Thoughts from the 19th annual Economic Forecast Breakfast 12/02/08

Speaker: Dr. Albert Neimi, Jr.

Dean of the Edwin L. Cox School of Business

Southern Methodist University

As usual, the Economic Forecast Breakfast with Dr. Neimi was very interesting.

I have summarized the items that I felt were informative for 2009 and beyond.

1. We are in a recession as a nation. In Dr. Neimi's opinion it began in the 3rd quarter of 2008 and will probably last through 1st quarter of 2010
2. Unemployement in 2009 will be around 8.5% - 9% nation wide. (If the automakers do not receive a bailout the rate could get as high as 10% - 11%)
3. No one knows nor can predict the market, but Dr. Neimi's thoughts regarding investments are to leave in what you have invested, but hold off on new investments until Spring of 2009. (Over the last 25 years, the market has achieved most of its returns in just 40 days. If you are out of the market on one of those days its trouble.)
4. The recovery will be slower that in previous recessions. Growth prediction for the five years 2010 through 2014 will be less that 3% per year.
5. Keys to recovery will be consumer spending returning. Given the housing, auto and retail sales dependence on free credit, spending will be slow to return.
6. We will not be the next Japan or Europe because of our population growth. Growth in the next 20 years will be approximately 55 million people. One interesting fact on the population growth is that 60% of it will occur in 5 states; Texas, Florida, Georgia, North Carolina and California.

1. The erosion of the middle class -  Median income in the U.S has declined for the past nine years
2. Minority Education - In 30 years 55% of high school graduates will be people of color. We must increase the number of those graduates that go on to attend college
   
3. Taxes - The high tax burden of individuals and corporations challenge our ability to compete internationally
4. Government is Broken - The only solution is Term Limits which are unlikely to happen