Our Jiffy Recovery

Bob Froehlich Hartford Investor March 11, 2011

If you say "jiffy" to the younger generation, they think Jif peanut butter. Jif, by the way, is a brand of peanut butter made by the J.M. Smucker Co., which purchased the brand from Procter & Gamble in 2001. And, for any of you history buffs out there, the original Jif peanut butter made its debut in 1958. That's not the "jiffy" I'm referring to in this commentary. What I'm talking about is when someone says, "I will see you in a jiffy." Or, "I will see you in a jif." When used this way, it's slang for a very short time. In its slang meaning, the time is arbitrary and undefined. Saying, "I'll see you in a jiffy," doesn't mean, "I'll see you in 90 minutes, or in 10 minutes."

Being the research guy that I am, I actually discovered that beyond its slang usage, jiffy is a real measurement of time. In the computer industry, one jiffy equals 1/100th of a second, or 10 milliseconds. In the electronics industry, a jiffy is the time between cycles of an alternating current, 1/50 or 1/60 of a second. Finally, in physics, a jiffy is the time taken for light to travel one fermi, which is 10-15 meters. For the purpose of this commentary, let's just say that a jiffy is really, really fast. There may not be a better way to define this recovery than to say it happened in a "jiffy." It doesn't matter if you're looking at our economy, the global economy, our market, or the global markets-the story is the same-everything has recovered in a "jiffy." Here's some proof.

Now you already know that I'm a David Letterman fan, as I love his top 10 lists every night. This is one of the reasons I do my top 10 themes every year. So, as a sort of a tribute to David Letterman, here are not one, not two, but 10 issues that recovered in a jiffy.

Talk about a jiffy! Did you see what happened at General Motors? General Motors posted its annual results, and it was the best performance in the last decade. That's a jiffy turnaround, from the brink of collapse, to the best performance in a decade.

One thing's for sure-the U.S. consumer certainly recovered in a jiffy. Take February's Consumer Confidence Index, for example. It rose 5.2 points to 70.4. That 70.4 level, by the way, is a three-year high.

Make no mistake about this one-earnings clearly recovered in a jiffy. One has to look no further than retail bellwether, Macy's, for proof. Macy's fiscal fourth-quarter profits grew an unbelievable 50%!

It wasn't that long ago that corporations like Volvo were sitting on a boatload of cash. And now, in what seems like a jiffy, they have plans to spend it. Specifically, Volvo plans to invest (spend) $11 billion worldwide over the next five years.

Just in case you missed it, China announced plans to build 45 new airports in the next five years. It wasn't that long ago when no one would build anything. Now China comes along, and it's building 45 new airports in five years.

It seems like only yesterday when we were debating deflation vs. inflation. Wait a minute-that's still going on today, except the only one left debating it is Federal Reserve Board Chairman, Ben Bernanke. While he continues to debate himself, inflation has appeared in a jiffy. Currently, inflation in emerging-market countries is running at right around 8.0%. Specifically, inflation is +8.4% in Brazil, +7.8% in Hong Kong, and +6.8% in Singapore.

Although existing home prices remain at decade lows, new home prices have recovered in a jiffy. The reason is simple: New home prices are not affected by the foreclosure problem that hangs over existing home prices. In fact, according to the U.S. New Home Price Index, compiled by ISI (International Strategy & Investment), from April 2009 to January 2011 (which is the latest reading), new home prices are actually up 9.9%.

Please pay close attention to this one. In January of 2009, Japan's PMI (Purchasing Manager's Index) stood just below 30. Anything above 50 is bullish, and anything below 50 is bearish. So, in January of 2009, things couldn't have been more bearish. Fast-forward to where we are today. The most recent Japan PMI is for February of 2011, when it came in at 52.9%. Wow, from below 30 to over 50 in a jiffy.

In January of 2008, global steel production stood at 1.4 billion metric tons. By January of 2009, it had collapsed to 1.0 billion metric tons-a reverse jiffy, if you will. The most recent reading, which is for January of 2011, puts global steel production at 1.49 billion metric tons, which is a decade high.

Boy, how time flies. It doesn't seem that long ago when I was talking about being in the third year of the presidential election cycle, and what do you know-we're at the exact same place again! Here's why this is important. The S&P 500 Index1 has never declined in year three of the presidential election cycle and, you guessed it, 2011 is year three of the presidential election cycle. By the way, on average, the S&P 500 Index1 was up 17% in the third year of the presidential election cycle.

