Whether the economy II

The powerful economic cross currents continue.

The dollar plunges against the Euro (take that deficit doesn't matter crowd). Median house prices decline for the third consecutive month; an exceptionally rare occurence. Auto sales too decline. Twenty years ago, if housing and autos were both down, a recession was virtually guaranteed. Today, with technology and services far bigger economic components, it isn't a fait accompli. Interest rates continue very reasonable, with a decent chance that the Fed's next move is down, not up.

Liz Ann Sonders, a heavy hitter investor, sees the housing decline as a very bad omen, almost always followed by a recession as construction workers lose their jobs, banks deal with defaulted mortgages, building materials manufacturers lay off workers and so on.

I'm not that negative yet, but I'm looking at placing some stop loss orders just in case...

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Book Review: What Matters Now by Gary Hamel

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