By now, it’s common belief, I daresay common knowledge, on the street that financial companies, those that exploded universally in November of last year, are on the road to recovery and some are even doing well.

Over the past 4 weeks or so, we’ve seen some broad stabilization across the stock market and a Dow number that is slowly and reliably pointing upward. I still maintain that my original call of a March 2009 bottom is correct and that underscoring that this is the most delicate time in any broad economic recovery is correct - if we have money to invest then when, where and how should we do this? If we are surviving, where are the jobs that will help us get by, day to day?

TARP money has not completely trickled down to the end-most working level as of yet but it has been making its way down. I’m hearing that some grassroots level companies and sectors are or will be getting some stimulus money very shortly.

Friends in larger companies, multinationals, have been telling me that decision-makers have not been making any moves as of yet because they are trying to figure out what the post-economic-meltdown world looks like. In a way, that’s sad to hear because anyone who has been unemployed through this turmoil (and there are up to 15%+ of such folks in many areas of the US, right now) can tell you exactly what this world looks like and where the priorities are. Some may look at such business leaders and lament that they have been spared the worse and now live in an ivory tower, unaware of what is truly important.

On the other side, this is one of those times in history where haste can make waste. We can be so eager to help the loudest voice complaining about kids to feed and foreclosures to avoid and lose strategic perspective. However, I would like to believe that the past 6 months has been about strategic thinking. Those who have been holding down a job in a position of authority, I hope, have been working on a turnaround strategy beyond merely cutting costs and saving their jobs. If not, it’s time to go beyond self interest and developmental myopia because the public will be demanding the next step in the recovery process with a louder and more pressing voice than ever before and this is certainly not the time to figure it out as we go along.

It has been the job of government to temporarily step in where the private sector has egregiously failed and bring stability back to the markets and calm broad spread panic. This has been done, pretty much.

The next step has been to ensure that money continues to flow through the economic cycle. This also has been done. And, if money disappeared, the government needs to enable the creation of more money to ensure that the value assets is maintained and enough cash is flowing to get business done. And this, too, has been done.

So, money has been available and some of it has been spent (and some squandered but that’s beyond the scope of this posting). Since the firing of GM’s CEO, the focus has moved from Wall Street to Main Street, but it’s now focused on the Park Avenue end of Main Street - meaning that businesses deemed at some point to be too big to fail have been getting all the attention.

I would expect small business, which accounts for the majority of jobs in the country, according to most reports from EDD and chambers of commerce across the country, to get some focus very soon. SBA loans are still ridiculously unavailable and many landlords that lease commercial space are still unaware of the fact that many of their small business tenants have experienced a very serious drop in revenue - to the extent that it is not uncommon to see some struggling mom-and-pop shops paying 25% or more of their gross income to rent alone. The landlords claim that the drop in business of their tenants is not their problem. They are in the real estate rental business, not the coffee business, or insurance business, or hairdressing business. To them I say, we are all in the survival business, right now, and that is all that matters, for now. The government did its part, tax payers have done their part, and entrepreneurs have gone bald and become neurotic over managing their risk in order to survive and push beyond mere survival with gutsy promotions and product introductions in the toughest economic times since the Great Depression. What makes landlords so special that they feel that they are immune to doing their part in keeping our collective head above water? But I digress.
While business leaders on the front line think about their company’s next step and eye ‘free money’ from the government (and tax payers), I would encourage them to think strategically and for the long term while minimizing current woes. Simply plugging random holes with cash doesn’t ever fix anything. And, these same business leaders are in the extremely stressful position of having to think very quickly and act even faster.  The best way to ensure permanent dependence on the government for services and business management is to needlessly over-spend taxpayer money. Paradoxically, inaction could be worse than making a bad decision.

So, the true mark of a leader in such times is clarity of thought and swiftness of action. And, this also means that we are in a time where getting the initial steps to a turnaround are critica. Small businesses, program managers, and divisional leaders still need to get it right the first time but a few failures in the context of a larger number of successes will not prevent economic reocvery but could prevent a business from taking full part in it.

