The Long Term Investor

CLARITY and REALITY....just got more obvious.

Atlanta Fed GDP tracker shows the U.S. economy is likely in a recession

https://www.cnbc.com/2022/07/01/atl...-the-us-economy-is-likely-in-a-recession.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• The Atlanta Fed’s GDPNow gauge sees the second-quarter running at negative 2.1%.
• Coupled with the first-quarter’s decline of 1.6%, that would fit the technical definition of recession.

A Federal Reserve tracker of economic growth is pointing to an increased chance that the U.S. economy has entered a recession.

Most Wall Street economists have been pointing to an increased chance of negative growth ahead, but figure it won’t come until at least 2023.

However, the Atlanta Fed’s GDPNow measure, which tracks economic data in real time and adjusts continuously, sees second-quarter output contracting by 2.1%. Coupled with the first-quarter’s decline of 1.6%, that would fit the technical definition of recession.

“GDPNow has a strong track record, and the closer we get to July 28th’s release [of the initial Q2 GDP estimate] the more accurate it becomes,” wrote Nicholas Colas, co-founder of DataTrek Research.

The tracker took a fairly precipitous fall from its last estimate of 0.3% growth on June 27. Data this week showing further weakness in consumer spending and inflation-adjusted domestic investment prompted the cut that put the April-through-June period into negative territory.

One big change in the quarter has been rising interest rates. In an effort to curb surging inflation, the Fed has jacked up its benchmark borrowing rate by 1.5 percentage points since March, with more increases likely to come through the remainder of the year and perhaps into 2023.

Fed officials have expressed optimism that they’ll be able to tame inflation without sending the economy into recession. However, Chair Jerome Powell earlier this week said getting inflation down is the paramount job now.

We’re not going to have a severe recession, says Wharton Professor Jeremy Siegel

At a panel discussion earlier this week presented by the European Union, Powell was asked what he would tell the American people about how long it will take for monetary policy to tackle the surging cost of living.

He said he would tell the public, “We fully understand and appreciate the pain people are going through dealing with higher inflation, that we have the tools to address that and the resolve to use them, and that we are committed to and will succeed in getting inflation down to 2%. The process is highly likely to involve some pain, but the worse pain would be from failing to address this high inflation and allowing it to become persistent.”

Whether that turns into recession is unknown. The National Bureau of Economic Research, the official arbiter of recessions and expansions, notes that two consecutive quarters of negative growth isn’t necessary for a recession to be declared. However, since World War II there never has been an instance where the U.S. contracted in consecutive quarters and was not in recession.

To be sure, this tracker can be volatile and swing with every data release. However, Colas noted that the GDPNow model gets more accurate as the quarter progresses.

“The model’s long-run track record is excellent,” he said. “Since the Atlanta Fed first started running the model in 2011, its average error has been just -0.3 points. From 2011 to 2019 (excluding the economic volatility around the pandemic), its tracking error averaged zero.”

He further noted that U.S. Treasury yields have taken note of the slower growth prospects, falling significantly over the past two weeks.

“Stocks have taken no comfort from the recent decline in yields because they see the same issue portrayed in the GDPNow data: a US economy that is rapidly cooling,” Colas added."

MY COMMENT

It is not like it is going to matter if we find out we have been in a recession for the past 6 months. this is a severely lagging indicator. AND....stocks have already suffered the impact and have been telling us that we are in a recession for a long time now.

The IMPACT of the recession will mostly be psychological. AND....actually I see it as a good thing......the economy is slowing, jobs will ultimately suffer, and all the excesses that are impacting the economy will gradually disappear. The media will have a field day with the DOOM & GLOOM and FEAR MONGERING.

PLUS.....as we go forward we will find out if the REAL ISSUE is......inflation or deflation.

 

Nice to end the week with a green day. I think....if my memory is right that I had TWO green days this week. I had seven of ten stocks up today....but Nvidia hurt my gain. I got beat by the SP500 by 0.34%.

BUT....what do I care....all I care about is being green today to end the week on a positive note and make some money. At this point my year to date is (-26.6%). I live to fight another week.

 

Here are the current results.

DOW year to date (-14.42%)
DOW for the week (-1.28%)

SP500 year to date (-19.74%)
SP500 for the week (-2.21%)

NASDAQ 100 year to date (-29.01%)
NASDAQ 100 for the week (-4.30%)

NASDAQ year to date (-28.87%)
NASDAQ for the week (-4.13%)

RUSSELL year to date (-23.05%)
RUSSELL for the week (-2.15%)

TGIF......as usual. We now get three days off to lick our wounds.......buck up.....and come back to fight next week.

