Financial experts see recession ending this year......................

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Kaisdad's picture
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Financial experts see recession ending this year......................

Financial experts see recession ending this year

24-month downturn would be double average size since World War II

updated 5:12
p.m. PT
, Tues.,
March. 24, 2009

A group of financial wizards
looked into their crystal ball Tuesday and saw some good news.

The recession will ease by the
end of this year and companies will begin adding workers, signaling the end of
the worst economic downturn since the Great Depression.

It was the 64th day of the Obama
administration and Chicago-based Dow Jones Indexes assembled a group of
financial experts to assess the impact of government actions, whether they will
work to stem the recession and what opportunities that might present investors.

The recession has affected
every region of the country and nearly every sector of the economy, said Gus
Faucher, director of macroeconomics at Moody's, which conducts
independent research and provides economic forecasts.

"It's really unprecedented
in the U.S. to
have nearly the entire country in a recession simultaneously," he said.

The good news is there's an end
in sight.

The economy will pull out of the
recession at the end of this year, marking a duration of 24 months, about twice
as long as the average post-World War II recession, Faucher said.

The unemployment rate is expected
to peak at nearly 10 percent in the first half of 2010. Without the $787
billion government stimulus package, he estimated job losses would have
continued into the second half of the year and peaked at about 12 percent.

"That would take what is now
a severe recession and actually turn it into a deep depression," he said.
"We think the fiscal stimulus package is vital in turning around attitudes
toward the economy."

He said we are at or near a stock
market bottom and stock prices should soon stabilize.

That certainly wasn't the case so
far this week. The Dow Jones industrial average gained 498 points on Monday but
dropped 115 points, or 1.5 percent, on Tuesday.

Home sales will turn around by
midyear and home prices will begin recovering by the end of this year after
bottoming out at 35 percent of their value from peak to trough. Home prices
won't return to their values of a few years ago during the boom, but will
recover from current lows, he said.

Banks will likely begin seeing
improvement in capital as the government program to remove bad assets kicks in
and the Federal Reserve provides more economic support. Faucher predicted major
bank and financial services company failures will abate in the second half of
this year and credit will begin to move again.

Those improvements and additional
government spending will provide investors some opportunities in companies that
own bridges, toll roads and utilities. It also will drive growth in areas of
green energy production.

The stimulus package will spend
$50 billion on roads, bridges, utilities and other infrastructure, said Craig Noble,
portfolio manager, for Brookfield Redding LLC, a Chicago-based investment
manager of global real estate and infrastructure securities.

He sees a potential sweet spot
for investors in companies that own the assets that will benefit from the
needed spending. He said the stimulus package is only a small portion of
government spending on transportation and utilities. Congress must reauthorize
this year a multiyear transportation bill that provides hundreds of billions of
dollars in spending and sets priorities for the next five years or more.

"The infrastructure class
currently offers a unique and compelling investment case with trillions needed
to be spend across the globe in coming years," he said.

Stimulus packages rolled out in Canada,
Europe, Australia,
South America and China
show the global nature of the infrastructure asset class, he said.

Obama administration polices that
emphasize renewable energy such as wind power will also push billions of
dollars into building electricity-carrying power lines and the towers to hold
them. That construction is needed to carry wind power from expanding wind
turbine farms in the Midwest to population centers in
the Eastern United States.


It looks like we were all worried for nothing. the economy is going to better by the end of this year...?



Can you believe the crap the media is feeding the public....???


RSLCOUNSEL's picture
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Joined: Sep 26 2008
Posts: 41
Re: Financial experts see recession ending this ...

Another article published to the people that provides no basis for the rosy predictions.  Typical leading economic indicators have not turned upward.  Upbeat news is usually based on some change in the second derivative (ie: The rate of change in the rate of change) which doesn't mean things are getting better-  right now it often means that things are getting worse just that they are getting worse at a slower pace (I hope that makes sense).   The US Housing improvement has turned out to be hype: (1) Historically February is always better than January in the US and (2) Much of the increase in sales was for distressed properties (which may or may not be positive but it is certainly neutral at best).

Like Chris, I am optimist.  But unless the optimist is grounded in reality and dealing with facts, he is a fool at best.

If you are placing bets in the stock market, I suggest following the lead of China.  Their challenges are significant but at least they are able to focus on the problem without having to deal with the political distractions which dominate the US Government.



Ken C's picture
Ken C
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Joined: Feb 13 2009
Posts: 753
Re: Financial experts see recession ending this ...


Wasn't it the financial "WIZARDS" that got us into this mess?


It they had no idea this was coming what makes them think that they have any idea when (if) we will get out of it?



Dogs_In_A_Pile's picture
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Re: Financial experts see recession ending this ...

kenc -

They may end up being right - the recession ends as we slide into a full blown depression.

pleaseremoveme's picture
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Joined: Jan 24 2009
Posts: 115
Re: Financial experts see recession ending this ...


So called financial experts don't really know what they are talking about.

Kaisdad's picture
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Joined: Feb 17 2009
Posts: 16
Re: Financial experts see recession ending this ...
Dogs_In_A_Pile wrote:

kenc -

They may end up being right - the recession ends as we slide into a full blown depression.



 That thought crossed my mind to.....

bearing01's picture
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Joined: Sep 7 2008
Posts: 153
Re: Financial experts see recession ending this ...


The recession ends.

 The depression begins.

I will be calling it Hyper-Depression.

investorzzo's picture
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Posts: 1182
When Bernanke Says All Is Well, It’s Time to Duck and Cover

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