This really is the time for Ying/Yang balance in business, isn’t it?

Over the past couple of months, the US economy has been showing signs of stabilization and hope for very modest growth. However, as we enter another earnings reporting season, many market analysts fear that we may experience another drop, effectively erasing the recovery gains we have recently experienced, because they are expecting corporations to announce dismal results.

However, if we look at the situation from a longer term perspective, we see a few encouraging signs.

First, the stock market’s rising trend subsided because stock values have sufficiently risen and investors took some profit. From this point of view, the market is taking a healthy pause and investors are making up for some of their past losses.

Second, it is normal to expect that earnings results will be weak. We’re in the middle of the greatest recession in decades and the entire world is feeling it. Analysts are hoping that corporations sufficiently lowered expectations so that the stock market doesn’t take a beating. Fair enough. However, we are facing macro-economic problems of worldwide systemic proportions and any weak financial corporate results would reflect multiple levels and sources of problems, not just bad execution. It’s time to read quarterly reports very carefully and it would behoove corporations to provide full-spectrum explanations, specifically relating certain financial results and ratios to the most prevalent macro-economic conditions affecting their companies and industries. This is one time that companies can blame part of their performance on a very bad economic environment. But generalizations will not convince. Companies need to be specific and make specific commitments to recovery.

Third, we are likely all concerned about job loss and this leads us to focus on what the government and individual CEOs will do to payrolls. Although there is ample cause to be concerned, focusing on such an issue is like looking in the rear view window of a car moving forward. Unless corporations receive information from customers and potential customers that an increase in demand for their products and services is imminent, they will look at past results to make decisions about the future. It’s the only sane way of managing but, as financial analysts and accountants like to remind us at the beginning of every financial statement: “past results are not necessarily an indication of future performance.” And this puts the consumer in full spotlight.

So, where does this leave us in worrying about this worldwide economic mess?

First, it has been said that we are not out of the heaviest part of this recession yet because major financial institutions are still, in fact, broke. Government’s injection of cash is simply a way to keep the economic cycle moving but apparently no progress has been made by financial institutions to clean up their balance sheets. However, there have been discussions between these financial institutions and government to find a way, soon. Furthermore, the US government sent a clear message to bank CEOs that they are not immune to dismissal.

Second, most of us are still working and still spending money, even if it is at a reduced rate and in a more considered fashion. And this is where savvy entrepreneurs can make a difference.

And it’s at this point that we can see some light in all this darkness. Even though companies want us to over-consume so they can continue their linear extrapolations of past results to point to a predictable future, reality does not work in such a fashion. And this is why we turn to the average consumer to see where the bottom is. Consumers need to eat, move, work, heal, bathe, etc. These necessities are what I like to consider the ‘organic’ part of our economy. Growth and stability in such areas indicates ‘organic’ economic stability and growth.

And, it is in these areas that we see potential. For example, all these food safety issues that we experienced over the past year created a need for process re-engineering, or analysis and reconfiguration at very least.

Also, many new products such as cars, refrigerators, washing machines, barbeques have all experienced interesting technological improvements over the past few years. If suppliers are stuck with inventory that has not moved for a few quarters, they are under pressure to cut margins and move inventory.

So, what’s different from 12 months ago? What’s different is 4 financial quarters of a falling bottom. In academic terms, we are not moving along the supply and demand curves to establish new market clearing prices for goods and services. The demand curve, itself, isshifting and this is causing a shift in the supply curve. This is big stuff. In plain English, this means that the need for employees shrank (and likely got eliminated), as did the need for factories, land, and any other resources that go into producing goods and services. In other words, we made too much stuff that nobody wants.

