The Beige Book

On Wednesday, the Beige Book came out. What is the beige book you may ask? No - it does not foretell Fall's hottest fashion trends, but it attempts to summarize the "current economic conditions," and look at the trends in each major U.S. city.

The results...about what I expected.

To be quite honest, I did not attempt to read the entire 48 pages. Who has time for that? However, I did read the 4 pages on New York City. The economy of NYC has "stabilized," which is Fed-speak for, the economy is not horribly out of control, but it is not going to start increasing any time soon. As for sales, the auto dealers have reported some increase, but retail sales are well below 2008 levels. The explanation: "cash for clunkers," of course. There was a great incentive to buy a new car in the recent months, but no such comparable incentive in the retail industry (I seriously think that we should adopt the European policy of tremendous sales in January and July).

As for hotels, occupancy levels were in the mid-80s the last couple months, which is not too bad considering the huge decline in business travels. Great news for leisure travelers - the rates have fallen between 25 and 30 percent. However, Broadway has not taken the same cue - in order to offset the 10% decline in attendance, the ticket prices have raised by 16%.

I think anyone who has turned on the TV or looked at a newspaper, even once, in the past 6 months could predict the current state of the housing market in NYC. The vacancies of office buildings are high because so many companies have downsized or gone out of business, rents have fallen (which is great for me), and the price of new condos have fallen sharply.

The job market is not quite as bad now as it has been. Though the unemployment rate is sky high, some companies have begun to bounce back and hire new staff, but do not expect a high salary - asking prices are about 10% below what they were a year ago. As for loans, everyone is still afraid to borrow.

The wrap up: It's a good time to visit New York City. The hotels are cheap, and the retailers will likely be offering discounts. As for a show, do not expect a good deal to see a Broadway play, so try off-Broadway. For people just moving to New York City, you can find low rent, but maybe not a job, so be wary. It's a bad time to be a retailer - low consumer confidence is never good.

The real problem: The low consumer confidence. I have always viewed consumer confidence as somewhat of a catch-22. When the economy is sluggish, consumer confidence is low, but the only real way for the economy is for consumers to spend money.

My advice: If you have money, spend it. That is the American way after all. I'm not saying that you should go on a crazy shopping spree, but right now, you can find deals and if enough people increase their confidence in the market, even just a little, the market could be on its way to recovery.