I was fortunate to attend a presentation by Christopher Probyn of SSGA
“The Financial Crisis: Causes, Consequences and the Prospects for Recovery.”
I spent more time listening than writing things down so pardon me for just providing an outline of what he mentioned that interested me.
- Headwinds to the economy: Weakness Abroad, Deteriorating Commercial Real Estate Markets.
- V Shaped recoveries usually follow deep recessions, Mr. Probyn is looking for a U shaped recovery to play out.
- Unemployment will reach at least 10% (It’s close enough now and we shall see Friday if it happens already)
- Inflation will come way down from the current 1.5% due to the higher unemployment rate.
- There is a good chance CPI will break below 0% (It already has in Japan and Europe) Deflation Alert!
- Do need to worry about inflation until capacity utilization rate goes to at least 80% (Currently in the 60’s)
That’s all Folks. I hope you found it interesting to say the least.