So, for those who still have jobs, it’s important to keep spending. For corporations, it’s important to focus profits on general economic prosperity above-and-beyond the mere survival of one’s company and personal objectives. Where this process broke down is that massive amounts of profit left our economy, in one instance, and we disregarded macro financial responsibility in another instance.

By continuing to focus on basics, our economy can recover, over time, through organic growth and stability. Thanks to egregious greed, the next decade, or so, will see much more humble growth since we need to focus on the basics: food, healthcare, shelter, and maybe transportation. This may seem obvious to the consumer but it has implications for corporate executives - this is what it means to get an economy back on its feet.

By maintaining such a focus, employment can stabilize. And, although net revenues may be flat to modestly up, as long as individual income is stable and predictable, the employed will continue to support the economy by spending on every-day necessities, getting their children to school and spending time with family and friends. Even keeping the dog fed helps the economy with over $20 billion/year in gross revenues to dog food makers, distributors and retailers.

For the entrepreneur, it’s important to look at today differently from yesterday. We have new customers that are spending less, are more deliberate about finding value, but still need stuff - they need food, clothes, transportation, education, health care, moderate activity. And, both consumers and suppliers can use some reassurance that everything is fine as long as we don’t get greedy and impatient.

For the unemployed, it’s important to diligently continue a sharp job search and, as organic growth fuels the recovery, each new quarter can bring a few more jobs until we return to normal employment rates. Here, too, government will need to help us along. (Tangentially, if corporations got bailouts because they owed more than they earned, shouldn’t consumers get bailed out as well? Just a thought.)

In addition, prices need to drop to a point where an average family’s budget is back in balance. Because Americans carried more individual debt than virtually any country in the world, this is probably the most fundamental issue that should be addressed. Both former President Bush and current President Obama provided cash-back solutions to citizens. Bush gave the money in-hand through income tax reimbursement checks. Obama is providing it through a reduction of withholding taxes on pay checks. In either case, however, people lamented that the actual amounts received bore little impact on them personally.

Looking at it simply, except for the price of food in restaurants, which has dropped significantly in the past 8 months, stuff costs too much: cars are too expensive, homes are too expensive, healthcare is too expensive, and so is technology in many respect. Have you seen your home communication bill recently? What does it cost you for cable, telephone, and internet? I remember a $12 cable bill, and a $15 phone bill! I also remember a $1.10 gallon of gas, 12 years ago. Have our salaries climbed as quickly?

It’s not just the financial institutions that are in crisis. The consumer has been in crisis for much longer. We may even argue that because of the consumer’s crisis, the banks failed.

The best way out of this recession is for the average American to become debt-free (except for a home and a SMALL loan on a car), get employed, and live healthier. For this reason, I can easily believe that suppliers of large ticket items and luxury goods will experience a very challenging sales environment and responsible, employed families will continue to help us out of this recession through regular, organic growth.

Government will need to ensure the correct circulation rate of the economic cycle until it can do so on its own because too many parts of the free market system are broken. Nonetheless, the free market system remains the best means of managing resources known to Man… as long as you don’t break it.

It’s now a few days into my JPM prediction and you may be wondering why, with the stock clearly below my $20 floor, I’m still optimistic?

Nothing will happen in a day or two. Technicals showed that the price of this stock needed to ease up a little. That said, today’s pivot point analysis shows S2 at $17, S1 at $18.24, and you guessed it, the pivot point at $20.

Furthermore, today’s daily price chart (based on 5-minute dojis) shows that JPM suffered the ill-effects of being in horrible company in its sector. Nonetheless, Fast Stochastic indicators show that we are nearing a price decline bottom. No signal of direction change as of yet but we are getting close the bottom percentile range. In addition, if price continues to decline tomorrow, RSI may hit the 20th percentile mark, matching its lowest mark in some time. (Typically, when this happens, price reverses upward.)

Lastly, during the last 15 minutes of trading, today (Thursday),we saw a solid price jump above the midline of the Keltner Channel and price range remained above the midline, albeit not as solidly as one would like to see.

