The Predictable Slowdown

Late last year, I indicated our concern over the artificial hype leading into 2010, especially in the housing market and with infrastructure spending. Now the slowdown has begun and most FI's, if not all, will have weaker performances to end fiscal 2010 and start 2011.
Clearly housing sales have come to an abrupt stop in many locations in this country and others. The USA still has a significant inventory of unsold houses and foreclosures continue as we speculated late 2009.
But, there is business to be done through innovative value propositions and utilizing the still low 5 year fixed term mortgages at around 4%. This is a time to promote your home renovation/refinancing propositions. Perhaps, a new roof, driveway, garage, or re-modeled rooms to improve people's surroundings and help them build equity and salability for the future should be on the top of your agenda. It is unlikely that vacation homes will be forging ahead until perhaps the spring of next year.
The second economic issue is the infrastructure spending blitz put on by most countries as stimuli to come out of the recession. In fact the spending continues in some quarters and some politicians are encouraging more to fight the current slowdown. Let's give their heads a shake! In Canada, the federal government poured millions in to capital projects which was matched by the provincial and municipal governments. Actually most of us believe that we only have two seasons now- construction and winter; and the latter maybe doomed. There is only one tax payer! Politicians should start to realize that, and understand that more and more are on fixed retirement incomes. The tax increases need to fund all this excessive spending will lead to taxpayer damages including home losses by many seniors. More spending is not going to save the economic projections. It will create more debt and deficits on top of the largest ones in our lifetime. More political spending will drag on the recovery longer and place a heavier tax burden on every citizen. A treadmill to disaster!

Pat Palmer | Saturday, August 21, 2010 | Comments (0) | Trackbacks (0) | Permalink