Its not over but the end is beginning.

So, I said to my mate Charlie “What’s going to happen with this economy?”

We all get forecasts but we don’t all have my good friend Charlie Nelson.

Why should I be telling you this?

Well, in early 2007 I knew we would have a downturn in the next 18 months. I didn’t pick a full blown global financial crisis but I knew something had to happen. We had been riding high too long in too many ways.

So we set up our life and our business up to weather a storm.

And, the storm came.

In November last year we forecast that the $10 billion financial stimulus would see 80% going into savings and only 20 % being spent. And so it happened. And again we made the correct call.

Charlie has been helping me pick trends for more than ten years and I haven’t seen him get it wrong yet. So when he told me on Monday this week that there is the beginning of a strong recovery I started to feel better about life.

I have been through four downturns in my 40 plus years in business and I have learned two things. One, they start and two, they finish. That’s the easy bit. The hard thing is to pick the dates. We have a world full of experts telling us what will happen. The IMF is now forecasting a long downturn. Well, the IMF didn’t see this downturn coming, so I don’t know what would make us believe they know where it’s going.

The latest book about Warren Buffett was a big seller all around the world as people looked to the wisdom of the world’s richest investor. The question we all wanted to know was how did he do it? So I read the book like everybody else. And it seems that what he does is simple. He buys shares and keeps them for fifty years. But who can wait that long for recovery?

I have always thought that spending in advertising industry is a good way of reading the tea leaves of the economy. So when Stuart Mitchell, the CEO of our company, told me that the February just past was a shocker but on the improve, I knew that we had bottomed out and that we were on the way up.

When I sat down with my mate Charlie this week, he said that there has been a strong recovery of willingness to spend which suggests that a pick up in consumer spending growth is on the way. I have no doubt that we are starting to see our way out of this downturn.

This $42 billion Government package is a large figure and this time at least 30% of it will be spent. Putting aside falling petrol prices just look at the interest payment bill that was running at 15.2% of household spending in the June quarter last year. By this June will be 10.7%. That’s an extra $35 billion available in family budgets.

So whilst we have had booms and busts since 1788 and while we think they will never end when we are in the middle of them, our forecast is simple. The worst of the fall is over and we are on the way up again. And for every household that’s very good news.

Of course there will be bumps along the way out of this and like every downturn there are still plenty of bruises that have to work there way out of the system. Its not over but the end is beginning.

I’m betting that my man Charlie has picked another winner!