I reiterate that JPM is solid as long as the macro-enviornment cooperates. Unfortunately, dinosaurs like CITI and GM are in bad need of resolution so the rest of the market can continue to heal. It really is a difficult time when one must weigh employment security against stabilizing the financial markets.

There are, however, a few bright spots in the market, vindicating my long-standing prognostications on low-end retail, healtcare IT, and alternative energy: Wal-Mart showed excellent performance, today, under the circumstances, with a 5.1% increase in sales. A few days ago, First Solar announced its acquisition of a competitor and healthcare IT is about to break through with the support of the White House.

On this last item, healthcare IT will have the political and financial support it needs to thrive. However, support from medical practionners cannot be assumed to be readily available. In effect, according to my week-long inquiries, medical practitionners continue to maintain their skeptical demeanor towards automated solutions. And I can understand, to a certain degree. IT is famous for glibly shrugging off bug after bug and technological incompatibilities like they are no big deal. If a stock market trading station goes down, oh well, there’s insurance for that. However, if a wireless network skips a few packets and doesn’t deliver a vital bit of heart monitoring information, it could mean a patient’s life-critical status escapes the attention of an attending nurse.

So, having a solid understanding of the players in healthcare IT and what, specifically they deliver, can help us navigate the multifaceted sea of vendors in order to pick out the safest solutions to invest in and explain to medical practioners that automation can be most beneficial in certain areas, namely document management, processing, delivery, backend process management, and non-vital status monitoring, to name a few obvious ones.

Clearly Misys, eClinicalWorks and the like seem to have a leg up, at this time. But their success depends on physician support and adoption.

I commend the current American government for their solid commitment to reducing the cost of healthcare through various means, including automation, but let’s ensure that medical practitioners are at the forefront of learning about technology and help guide this evolution judiciously in this very delicate and vital area of society. As President Obama and Senator (Sir) Edward Kennedy said earlier today:”let’s put the patient first.” And, let’s ensure that the doctor is an integral part of the process. Let’s ensure that we don’t automate for the sake of automating without regard for how the practice of medicine will change. There is such a thing as too much automation.

Steady as she goes, folks.

JP Morgan has a history of bailing out the American economy. And it did so again in 2008. In concert with the Fed, they judiciously planned a way to prop up Wall Street as it disintegrated before everyone’s eyes. JP Morgan acquired Chase, as the Fed let Leehman fail and propped up Citi and others. This is one of the reasons I like JPM. It has a history of  doing the right thing at the right time. Yet, with such a worldwide system failure of the financial markets, even a JPM is not immune. Nonetheless, those that weather the storm get to live to see the sunshine again.

JPM has had an intersting 6 months and may be in a position to be one of the first to emerge from this financial chaos. Of course, may moving parts need to function properly again but I believe that the JPM piece is working just fine and it should reap the rewards as soon as the rest of the system starts to come together.
Let’s look at the numbers. Let’s go back to August 2008 and see how JPM has fared and attempt some interpretation of the future.

The trouble starts at the beginning of October  2008. JPM took the bulls by the horn and, in a deal with the Fed, agreed to buy one of the largest failing financial institutions on the Street. Nonetheless, the following months showed that even JPM cannot withstand a worldwide systemic breakdown.

Starting mid-November, this stock, as well as everyone else, goes into free-fall, losing half its value on moderate to high trading volume. At this point in time, looking at a doji chart could have led big investors to declare that the sky is falling and will continue to do so until the stock hits $0.

At slightly below $20, when RSI hit a record period low of approximately 18, we see additional indications of a low point. Price is below the Bollinger Band low threshold and the doji pattern indicates a narrowing of the trading range. At this time the Fast Stochastic indicator hints towards a turnaround signal at the 10th percentile. And, the next 3-4 weeks we see a rally.

