I’m writing this column two weeks before Thanksgiving. I think the business world has changed a lot in the past year, but many people are so focused on looking backwards that they may have missed it.
Business in the domestic manufacturing world has turned decisively better, yet we see a torrent of auctions because legal bureaucracy moves slowly. The two big Detroit auction houses, Hilco and Maynard’s, have been selling off the rationalized flotsam of GM, Ford and Chrysler. These are the forlorn assets of yesterday’s Detroit and they will continue to pour into the system into 2011.
Still, looking backwards we have the huge overflow of foreclosed and soon-to-be foreclosed residential property. The muddling legal process helps keep the backlog of homes trickling onto the market, which will keep house prices at the shrunken “new normal” for years.
I think we can ascribe 9.5 percent unemployment primarily to the housing bust. When you are building 500,000 new houses a year instead of two million, you need a lot fewer hammer swingers, plumbers and drywallers.
But focusing on the Detroit implosion and the real estate bust is the preoccupation of a negative and biased press. What I’m seeing today is the continuation of a significant upturn in business for machining firms. This coming New Year should be the best since 2007.