Robert Genetski, a speaker at ERE’s conference next Spring in San Diego and whose financial forecasts have been spot on, says that if the U.S. government behaves itself, we could turn the corner by year’s end.
Genetski says the nation’s current economic problems are due to a number of factors, such as a “collapse in the housing market caused by overspeculation”; the Fed’s rock-bottom interest rates that made it so attractive for people to overspend on real estate; and “the government persuading banks to lend people money even though they couldn’t pay it (back), even though the homes weren’t necessarily located in the greatest areas.”
He says the “housing correction is not yet over” and could be somewhere around a year away, and declines could be somewhere around another 10%.
What’s really getting under Genetski’s skin is the government’s stimulus program (Dave Barry sums it up succinctly). “Once again our government came in and tried to help us,” Genetski says. “I think they made the situation worse.”
That’s because, Genetski says, the government had to borrow $170 billion to pay for the checks, and “there’s only so much credit out there, which made credit even tighter than it otherwise was … the checks were of course a one-time thing and the economy is weaker.”
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Now, Genetski says, “we don’t know what the government has up its sleeves for its next move. Another stimulus package will delay any recovery. As long as the government doesn’t do any further damage, we will see some relief by the end of the year.”
“I know the economy looks very weak at the moment,” he says. “(But) by the end of the year you will see signs it’s not as bad, people are starting to spend. Recruiters really want to be prepared for when that thing starts to turn around. Don’t look at the situation of the moment and say, ‘Let’s freeze everything.’ Those who do aren’t going get the workers with the skills that they want.”
Merrill Lynch, he predicts, will shed a lot of people as part of B of A. Whole departments will get slashed, and “some people who are very good and very talented will end up being available.”