Although the 200-day SMA shows a decline, it is not very useful in understanding the current turmoil. Yet, it nonetheless shows a decisive downtrend. However, by looking at the 10-day and 20-day SMAs, to this point in time, we see a clear indication of the bull and bear rallies. Although it was not useful in announcing JPM’s positive turnaround at approximately $18, it did reliably indicate the bear turnaround when it peaked at approximately $38. The Fast Stochastic indicator was most reliable overall. Combined with the RSI, Bollinger Bands and doji, we got a pretty clear sense of market inclinations.

But the big question still remains: what does this mean for the future? To mid-December 2008, one could have concluded that stability was returning to this stock, and if it is an indicator of the rest of its sector, maybe good news was on the horizon for financial stocks, generally.

Maybe it was a holiday season reprieve, maybe it was hope of change in Washington, DC, but not much happened until the first few trading days of the new year. Then, a near falling star doji is formed on the first day. The second day, a clear drop is recorded and, on the third day, a falling star doji has clearly formed. At this point, the Fast Stochastic indicator signals a bear market. This could have taken a few people by surprise because sales volume was relatively low since the third week of December 2008 and RSI was at the mid-point. Likely, disappointing wholesale and retail numbers as well as rising unemployment had investors second-guessing their commitments in the market.

Sales volume increased and investors held their breath for another plunge. In the second to third week of January, the Fast Stochastic indicator showed the possibility of a trend reversal to growth as RSI hit the 20th percentile, stock price dropped to approximately $12 and clearly broke the lower threshold of the Bollinger Band yet again. And this started the second large rally since September 2008.

Between mid-January 2009 and the present (end February 2009), we see that JPM’s price has varied in an increasingly narrow range with the 10-day and 20-day SMAs crossing more often and in shorter time intervals, albeit in an overall decreasing direction.
In addition, plotting a trendline between lows indicates a possible flattening. Interpretation: it’s getting harder to form new lows. Also, with the dollar gaining some strength against the Yen, we see one source of this pricing support.
Simultaneously, plotting a trendline between price highs shows a possible smoothing as well.

We need to keep a close eye on the first few trading days of the upcoming week to see how the market responds to a ‘dark’ doji that may be indicating a peak. However, looking at the Fast Stochastic indicator, which has been bullish for some time, we see that it is not even hinting at a peak/trend reversal signal. RSI is at 45 and has rarely grown past the 60th percentile in the last 6 months. Yet, a good part of February shows that JPM enjoyed an RSI well beyond the 55th percentile. Combined with a strengthening dollar, I get the feeling that market and macro-economic conditions are trying to combine to form a price bottom at or around $20.
Switching to a 3-month chart, the last doji that I see shows a top price of approximately $24. Breaking a $25 ceiling would indicate a credible attempt at a bullish trend reversal as long as the macro-economy cooperates.

We all need to keep a close eye on the news, early next week, and hope that the sentiment is high. If the economy holds for a week to 10 days, volume remains solid and a trading band of $24 to $28 can be maintained, we may indeed be seeing a trend reversal.

I like JPM because it has done everything right, acting quickly and decisively, very early in this market meltdown, in cooperation with the Fed, with government, and in the better interest of its investors. From what I’ve heard, its fundamentals are solid, relative to the current economic environment, and it will be completing its integration of Washington Mutual (a well-liked retail bank on the West Coast) by October 2009. It made smart acquisitions in these troubled times and became a coast-to-coast banker in the process.

Let’s hope that with Wall Street setting up shop on Main Street, entrepreneurs can see hope in the form of reasonable credit, very soon, so they can help alleviate a now 10.1% unemployment rate in some parts of the country (e.g. California).

Humana’s stock got battered today, after President Obama’s statement on the news, last night, about reducing payments to health insurance companies, hospitals, etc.

For those who were eagerly anticipating a supportive gesture towards the ailing healthcare industry in the US, the President’s first statement leaves me perplexed. Perhaps it’s half a statement and the rest is yet to come.

