Are we Going Back to The Basics?

Posted: July 6, 2010 in Real Life, Your Lifestyle

Good Morning Readers,
This is Marc Turner and I wanted to share this Story with you to Let you know that we are Truly Blind to the Fact that we Need a Plan “B”. Most of the Readers that see this will not Agree.
I gladly say that is ok and if you are Just Ok, make sure that you are ready for the Future.
Ben Baden and Rob Silverblatt, On Thursday July 1, 2010, 3:21 pm EDT

With stock prices spiraling downward and treasury yields tanking, the market has been sending a clear message this week: The fragile economic recovery is in trouble. But just how bad is the outlook? In the aftermath of a bleak second quarter, experts are still divided about the likelihood of a double-dip recession. What’s becoming clearer with each new report, though, is that the economy–even if it doesn’t double dip–is steadily losing ground.

The economic souring is, of course, being spearheaded by a familiar cast of characters: An anemic labor market, a skeptical consumer base, a weak housing market, and a global debt crisis that threatens to overwhelm national governments, just to name a few. Further deterioration in even one of these arenas could be enough to trigger a double-dip, which is loosely defined as a period during which a recovery is interrupted by economic contraction, usually in the form of negative GDP growth.

[See Is Your Portfolio Ready for a Double-Dip Recession]

For some experts, the prospect of a double-dip still seems distant. “I still think it’s very unlikely that the economy will fall into a double-dip,” says John Ryding, a cofounder of RDQ Economics. “Double-dip fears are quite prevalent right now and have been … but I find the situation very similar to the last two so-called jobless recoveries where feelings of double-dip constantly bubbled up to the surface but never materialized.”

Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business, is less optimistic. Morici says the likelihood of a double-dip is at least 50 percent. “What’s going to happen here is either the economy is not going to collapse, or it’s going to avalanche. Because once you start cycling down, then it develops a momentum of itself. And if it goes down a second time, then it becomes very difficult to resuscitate [it],” he says.

For investors, a double-dip, if it materializes, would be a throwback to 2008, with a floundering economy punishing stock returns. Jeff Tjornehoj, Lipper’s research manager for the United States and Canada, says the Dow Jones industrial average could touch 9,000 by the close of 2010. “Is it reasonable to expect it? I think it’s reasonable to put some odds on it,” he says.

With that in mind, U.S. News has examined eight phenomena which, given the right conditions, could send the economy–and the financial markets–reeling.


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