by Courtney Carlovsky (Nicholas 2010)
My fellow Nicholas Center first-years and I attended the Economic Outlook
Conference on September 12th. The four speakers presenting their thoughts
on the economy were: Charles Payne, Principal Analyst and CEO Wall Street
Strategies; Anirvan Banerji, Director of Research Economic Research Institute
(ECRI); Doug Ramsey, CFA Leuthold Weeden Capital Management; and Clare
Zempel, Principal Zempel Strategic. Each had his own view on what is going
on currently in the economy, how we got there, and where it is likely headed
over the next year. Some were messages of optimism while others were a bit more pessimistic. Overall, each agreed that we are in a recession; though, there
were some varying thoughts regarding how much longer the recession would last.
The signs of this recession were there early but its arrival was delayed due
to a lack of volatility in the system. The majority of the speakers provided historical indicators of all recessions, including this one. The indicators followed the same
pattern for this recession as those in the past. When times get tough, people often ask, "What is the government going to do to help us out"? However, there is only so much the government can do for the economy while we ride out a recession.
The government has already provided a stiumulus package that, in Anivarn Banerji's
opinion, came too late to head off the recession. Currently, the government is trying
to avoid any knee-jerk reactions to the marketplace that might provide relief in the
short-term but causes more harm in the future.
The key takeaways from each speaker:
Charles Payne - America has to get back to embracing competition
and intelligence because the days of non-competition are over. America will
continue to fall further behind in the world economy if we continue to embrace
the status quo.
Anrivan Banerji - Pessimistic views about the recession present an
opportunity for businesses in the United States. He emphasized that timing is
everything.
Doug Ramsey - The yield curve predicted the last three recessions.
The stock market leads the economy by 6-9 months and as the stock market
improves the economy will follow within the next year.
Clare Zempel - Housing has had a downward drag on the economy.
The leading indicators, such as Real GDP, will improve as the housing market improves. While the housing climate has been bad, its affect on indicators could be worse.
It was interesting to hear the different views about the economy and how a recession
is measured through the eyes of different industry leaders. Only time will tell how all
of this will play out.