It’s easy to understand that he sought to “stop the bleeding of cash” to providers and payers who were overcharging for many services. However, this also turns off the cash flow necessary for funding technology development projects. And, the President clearly put healthcare at the top of his priority list with “computerizing health records” as a key initiative.

So, if cash flow to providers and payers is decreasing, how will they fund new IT projects that are so badly needed?

The President has an interesting dilemma to manage. On the one hand, he tries to close out what seem to be egregious expenditures but, on the other hand, needs to ensure that required investments in business infrastructure continue to flow. Is he changing how this money will flow (by changing its source) or is he simply stopping the flow altogether?

A healthcare IT product and service provider needs to know. Where will the money come from to develop a badly needed healthcare information system upgrade?

Let’s see what the President’s next move will be and let’s hope that it’s very, very soon. More jobs are at stake.

Here is a link to some wonderful charts of the Dow Jones Industrial Average since 1895, on which you can find all the major events that shook the world. 1895-1909http://www.djindexes.com/mdsidx/index.cfm?event=showavgDecades&decade=18951910-1919http://www.djindexes.com/mdsidx/index.cfm?event=showavgDecades&decade=19101920-1929http://www.djindexes.com/mdsidx/index.cfm?event=showavgDecades&decade=19201930-1939http://www.djindexes.com/mdsidx/index.cfm?event=showavgDecades&decade=19301940-1949http://www.djindexes.com/mdsidx/index.cfm?event=showavgDecades&decade=19401950-1959http://www.djindexes.com/mdsidx/index.cfm?event=showavgDecades&decade=19501960-1969http://www.djindexes.com/mdsidx/index.cfm?event=showavgDecades&decade=19601970-1979http://www.djindexes.com/mdsidx/index.cfm?event=showavgDecades&decade=19701980-1989http://www.djindexes.com/mdsidx/index.cfm?event=showavgDecades&decade=19801990-1999http://www.djindexes.com/mdsidx/index.cfm?event=showavgDecades&decade=19902000-2009http://www.djindexes.com/mdsidx/index.cfm?event=showavgDecades&decade=2000 

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I’ve heard that some financial stocks are up and that the price of gold is showing the begging of a stability trend. In addition Sunpower, a leading solar technology maker, posted record breaking earnings, today.

That’s interesting. And I wish I could bet real money on that. I certainly am investing some hope into these observations.

There are signs that the government is moving towards relieving banks of their bad debts which may be having an effect on gold… I’m guessing. Well, let’s see where this goes over the next few weeks, maybe couple of months. If this faint sparkle of light can shine onto the lending industry, then homeowners and entrepreneurs alike may be able to breathe a little easier.

But the overall economic environment is so delicate, at this point, that even the slightest negativity can undo this fledgling hope for recovery.

Over the next week or so, this blog will begin to focus on some fundamental and technical analysis of a few financial industry corporations to determine if a macro trading trend is showing anything different than the last year.

The thing with downward slopes on price charts is that they eventually flatten out. And I’m not sure what happens first, the mathematical trend shows up and tips off the public or public sentiment pushes the charting? We’ll look at some finance industry players to see if we can spot a trend and compare it to public sentiment.

Gee, this can be our very own socio-economic study! If anyone would like to help with this, please post a comment or otherwise send me a note. The greater the team, the broader and deeper the study can be. On my own, I may be able to track 4 stocks and a couple of ETFs but think of what we could do as a team? Can we, together, predict the Turnaround based on macro-economic trends and probabilities, corporate financial statements, and market timing?

Please join me in pulling up some information on financial industry companies that matter - fundamental analysis (ROI, key ratios, notes to financial statements, corporate news, etc), technical analysis (chart interpretation), and economic analysis as it pertains to fixing what ails corporate balance sheets on Wall Street. Every little bit helps and I will compile this information into regular updates on this blog. Please check out the Marketspeak Blog at: www.accrongroup.com/wordpress1

Yesterday, President Obama announced that the US’s top problem is energy independence and has started the process of improving the country’s commitment to reducing pollution and to start developing alternative energy sources in tandem with building automobiles that are more energy efficient. And, all this would culminate in developing a new energy landcape in the USA and launching more appropriate vehicles by 2011. This plan will create hundreds of thousands of new jobs in growth areas and thereby tied this in to our growing unemployment concerns.

