(FORTUNE Magazine) – After reading all the dire economic news out there, you might be tempted to give up and hibernate for the winter. The signs point to an icy season. Employment numbers aren't pretty, tech stocks--while up notably from their September troughs--remain dicey, and consumer confidence is schizophrenic at best. Oh, right. There's also that war-on-terrorism thing. So what we're about to say might come as a shock: There are mighty powerful reasons to feel optimistic right now. We spoke with scores of economists and market gurus, dug through historical data, and analyzed reports to cull the best feel-good facts we could find. Over the next several pages, you'll find our top ten, ranging from world trade to the Washington Wizards. And for some added perspective, we show how this recession stacks up against the last century's four major contractions. (The findings may surprise you.)

Coming up with so many reasons to smile may seem a difficult task, but in fact our greatest challenge was narrowing the field to ten. We just found too much good news. For instance, the University of Chicago's Arnold Zellner tells us that, statistically, long expansions tend to be followed by short contractions. Salomon Smith Barney's Tobias Levkovich points out that contrary to popular belief, rising corporate debt levels aren't the threat that they were before the 1990 recession, thanks to the lower ratio of interest expense to corporate cash flow. (Got that?) And we haven't touched on retail sales, the market's vigor, or the forthcoming stimulus package.

Don't get us wrong; we're not saying that our troubles will miraculously end anytime soon. As the rest of our investment package shows, there is plenty of grim news out there. But for the next few pages at least, we've given you space to exhale and relax. So before you throw on your thermal pajamas and hide away for the season, check out our quiet case for optimism. The economic climate might not be as chilly as you think.

10 BIG REASONS TO SMILE

1 Autos

Zero-percent financing may be on a collision course with the Big Three's bottom line, but it's acting as an airbag for the rest of the country. According to Comerica Bank's David Littmann, each dollar spent on a car gets recycled through the economy three times within the year. Hit the road Total U.S. sales of light vehicles, in units, for GM, DaimlerChrysler, and Ford

Oct. 2000 892,474 Oct. 2001 1,172,971

2 Inventories

After bulking up their warehouses during the boom, corporations prescribed a starvation diet over the past year. The remedy is working, says Morgan Stanley's Richard Berner: The glut should be over in several months, not years.

3 Wind chill

Baby, it's not that cold outside. This year even winter is getting less frosty. The National Weather Service has changed the way it calculates wind chill, making some of the new readings a bit warmer. Here's to a toastier 2002!

4 China

By 2004, China's membership in the World Trade Organization should increase U.S. exports to the region by $5.4 billion annually.

5 Energy

Every time the price of a gallon of gasoline drops a penny, the economy gains $1 billion, according to Salomon Smith Barney's Tobias Levkovich. Since mid-September, gas prices have dropped an average of 34 cents. (You do the math.)

6 Michael Jordan

Welcome back, Your Airness. During the last Jordan era, FORTUNE found that M.J. pumped $10 billion into the economy. Now he's returned--again--and both the Wizards and the country could use the assist.

7 Semiconductors

The industry that helped bring us out of our most recent recession crashed last year, but the chips won't be down for long. The Philadelphia semiconductor index is already up 46% since Oct. 1. Gartner Dataquest now predicts that the sector will grow at a 30% annual rate in 2003.

8 Housing

With interest rates on 30-year mortgages near a 30-year low, a record number of households are choosing to refinance. Half of them are taking out cash too--an average of $18,000, according to Economy.com's Mark Zandi--and injecting it back into the economy.

9 Value Line

Value Line--whose top-level picks beat the S&P 500 by 1,100% from 1965 to June 2001--is recommending its most bullish asset-allocation model in more than 30 years. It is now telling investors to keep up to 90% of their portfolio in stocks and predicts a 32% increase in the S&P 500 over the next six months.

10 Power of Ten

Good things come in tens--just ask Moses. This year Greenspan cut the Fed fund rate ten times to its lowest level in 40 years. Which leads us to a commandment of our own: Thou shalt not panic.

SOURCES: (1) WARD'S AUTOINFOBANK; (2) ECONOMY.COM; (4) INSTITUTE FOR INTERNATIONAL ECONOMICS; (8) MORTGAGE BANKERS ASSOCIATION OF AMERICA

REPORTER ASSOCIATE Doris Burke