 

Well said Smokie:

"Happy 4th of July all...lets celebrate and appreciate our many FREEDOMS we can sometimes take for granted."

Could not agree more......we all tend to lose track of all of our blessings in the day to day business of life. HAPPY FORTH OF JULY TO EVERYONE.

 

SO.....here is the BIG NEWS. We are now 100% GREEN for the second half of the year. Every single day is gains. The first half ended yesterday. We have now moved on to totally POSITIVE markets for the second half.

PLUS....we can enjoy this POSITIVE second half for another three days after today.

BUT like a movie SEQUEL......next Tuesday is......DAY TWO, THE RECKONING.

 

Well.....It is the 4th of July tomorrow......and.....we get to avoid having to see or think about the markets since they are closed. YEA.

Here is a preview of Tuesday and the rest of the week.

Jobs, JOLTS, and the Fed: What to know this week

https://finance.yahoo.com/news/july-5-week-ahead-markets-preview-153549016.html

(BOLD is my opinion OR what I consider important content)

"In a holiday-shortened trading week, data from the labor market and a readout from the Fed's latest policy meeting will be highlights.

June’s all-important jobs report will be released at 8:30 a.m. ET Friday morning, forecasts suggesting another 275,000 jobs were created last month, according to data from Bloomberg.

On Wednesday afternoon, investors will also turn their attention to the minutes from the Federal Reserve's June 14-15 meeting, after which the central bank elected to raise interest rates by 0.75%, the most since 1994.

U.S. markets will be closed on Monday for the July 4th holiday.

Equity markets kicked off July and the new quarter in positive territory, but marginal gains on Friday offered little reprieve for stocks after all three major indexes logged their worst start to the year in decades.

On Thursday, the benchmark S&P 500 capped the first six months of 2022 down 20.6%, marking its largest first half drop decline since 1970. The tech-heavy Nasdaq fell 29.5% its widest January-to-June percentage drop on record, and the Dow was off 15.3% through the final session of June, the Blue Chip index's worst first six months of the year since 1962.

Wall Street strategists have sounded the alarm on more declines ahead for equities, with some suggesting the S&P 500 may plunge another 15%.

Matt Maley, equity strategist at Miller Tabak, told Yahoo Finance Live that 3,200 on the S&P was “very attainable.” The benchmark index rounded Friday’s session out at 3,825.33.

"The thing is, people keep saying that the recession is getting priced into the stock market,” Maley said. “I think it’s just barely beginning to be priced in."

More recession talk is expected next week when the Federal Reserve unveils the minutes from the institution's historic June 14-15 meeting, which resulted in an interest rate hike of 75 basis points — the steepest hike since 1994.

The release is expected to offer additional insight on the central bank's decision last month and what may lay ahead during its next policy meeting at the end of July. Officials have only recently started to acknowledge a longstanding concern on Wall Street — that a further ramp in interest rates to tame inflation may push the economy into recession.

Fed Chairman Jerome Powell said on Wednesday at a European Central Bank panel that there is “no guarantee” the Fed can avoid a hard landing, introducing the possibility policymakers may walk back on plans to raise rates to 3.8%.

In its third and final estimate of first-quarter GDP out Wednesday, the Bureau of Economic Analysis said the U.S. economy shrank at an annualized pace of 1.6% in the first quarter, reflecting a deeper contraction than previously reported.

The Atlanta Federal Reserve projects next quarter’s print may reflect an even grimmer picture, with its estimate for real GDP growth in the second quarter of 2022 at -2.1% as of Friday, down from -1.0% on June 30.

“It’s increasingly likely that U.S. real GDP contracted for two consecutive quarters in the first half of 2022,” Comerica Chief Economist Bill Adams said in a note. “But unless the U.S. starts to see outright job losses, this period looks more like a slump than an outright recession.”

The Labor Department’s monthly jobs report due out Friday will offer a gauge of how the U.S. labor market is holding up against a backdrop of tightening monetary conditions, inflations, and growing warnings of an economic downturn.

Social media giant Meta (META) on Friday was the latest technology company scaling back hiring plans as it braces for an economic downturn. Last week, the company’s founder and CEO Mark Zuckerberg revealed this year’s hiring target was slashed by at least 30%.

"If I had to bet, I'd say that this might be one of the worst downturns that we've seen in recent history," Zuckerberg told employees during a weekly Q&A session which was recorded and heard by Reuters.

Job cuts have so-far been industry-specific – with losses most prevalent among the technology and real estate sectors. Hiring pauses, rescinded offers, and layoffs have accelerated across companies including JPMorgan (JPM) in its mortgage division, Microsoft (MSFT), Tesla (TSLA), Coinbase (COIN), and real estate platforms (RDFN) and Compass (COMP). Yahoo Finance is tracking a full list here.

