Grab some popcorn and settle in for the slowdown

I’d like to start with a less than encouraging quote from Fed chairman Bernanke: “Overall, the Committee expected that the growth of economic activity would slow noticeably in the fourth quarter from its third-quarter rate. Growth was seen as remaining sluggish during the first part of next year, then strengthening as the effects of tighter credit and the housing correction began to wane.”

Unless the housing correction DOESN’T wane. A frightening thought, but one that must be entertained nonetheless. This will lean our country’s financial decision makers decisively towards a more facilitative policy.

Inflation is on the horizon, and there’s really no way to stop it. High oil prices will percolate into all markets and drive prices upwards. The good news is that it doesn’t seem to bother the Federal Reserve one bit. Write-downs continue to plague the financial sector of the stock market, as re-valuations of collateralized debt obligations (which are chock-full of subprime mortgages) reduce overall portfolio values. Bad news for investors. Stock market continues to yo-yo on an almost daily basis, bouncing from gain to loss to gain again. Not necessarily bad news, but it will make the financial bulls a little more gun-shy.

BernakeAll of this shifts the powers that be yet again from the ‘absolutely no chance of a rate cut at the next meeting whatsoever’ stance to the ‘we’ll keep our eyes on the numbers and act as necessary’ stance. That’s pretty close to where we were 1½ months ago and we ended up with a cut. Go figure.

The weak dollar seems to be driving a lot of movement behind the scenes. For example, foreigners are vacationing here for cheaper, so Disney is rocking and rolling. A good thing for our local economy.

My opinion on the future: Recession? Not likely. Anemic growth for a while? You betcha. Real interest rates, as measured by the Federal Funds Rate (4.5%) minus core inflation (1.8%) are still notably higher than the average “Goldilocks” level (not too hot, not too cold) of 1.5%. Additionally, a recent strong read on productivity will help stave off core inflation even longer. That would imply that the question is not if the Fed will cut rates again, but when.

1 Comment

  1. What The National Association Of Realtors Don’t Want you to Know

    The truth about board of Realtors® owned MLS throughout the country


    United States of America (Press Release) December 6, 2007 — Antitrust complaint unfair trade practices update to previous complaints.

    Shutting off service to your MLS as stated in the letter below and shutting out to prevent non Realtors ( real estate agents) on Realtor owned MLS boards in my opinion is unfair trade practices on a large scale.

    When a Realtor list a home is it disclosed to homeowners at the time of listing that all Non Realtors (real estate agents) will not be able to sell or show any homeowners listings unless they join the local board? Of course not, therefore limiting competition in the marketplace by the thousands of potential home sales from real estate agents nationwide with Realtor own MLS boards… I do believe that there are around 1.7 million real estate agents VS 1.3 million Realtors that leaves a Hugh gap for home buyers and home sellers if this information is not disclosed up front.

    Now that shutting down Supra display keys attached to Realtor owned MLS boards because of unpaid Realtor Board dues, Not unpaid MLS dues only compounds this problem even further for the consumers who have active listings on the Realtor own MLS boards with the agents that are now shut out from a service that is provided by GE/Supra and in which the dues are not not in default..

    Lets look at what I call the poster child state, Georgia

    Georgia has two major Non MLS Realtor Boards GMLS and FMLS that do not discriminate between Realtor or Real Estate Agents therefore providing 100% competition for the consumers and has created a fair marketplace with a level playing field for all to enjoy.

    Why have I choose not to renew my Realtor dues is a very simple explanation for me, I am shammed to be associated with NAR and to be dragged into the DOJ lawsuits against NAR for all the public to see and judge me as a not trustful Realtor (Anti trust) guilty by association, and to further damage the already scarred reputation of being a Realtor.

    Were is NAR ethics here ?

    So with an estimated Realtor loss of 10% at the Orlando Regional Board of Realtors not renewing next years dues and are paid up MLS dues have had there Supra keys shut off also, what do they tell there listing homeowners clients and Home buyers? When they can not gain access to there listing, or show potential home buyers homes..

    This is fair practice!! Sorry I call it unfair trade practices on a large scale and I support The Department Of Justice actions 100% to protect the general public from this unfair trade practice.

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