Two Economic Certainties

Either the economy will get better over time or it will get worse…
Either is better than stagnation.

During the summer of 2005 the Bay Area housing market entered a downturn. By October the ratio between the number of homes on the market and the number being sold began to grow. Since that time, home inventory levels in central Contra Costa county have moved from a “seller’s market” (three or less months of inventory) to a “buyer’s market” (seven or more months of inventory).

So what is the outlook? Janet Yellen is the head of the San Francisco Federal Reserve for our region. She feels that the U.S. economy will experience slow growth in the coming quarters.

Her negative concerns are: (1) consumer spending will continue to fall (2) home prices will decline further (3) loan delinquency will grow (4) volatile markets will dampen consumer spending.

There are four counters to the negative concerns: (1) the “Economic Stimulus Bill” signed February 11 will boost the US economy (2) relatively low inflation will be a boost (3) appropriate monetary policy will help (4) rising consumer confidence would help

Place your bets.
Your comments are welcome!
I’ll be listening...