But economic data has so far failed to suggest a broader hiring slowdown across the economy. Initial jobless claims held steady last week at 231,000, suggesting some moderation from the pandemic recovery but that labor conditions remain strong.

Last month’s jobs data is likely to tell a similar story. Economists are looking for job gains of 275,000 last month, per Bloomberg estimates – a slowdown from the 390,000 jobs created in May but a number that suggests payroll growth continues to charge ahead.

"Defensive leadership indicates a recession is looming, yet we find this difficult to reconcile for 2022 given full employment in the U.S," Comerica Wealth Management Chief Investment Officer John Lynch said in a recent report. "Full employment in the U.S. should prove a strong buffer against rising recessionary risks."

Only a handful of notable earnings reports are on the radar for traders after the long weekend, including results from denim retailer Levi Strauss (LEVI) on Thursday. But focus will shift back to Corporate America the week after when Wall Street's big banks get the ball rolling on earnings season July 14."

MY COMMENT

In other words NOTHING is happening this coming week. It is simply the same old issues that we have been PLAGUED by for the last six months.

 

I heard a local real estate and mortgage show on the radio on Friday as I was driving to my show. The host of the show is a local mortgage broker...he had a local realtor on as a guest. From what he was saying it sounds like the mortgage rate for a 30 year loan is now at about 6.6%.......with ZERO POINTS.

We now have between 1-2 months of inventory here in Central Texas......the highest inventory we have had in over a year......but.....still a sellers market. According to the realtor......properly priced homes are still getting multiple offers.

 

Here is some current TESLA data that will be of interest to shareholders and others.

Tesla delivered 254,695 electric vehicles in the second quarter of 2022

https://www.cnbc.com/2022/07/02/tesla-tsla-q2-2022-vehicle-delivery-and-production-numbers.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• Tesla just reported second-quarter vehicle production and delivery numbers for 2022.
• A year ago, Elon Musk’s electric car business delivered 201,250 vehicles in the second quarter.
• Tesla was hamstrung during the period ending June 30, 2022, by parts shortages, supply chain snarls and Covid restrictions that forced China’s Shanghai factory to close or operate only partially for weeks.

Tesla just posted its second-quarter vehicle production and delivery numbers for 2022. Here are the key numbers:

• Total deliveries Q2 2022: 254,695
• Total production Q2 2022: 258,580

Delivery numbers, which are the closest approximation of sales reported by Tesla, fell just shy of analysts’ expectations.

According to a consensus compiled by FactSet-owned Street Account, analysts were expecting deliveries of 256,520 vehicles for the quarter, which was marked by Covid restrictions, supply chain snarls, semiconductor chip and other parts shortages.

Last year, Tesla delivered 201,250 vehicles in the second quarter, its first time delivering more than 200,000 units in a three-month period. In the first quarter of 2022, Tesla delivered 310,048 vehicles.

Today’s delivery numbers represented sales growth of 26.5% year-over-year, and a 17.9% decrease sequentially for Elon Musk’s electric vehicle venture.

The company has soft-guided to around 50% average annual growth, long-term, depending on manufacturing capacity and other factors.

In Tesla’s first-quarter shareholder deck, the company said, “We plan to grow our manufacturing capacity as quickly as possible. Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries.”

In China this quarter, Tesla had to shut down or only allow partial operations at its Shanghai factory for weeks due to covid-related public health orders. (FactSet noted that some analysts’ projections were excluded from the StreetAccount consensus if they did not take into account the Shanghai factory shutdown.)

Other supply chain snarls, worsened by Russia’s brutal invasion of Ukraine, also impacted Tesla and the broader auto industry during the quarter.

Separately, Tesla is grappling with the high costs of building out and starting up production at new factories in Austin, Texas and near Berlin in addition to its Fremont, California and Shanghai plants. CEO Elon Musk has publicly lamented that the new factories are costing Tesla billions, but have not yet been able to make enough vehicles and batteries to justify their costs.

As startups and legacy automakers offer more new electric vehicles, Tesla’s share of the global and domestic EV market is expected to decrease but remain substantial."

MY COMMENT

They have to get those new factories under control and humming along. All in all not too bad on the delivery numbers considering all the big messes that are outside their control that Tesla is having to deal with.

The key to this year for the company will be full production and efficiencies at all five factories.

 

Just some food for thought.....what if we raise interest rates and nothing happens.

