A Voice of Calm and Reason Among the Panicked Pundits
Once in a while, in the midst of panic and confusion, a calm voice can be heard - if you listen carefully.
Nearly all the content on this blog is original, but sometimes I run across great articles from other sites that I believe provide valuable to my clients and readers.
Nearly everyone is concerned about the economic recession, how it will affect us personally, and how long it will last. Of course, the Daytona Beach homes market has been in recession for a few years and me and my readers are sure interested in answers to our questions.
Anthony Karydakis, a professor at NYU’s Stern School of Business, published an article on Fortune’s web site titled, How long will the recession last? If you like shouting, pessimism, and unsubstantiated opinion, click away right now, BUT, if you are interested in reading an articulate, sensible, evidence-based analysis, read Professor Karydakis’ article.
I came away from the article with a changed perspective. I was reminded that we experience periodic recessions and that they generally don’t last that long (about 10.4 months since WWII according to the article). I was also reminded that there are cycles to every aspect of our economic lives. Yes, the Daytona Beach real estate market will recover and begin growing - eventually.
Professor Karydakis doesn’t gloss over the severity of the recession we are in right now, but he adds sensible points like when he talks about the “deepest recession in decades”:
“The most intuitive, and legitimate, reference is the 1981-82 recession, which lasted a longer-than-average 16 months and led to a peak of 10.8% in the unemployment rate - by all standards, a pretty serious affair. Still, it would take an extraordinary amount of additional severe damage to today’s economy over a fairly long period to drive the unemployment rate from its current 6.5% to double-digit territory.”
So, what’s his prediction?
“How long will this one last? The prevailing view: probably through the middle of 2009.”
There you have it, but I encourage you to read the article. It’s a short read, but very informative.
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