OK, so we now have focus and commitment in Washington, D.C.

Today, Wall Street is digesting yet another indication that consumer confidence is very low at this time.

We have been analyzing the situation from high up. But if we brought our perspective lower down, to the level of the average consumer, what would we see? What would it take for an average consumer to feel confident in the economy, again? Aside from the obvious job security issue, what, specifically, would be required?

I will hazard a guess. First, American consumers have typically been the most in-debt consumers in the world. We learned that we can take money we don’t actually have and spend it on whatever we want. Somehow, interest payments become a distraction and as long as the credit company does not close our accounts, we continue to spend. And we spend like this because we are encouraged to do so by A LOT of unrealistic and some times misleading advertising (think of many fincancing and credit advertisements). As an example of extravagances, even as recently as the past Christmas season, one of the worse in retail history, Lexus was churning out ads on TV that showed how wonderful it would be to receive a shiny new car for Christmas, rekindling feelings from childhood when one’s parents found them the absolute perfect toy. These are cars that sell for no less than $35,000 and mostly sell in the $45,000+ range. So, debt management is likely a heavy issue on the minds of the average consumer, these days.

As a second data point, a spike in the cost of crude oil, over the past couple of years, eventually led to the destabilization of prices on most goods and services and prices for everything rose at a worrisome rate. Now, with economic uncertainty and the fact that the price of oil dropped, there seems to be an earnestness on the part of merchants to lower prices, at least temporarily. And, actually, many merchants are now going out of business due to a sudden and sharp drop in demand. So, consumers have the power to “right-price” the market and Big Oil has the power to destabilize economies.

Thirdly, the State of California, which is experiencing some of the highest unemployment in the nation, at this time, is also running out of money very quickly. The State Legislature has been deadlocked in budget discussions for months and will soon need to issue IOUs to taxpayers expecting a refund for overpayment. Yes, it’s that bad. So, consumers, at least in California, will be focused on managing cash flow, pinching pennies, so to speak, wherever possible. As a point in fact, one of my last postings highlighted an article which showed that 90% of women surveyed were planning no new clothing purchases, at all, in 2009.

So, to summarize the consumer profile, as we all probably expect, we are looking at a very conservative buyer experiencing job uncertainty, delays in payments which are due to them, and still carrying debt beyond mortgages.

To add more context to the very real challenges that consumers, former workers and potential entrepreneurs are facing, SBA loans are still ridiculous. Interest rates vary between 4% and 6% nationwide. In California, at least with the lenders that I spoke with over the past few days, small business owners can expect a 6% variable rate and need to secure the loan with real assets. Yes, that means one’s home, in most cases. Frankly, this is appalling, considering the extreme efforts of both the federal government (in the for of TARP) and the Fed (in the form of decreasing interest rates to 0.5%)!

I was told by one lending institution that the reason they are lending at 6% is because the money they are lending is coming from deposits, on which they need to pay interest, instead of from money that has trickled down from TARP.

OK, so where is the TARP money? And I’m not asking nicely. Small businesses need this money, very, very badly… and NOW! It’s time to stop playing shell games. Many people are sufficiently educated and experienced to fend for themselves by launching a business in service of their communities and the banking system is playing games with our own money - yes, taxpayers money - the same taxpayers that need this money to provide needed products and services which, in turn, help them feed their families. And the situation is getting worse.

