Magazine article Real Estate Issues

Editor's Statement

Magazine article Real Estate Issues

Editor's Statement

Article excerpt

At this writing, it is mid-January. We have a new President; corporate earnings reports continue to disappoint; the Fed has reversed itself on rates; economists are beginning to speak in terms of a "landing"; Bradlees, Montgomery Ward, and a growing number of other companies are in bankruptcy; and vulture funds are circling Xerox, Chiquita, Fruit of the Loom, and Friendly's Ice Cream. Forecasts of continued economic expansion are being replaced increasingly by predictions of a slowdown. More ominously, "recession" has crept back into the vocabulary of some pundits.

One wonders if current conditions were not signaled by the inversion of the yield curve in the middle of last year. Indeed, every downturn of the last century was preceded by such an inversion. Why should it be different this time? At the same time, Greenspan & Company has achieved its stated objective of keeping inflation in check. As Hugh Kelly, CRE, has often speculated in this publication, the Fed has also achieved its unstated objective of relieving pressure from the speculative bubble of an overpriced stock market. Additionally, the recent Inauguration ensures that the advisability of tax cuts over deficit reduction will be a dominant national debate in 2001. …

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