Larry Kudlow aside, there are a few fairly intelligent people venturing forth with the argument that if nothing else, things aren’t getting worse anymore. That’s not to say that they are getting better just that the rate of decline is abating.

Across the Curve has an analysis of the auto numbers that came out today.

Motor vehicle sales, despite the plunge in January, begin Q1 falling less rapidly than they did in Q4. Sales began Q1 down at a 38% annual rate, versus a -59% pace for all of Q4. Production schedules, meanwhile, show a similar pace of decline in Q1 as in Q4—down at a 54% annual rate in the current quarter versus the -48% pace in the prior quarter. The implication is that motor vehicles will subtract less from real GDP in Q1 than the 2 percentage point subtraction from growth in Q4. (Ex motor vehicles, real GDP fell at a 1.8% annual rate in Q4.)

On Clusterstock, Henry Blodget pointed to these data sets:

The rate of decline in home prices finally appears to have peaked

Today’s Pending Home Sales ticked up 6% in December.

Yesterday’s loan officer survey showed fewer banks than last month tightening loan standards.  Fewer banks are tightening lending standards for mortgages, and consumer demand for mortgages is increasing.

Demand for consumer loans has stabilized: 

Banks are making more consumer loans:

Consumers are saving more again (savings rate is still low in historical terms, but it has ticked up considerably). 

Yesterday’s ISM showed a positive change in trend.

He supports all of this with graphs, so visit his sight for further details.

I’m not going to get carried away with optimism but by the same token you can’t deny the logic. There has been a tremendous dose of monetary stimulus administered to the economy and it takes time to work its way through the system. We may be seeing some first signs of that happening. I think it’s probably just as important to keep in mind that the average American citizen received a tremendous jolt in September as he watched every purported leader of the country run around in panic screaming about the sky falling. Naturally they did what any reasonably intelligent person would do and pulled in their horns. Don’t be surprised if they start testing the waters a little. Of course, it would help if those same leaders weren’t still running around acting like they still don’t have a clue.

So that’s the optimistic case. The pessimist says that there is still so much peril about in the world that you can’t make anything out of these numbers. I can’t deny that one. Protectionism, riots, sovereign default risk, currency crises; you don’t have to look far to make you crawl back into the cave. A lot can go wrong and probably will.

And so, here I sit on the fence. I want to believe in the positive signs and the prospect of the consumer starting to spend again but my gut says that there is still a little more pain-maybe one more big explosion-coming before we truly do start back up.