So, as an investor, what does all of this mean? Well, I think it means that both the markets, and the economies around the world, will continue to improve (and sometimes collapse) at the speed of light. Every single minute of every single day, some market is open somewhere, and something is happening somewhere that will affect every other market, economy, and investment in the world. So, my strategy here is simple: You cannot afford to go it alone. You need to have the advice and counsel of a financial advisor. When things moved slowly, and somewhat predictably, going it alone seemed like a good idea. However, in today's "jiffy" changing market, it makes it almost impossible to try and go it alone. Investing is no longer some part-time hobby, rather, it's a full-time job. Things will continue to get more complex, and move even faster in the future than they move today, which will make an even more compelling case to use a financial advisor. Do me a favor-call one in a "jiffy," if you please.

In closing, let me end this jiffy commentary with one of my favorite quotes of all time that talks about how quickly things can move and change. "Events can move from the impossible to the inevitable without ever stopping at the probable." Those words were uttered by Alexis de Tocqueville, a French political thinker, and historian.

P.S. Is anyone else craving a PB&J sandwich?

Print this commentary

Share This:

Follow The Hartford and Dr. Bob Froehlich on:

Twitter

Facebook

* Denotes required field

First Name

Last Name

* Email Address

We will not share your email address with anyone. The Hartford Privacy Policy

* Email Format HTML Text

I am a Financial Professional

By clicking Subscribe, you agree to The Hartford's Terms of Use. You may unsubscribe at any time.

PAST ECONOMIC PERFORMANCE DOES NOT ENSURE FUTURE RESULTS.

The views expressed here are those of Dr. Bob Froehlich. Dr. Bob Froehlich's views are not necessarily those of The Hartford and should not be construed as investment advice. They are subject to change. All economic and performance information is historical and does not indicate future results.

Dr. Bob Froehlich’s sources of information include Bank of Canada, The Bank of England, Bank of Japan, Bloomberg News, Business Roundtable, China Investment Corporation, CIA. World Fact Book, CNBC, Congressional Budget Office, Deutsche Bank, The European Monetary Union, Federal Reserve Board, The Financial Times, Freddie Mac, FOX Business, Goldman Sachs, International Monetary Fund, International Strategy & Investment, Journal of Commerce, Merrill Lynch, PIERS Global Intelligence Solutions, Strategas Research, Thomson Reuters, Union Bank of Switzerland, U.S. Census Bureau, U.S. Department of Commerce, U.S. Department of Labor, U.S. State Department, U.S. Treasury Department, The Wall Street Journal, and The World Bank.

1 The S&P 500 Index is a composite of the 500 largest companies in the United States.

“The Hartford” is The Hartford Financial Services Group, Inc. and its subsidiaries, including the issuing companies of Hartford Life Insurance Company and Hartford Life and Annuity Insurance Company. Variable annuities are issued by Hartford Life and Annuity Insurance Company and by Hartford Life Insurance Company, and are underwritten and distributed by Hartford Securities Distribution Company, Inc. The Hartford Mutual Funds are underwritten and distributed by Hartford Investment Financial Services, LLC.

You should carefully consider investment objectives, risks, and charges and expenses of The Hartford Mutual Funds before investing. You can find this and other information in the Funds' prospectus, which you can obtain from your investment representative or by calling 888-843-7824. Please read it carefully before you invest or send money.

You should carefully consider the investment objectives, risks, and charges and expenses of The Hartford variable annuities and their underlying funds before investing. You can find this and other information in the prospectus for the variable annuity and the prospectuses for the underlying funds, which you can obtain from your investment representative or by calling 800-862-6668. Please read them carefully before you invest or send money.

401 retirement programs (excluding 401(a)) are funded by group variable annuity contracts (countrywide: HL-14991; NY & FL: HL-14973) and group variable funding agreements (HL-16553 and HL-16553 (NY)) issued by Hartford Life Insurance Company (Simsbury, CT), or by The Hartford Mutual Funds, which are underwritten and distributed by Hartford Investment Financial Services, LLC. 401(a), 457, and 403(b) retirement programs are funded by group variable annuity contracts (HL-15811, HVL-11002 and HVL-21002 series, HVL-14000, HVL-14001, HVL-20000, HL-17402, HL-14848, HL-17402 and HL-15420 with Rider HL-16957) and group variable funding agreements (HL-16553 and HL-16553 (NY)) issued by Hartford Life Insurance Company (Simsbury, CT). Group variable annuity contracts are underwritten and distributed by Hartford Securities Distribution Company, Inc. where applicable. Retirement programs can be funded by group fixed annuities (HL-19799) issued by Hartford Life Insurance Company (Simsbury, CT) and can also invest in mutual funds through custodial accounts. Hartford Securities Distribution Company, Inc. (member FINRA and SIPC), a registered broker/dealer affiliate of The Hartford, has established certain service programs for retirement plans, including defined contribution employee retirement benefit plans, through which a sponsor or administrator of a Plan may invest in mutual funds on behalf of Plan Participants.

