Monday, December 01, 2008
More than a few prognostications have ultimately proved to be wide of the mark around here over the last year, but it looks as though this almost two-year old prediction of the start of the current recession was spot-on.
Recall these words from January 1st 2007:
7. Economic Growth will Slow, Consumption will ContinueMarketWatch reports that the NBER (National Bureau of Economic Analysis) has now made the official determination that the recession started in December of 2007.
There are still trillions of dollars of home equity that haven't been spent yet and much of it will be spent in 2007. Unfortunately, much of this will be in the form of reverse mortgages for senior citizens, in order to make ends meet.
As for the younger crowd and their home equity, eventually it will be like millions of alcoholics at closing time, "Sir, the bar is closed. We can not serve you any more drinks. Please go home." Homeowners will spend their home equity until they can't anymore, which won't happen in 2007.
Economic growth will continue to slow, coming in just below 2 percent for the year with a recession starting in the fourth quarter.