claim to know what’s going to happen. All I know is I felt pretty good about things at my nephew’s game. Not once did I think about the repairs my car needs, the property taxes I owe this year or the credit card I still need to pay off.

However, when those thoughts do start to overwhelm me, I think back to a quote I picked up from John William Snow, chairman of Cerberus Capital Management LP, during the 2008 Vehicle Finance Conference. “Don’t panic, we’ve been through credit cycles like this before. If we build strong habits, adapt best practices, we should be able to build a good foundation for the future.”

Author

Gregory Arroyo
Gregory Arroyo

Editorial Director

Gregory Arroyo is the former editorial director of Bobit Business Media's Dealer Group.

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Gregory Arroyo is the former editorial director of Bobit Business Media's Dealer Group.

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