So, here’s a suggestion. I would ask the federal government and the Fed to ignore all those financial institutions that received money on the first TARP injection and go straight to the community banks and other legitimate lending institutions that have been doing the right thing for their communities and the entrepreneurs they serve and provide them with TARP. This way, those who really need the money on Main Street in Anytown, USA, can get down to business and start hiring as many of the unemployed as possible. In this way, the average consumer can look forward to a stabilization of the job situation in their community, in a short term way, while waiting for President Obama’s Big Bets in Alternative Energy to pay off (and I, for one, am confident that they will), over the next few years.

Now, back to those financial institutions that received a first round of TARP money. It’s time to call them to Washington, D.C., again. It’s time for a progress report. It’s time to fine, confine, and/or remove irresponsible managers, unceremoniously. And, it’s also time for the public to get a clear understanding of how Wall Street is fixing itself. This is not beyond the understanding of many well-educated and concerned taxpayers. If we are to have any faith in the reconstructed financial system and those who are executing on this request, we need to know what’s going on. More transparency, please. (And, the only reason this request is being made is that expected results have not touched Main Street and this has happened without explanation.) So, consumers, those that are also entrepreneurs, are not feeling the support they were promised. In a time when entrepreneurship can be the saving grace of many families, this certainly does not foster a sense of hope in a community.

Therefore, for a Positive Consumer Profile to exist, I believe that each consumer would need to feel that they are in control of their debt, that there is a sense of stability in their capability to provide for their families on an on-going basis and that the worse of times is behind them. But we are some way from that.

For this to come into existence, I believe that a resetting of economic standards will be necessary. For now, since there are more employees than jobs, salaries and wages are vulnerable to decreases. In turn, this puts downward pressure on prices for goods and services and ultimately resets purchasing priorities. However, until consumers feel that it is safe to spend again, a stabilization trend cannot be established. There has been discussion about continuing former President Bush’s tax rebate incentive plan for consumers in order to provide consumers with spending money. Notwithstanding that almost every taxpayer that I know would not dispute such an offer, the more interesting question is how much would each family really need?

In reality, families have been saving rebate money or paying down debt before spending any of it. This is actually a great idea however it doesn’t help the economy in the very short term, which was the intent of the incentive. This is when the government should say: “Oh, Dear! It’s worse than we thought!” And I’m sure that this is exactly what happened. So, if we were to continue the incentive, what should be done in order to make it truly effective?

If the government wants to quickly build a positive consumer profile, it will need to address consumer debt and living wages through employment uncertainty, underemployment, and unemployment until businesses can re-configure themselves to new market realities and start hiring again.

And this brings us, full-circle, back to our dependence on employers. Businesses cannot do their part if financial institutions play cash flow games. If government truly wants to help, it should swiftly intervene at this level.

Yet, financial institutions point to decrease in demand and could protest that there are too many suppliers of goods and services and the market needs to rebalance itself before any bank can get a clear picture of the demand side. It’s a sad reality.

So, from the entrepreneur’s perspective, we need to better understand the New Reality of Demand. Instead of desperately trying to preserve the past, because it is so familiar, we need to embrace the future. Consumers have short-term needs, right now, based on low price and basic value. And, this will not last forever. We need to have the vision of serving our customers today with an eye to building towards tomorrow. But, we need to get through today, first.

And, for the consumer, today is about simultaneously reigning-in debt, securing employment, and stabilizing prices. For this, it would be wise for consumers to take a hard look at their current lifestyle and quickly reduce costs (if not already done) then determine what they want and can afford for the next week to 3 years.

Entrepreneurs need to get this information as quickly as possible and recast their demand reports, if not already done. This can be done through close relationships with individual customers, for sure, but think about all the social networks and blogs that exist across the internet. Find a collaboration and social networking expert. Have them team up with your marketing and merchandising experts.

Up until recently, marketing analysts, myself included to some extent, only saw (and froze on) the trend of decreasing demand. It’s time to go beyond that, now, and look for new areas of demand. The market has hit a giant Reset button and the faster we can acknowledge this, the faster we can act appropriately to re-align consumers and businesses.