How does a recession come? Is there any warning? Should we all watch CNBC for a hint?
Well, it didn't take long for this recession to hit. And there wasn't too much banter about it. This recession didn't come with a whimper...it came with a bang! It came swiftly after subtle hints and fears and dialogue on CNBC. It came because Mr. Bernanke is an inflation hawk and ignored signs that we all saw in September and October of 2007.
Well the past several weeks have brought a series of indications that the economy has entered a period of retraction. Wal-mart Stores and other retailers are showing a drastic downturn in demand. Cisco Systems CEO said his company saw a 'rapid slowdown' between December and January for orders. The Institute for Supply Management's index of service-sector activity plunged in January. Nonfarm payroll growth fell in January for the first month since 2003.
So, we can all guess about whether the economy will experience 2 consecutive quarters of negative growth. We are probably just as good as economists at calling the pace of the economy. But Mr. Bernanke is trimming all the forward projections as we watch a slowing economy turn in to an outright decline. It's no wonder to me that he is receiving the poorest ratings of any Fed Chairman.
Thank you for making me Your Orange County Real Estate Connection.
Best regards, Michael Caruso
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