08 Feb 2008

Posted at 16:44h in The Friday Brief by
Last week we posed the question as to whether recession had already begun. Today 62 economists polled by Bloomberg News make it an even bet that job losses and housing contraction will stall the longest-ever expansion in consumer spending. They predict that the economy will grow at .5% in the first quarter implying the slowest growth since the 2001 recession. A growing number of economists, bankers, and brokers are saying that recession may already be upon us.

01 Feb 2008

Posted at 16:11h in The Friday Brief by
The title of last week’s Brief “It’s Not That Bad” rubbed a few of our readers the wrong way. It was insensitive at best to those in the real estate industry and I apologize.US mortgage foreclosures are set to top 1 million this year and home prices are falling at the fastest pace since the Great Depression. In the real estate industry it is that bad. While there is still mixed thought on whether it will drag the economy into recession, more industry leaders and economists are calling for dramatic government action. They say we need significant fiscal (tax cuts and relaxed mortgage rules) and monetary stimulation (further Fed rate reductions).

25 Jan 2008

Posted at 16:15h in The Friday Brief by
There comes a point in market downturns when investors throw in the towel and begin dumping stocks at any price, just to get out and end the pain. These events typically come after longer and deeper routs, but Tuesday’s rout felt a lot like capitulation. It had many of the characteristics of a turning point. One thing is certain in equity investing and that is nothing is certain. Historical studies of market corrections are helpful to understand their general framework, but there is no magical formula to trigger getting out or in.

11 Jan 2008

Posted at 16:18h in The Friday Brief by
The recession camp is growing as many large brokerage and bank economists toss their hats into the ring. Goldman Sacs yesterday joined Merrill Lynch and Morgan Stanley in projecting a possible recession in theUS. Goldman's economists predicted the economy will shrink 1% in the next six months and grow 0.8% for the year as the economy did in the last recession of 2001.