Mar 12, 2007

Greenspan May Have Had It Right

Two weeks ago, just prior to the coaster ride the market took, Greenspan addressed a business conference, via satellite, of Hong Kong businessman. Part of that speech from a Martin Crutsinger article on the AP:

"When you get this far away from a recession invariably forces build up for the next recession, and indeed we are beginning to see that sign,… While, yes, it is possible we can get a recession in the latter months of 2007, most forecasters are not making that judgment and indeed are projecting forward into 2008 ... with some slowdown,"

The average Jason or Jennifer judge the economy from their own direct environmental input, their personal situation and that of those around them. As in everything American there is a rift growing between economists, on one side is the doom seers and the other are the “contemporary” wisdom crowd. The pessimistic group look at the cancers of our economy, the trade deficit, the breakdown of the housing market, the extraordinarily high levels of credit by consumers and government, the outpouring of American manufacturing jobs, health care costs rising at three times inflation the upcoming Social Security dilemma and governments inability to effectively react to these risks. On the other side are a group of highly educated economists and leading financial engineers, some of which are responsible for hundreds of billions of dollars in our retirement accounts, and they claim that since everything looks healthy (our economy), then the patient must be healthy.

Each of the potential detriments are a study in themselves, and some of the contemporary arguments are convincing, but we urge all to take a conservative approach in making any decision that might be affected by a recession in the next 24 months.