You should carefully consider the investment objectives, risks, and charges and expenses of the mutual funds or The Hartford's group variable annuities, group variable funding agreements, and their underlying funds before investing. You can find this and other information in the fund's prospectus, which you can obtain from your investment representative. You can also find this in the disclosure documents (whichever is applicable). To obtain the applicable product prospectus or disclosure documents and the underlying fund prospectus, call 1-800-528-9009. Please read them carefully before you invest or send money.

“The Hartford” is The Hartford Financial Services Group, Inc. and its subsidiaries.

Distributed by Hartford Securities Distribution Company, Inc.

All information and representations herein are as of 3/11, unless otherwise noted.

P6170_030711 104623 3/11

Updated 03/07/2011 The Hartford's Corporate Website thehartford.com Company Info About UsInvestor RelationsNewsroomCareersOur Products Individuals/FamiliesBusiness Site Footer LegalPrivacyProducer Compensation

var _hbEC=0,_hbE=new Array;function _hbEvent(a,b){b=_hbE[_hbEC++]=new Object();b._N=a;b._C=0;return b;} var hbx=_hbEvent("pv");hbx.vpc="HBX0200u";hbx.gn="ehg-hartfordfireinsurance.hitbox.com"; //BEGIN EDITABLE SECTION function _hbxStrip(a) { // I called it _hbxStrip here, may be renamed if desired just keep it consistent a = a.split("|").join(""); a = a.split("/").join(""); a = a.split("!").join(""); a = a.split("&").join(""); a = a.split("'").join(""); a = a.split("#").join(""); a = a.split("$").join(""); a = a.split("%").join(""); a = a.split("^").join(""); a = a.split("*").join(""); a = a.split(":").join("-"); a = a.split("~").join(""); a = a.split(" ").join("+"); return a; } //CONFIGURATION VARIABLES hbx.acct="DM570808J5SR;DM570808AODW"; hbx.pn=_hbxStrip(document.title);//PAGE NAME(S) //hbx.pn="PUT+PAGE+NAME+HERE";//PAGE NAME(S) hbx.mlc="/About+Investing;/HI/About+Investing"; hbx.pndef="title";//DEFAULT PAGE NAME hbx.ctdef="full";//DEFAULT CONTENT CATEGORY //OPTIONAL PAGE VARIABLES //ACTION SETTINGS hbx.fv="1";//FORM VALIDATION MINIMUM ELEMENTS OR SUBMIT FUNCTION NAME hbx.lt="auto";//LINK TRACKING hbx.dlf="n";//DOWNLOAD FILTER hbx.dft="n";//DOWNLOAD FILE NAMING hbx.elf="n";//EXIT LINK FILTER //SEGMENTS AND FUNNELS hbx.seg="";//VISITOR SEGMENTATION hbx.fnl="";//FUNNELS //CAMPAIGNS hbx.cmp="";//CAMPAIGN ID hbx.cmpn="";//CAMPAIGN ID IN QUERY hbx.dcmp="";//DYNAMIC CAMPAIGN ID hbx.dcmpn="";//DYNAMIC CAMPAIGN ID IN QUERY hbx.dcmpe="";//DYNAMIC CAMPAIGN EXPIRATION hbx.dcmpre="";//DYNAMIC CAMPAIGN RESPONSE EXPIRATION hbx.hra="";//RESPONSE ATTRIBUTE hbx.hqsr="";//RESPONSE ATTRIBUTE IN REFERRAL QUERY hbx.hqsp="";//RESPONSE ATTRIBUTE IN QUERY hbx.hlt="";//LEAD TRACKING hbx.hla="";//LEAD ATTRIBUTE hbx.gp="";//CAMPAIGN GOAL hbx.gpn="";//CAMPAIGN GOAL IN QUERY hbx.hcn="";//CONVERSION ATTRIBUTE hbx.hcv="";//CONVERSION VALUE hbx.cp="null";//LEGACY CAMPAIGN hbx.cpd="";//CAMPAIGN DOMAIN //CUSTOM VARIABLES hbx.ci="";//CUSTOMER ID hbx.hc1="";//CUSTOM 1 hbx.hc2="";//CUSTOM 2 hbx.hc3="";//CUSTOM 3 hbx.hc4="";//CUSTOM 4 hbx.hrf="";//CUSTOM REFERRER hbx.pec="";//ERROR CODES //INSERT CUSTOM EVENTS //END EDITABLE SECTION