Comfort Zone Investing: It's not all bad ...

But there are slivers of good news in the economy, if you look for them. One is that the credit markets are starting to function, at least for large companies with good credit. Cisco Systems (NASDAQ: CSCO) was able to borrow $4 billion, part for 10 years and part for 30 years at reasonable rates (2 percentage points over the Treasurys' 10 year rate for a yield of 4.979% and the 30 year portion sold for a yield of 5.916%). There were bids for $10 billion worth of the bonds. Just two months ago Hewlett-Packard (NYSE: HPQ) paid about 4.6 percentage points above the Treasury rate to borrow $2 billion for five years, more than twice the spread Cisco paid. So there are lenders looking for good borrowers and at rates that aren't exorbitant.

Another positive indicator: Intel is willing to bet on the future, putting $7 billion into expanding plants and hiring more people. The investment will be in U.S. factories over the next two years, with the need for 7,000 new employees in three states (Oregon, Arizona, and New Mexico). The company has $12 billion in cash. It has no need to borrow to fund the expansion.

More good news: Companies are adjusting quickly to a new reality, cutting costs and prices. While there's nothing good about losing jobs, the fact that management in many stressed industries (autos come quickly to mind) are dealing with the problems, making their companies more efficient and delivering products that consumers want (hybrid cars, for one). As companies downsize and cut costs, their need to borrow more or layoff more employees diminishes. Their ability to survive is greatly improved. And when the economy turns, their profitability will be remarkable as their costs will rise more slowly than their revenues.

The stimulus plan is coming! The stimulus plan is coming! Whether you agree with it or not, the fact that the Senate and House have passed a bill authorizing almost a trillion dollars in expenditures (with some investment as well) says that money will be flowing into the economy. If, as the president stated, the new funds will create up to four million jobs that accomplish goals such as computerization of medical records, retrofitting government buildings and homes for better energy efficiency, and rebuild much needed infrastructures such as road and bridges, then there will definitely be a better economy as that money flows through to create more demand for goods and services, and more jobs.

Of course, there aren't enough specifics yet to know exactly how everything will be accomplished. Plus if the new money is simply saved, not spent, it won't have the effect the president wants. Furthermore, the inflation that it will create will be a considerable challenge. But the good news is that something is being done. Of course, mistakes will be made, but times are uniquely difficult. Problems are so large that only the federal government can address some of them. Now that there is a bill from both houses, the negotiations can begin to resolve differences and create one bill. Then it has to be quickly implemented which seems to be what the intention is, at least from the president.

Another item: Some consumers are getting more spending power through refinancing of existing mortgages. One of the comments from Bank Of America (NYSE: BAC) CEO Ken Lewis last week stated that the Countrywide division was seeing record refinancings. That's good on two levels. First, it means the bank is making money on the fees from the new loans. Second, it means consumers are paying lower interest payments, freeing up money to pay for other items. For example, if a borrower has a $100,000 loan and is currently paying 7% on it, then refinances it for 5%, there's an extra $2,000 a year that can be used for other purposes, whether spent or saved.

One more: Gas prices are down. While oil has gone from $143 a barrel to about $40 as of this writing, the price at the pump has gone from $4.50 to about $2. If a driver fills up once a week with 20 gallons, that's a savings of $50 a week. Again, spend it or save it, there's more money for other uses. Not a big deal, perhaps, but psychologically it all helps.

Is all this enough good news to make investors jump back in the stock market? Hardly. They're simply a reminder that not everything is bad. That the evolutionary process is at work. That while the headlines are negative, especially with the massive layoffs, there are other forces at work that will make the American economy stronger and better. Eventually, it will be back on track, there will be more jobs, and the economy will grow again. Just remember to look for some of the good news when all the bad dominates. There is some, just not enough yet to get investors back in the market.

Ted Allrich is the founder of Allrich Investment Management LLC.