Raising interest rates is the wrong solution to the inflation problem, analyst says

https://www.cnbc.com/2022/07/05/hik...ng-solution-to-inflation-problem-analyst.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• Raising interest rates to tame demand and therefore inflation is not the right solution as high prices have been mainly driven mainly by supply chain shocks, MBMG Group managing partner Paul Gambles told CNBC.
• “Supply is very difficult to manage, we are finding across a whole bunch of industries, a whole bunch of businesses, they’re having very different challenges just turning the taps back on,” he said.
• “And the Fed are the first ones to put up their hands and say monetary policy can’t do anything about supply shock. And then they go and raise interest rates,” he added.

Raising interest rates to tame demand — and therefore inflation — is not the right solution, as high prices have been driven mainly by supply chain shocks, one analyst said.

Global manufacturers and suppliers have been unable to produce and deliver goods to consumers efficiently during Covid lockdowns. And more recently, sanctions imposed on Russia have also curtailed supply, mainly of commodities.

“Supply is very difficult to manage, we are finding across a whole bunch of industries, a whole bunch of businesses, they’re having very different challenges just turning the taps back on,” Paul Gambles, managing partner at advisory firm MBMG Group, told CNBC’s “Street Signs” on Monday.

Referring to the energy crisis that Europe faces as Russia threatens to cut off gas supplies, he said that “on American independence day, this is sort of a co-dependence day where Europe is absolutely shooting itself in the foot, because so much of this has come about as a result of sanctions.”

“And the Fed are the first ones to put up their hands and say monetary policy can’t do anything about supply shock. And then they go and raise interest rates.”

Governments around the world have, however, focused on cooling demand as a means of reining in inflation. The lifting of interest rates is intended to put demand more on an even keel with constricted supply.

The U.S. Federal Reserve, for example, increased its benchmark interest rate by 75 basis points to a range of 1.5%-1.75% in June — the biggest increase since 1994 — with Chair Jerome Powell flagging there could be another rate hike in July.

The Reserve Bank of Australia is set to raise rates again on Tuesday, and other Asia-Pacific economies like the Philippines, Singapore and Malaysia have all jumped on the same rate hike bandwagon.

The Fed said in a statement it opted to raise rates as “overall economic activity” appeared to have picked up in the first quarter of the year, with rising inflation reflecting “supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.”

Monetary policy the ‘wrong solution’

Gambles said demand is still below the level it was at before the pandemic started, but would’ve fallen short even without the roadblocks of Covid.

“If we look at where employment would have been in the States, if we hadn’t had Covid, and we hadn’t had the lockdowns, we’re still about 10 million jobs short of where we would be. So there’s, there’s actually quite a lot of potential slack in the labor market. Somehow that’s not translating to the actual slack,” he said.

“And, again, I don’t think that’s a monetary policy issue. I don’t think monetary policy would make a great deal of difference to that.”

With supply shocks rearing their ugly heads from time to time, it would be hard for central banks to maintain a sustained grip over inflation, Gambles added.

Gambles argued that the United States should instead look at a fiscal boost to fix inflation.

“The U.S. federal budget for the financial year 2022 is $3 trillion on a gross basis lighter than it was in 2021. So we’ve got, you know, we’ve got a huge shortfall going into the U.S. economy. And, you know, there’s probably very little that monetary policy can do about that,” he said.

Gambles says adjusting monetary policies is “the wrong solution to the problem.”

Other “unconventional economists” — cited by Gambles in the interview — such as HSBC senior economic advisor Stephen King, have also put forward analyses saying that it’s not simply either demand or supply shock that is to blame for inflation, but the workings of both sides of the equation.

Both pandemic lockdowns, supply chain upheavals and the Russia-Ukraine war, as well as the stimuli governments pumped into their economies and loose monetary policies, have contributed to rising inflation, economists like King have said.

“Economically, the COVID-19 crisis was regarded by many primarily as a demand challenge. Central banks responded by offering very low interest rates and continued quantitative easing, even as governments offered huge fiscal stimulus,” King said in a note earlier this year, referring mainly to the pandemic.

“In truth, COVID-19 had only limited lockdown-related, demand-side effects in the advanced economies.”

“Supply-side effects have proved to be both large and far more persistent: markets now work less well, countries are economically disconnected, and workers are less able to cross borders and, in some cases, less readily available within borders. Loosening policy conditions when supply performance has deteriorated so much is only likely to lead to inflation.”

Since supply is unable to respond fully to increased money coursing through economies like the United States, prices have to rise, he added.

Still a popular antidote

Nevertheless, interest rate hikes remain the popular antidote to fix inflation.

But economists are now concerned that the use of interest rate hikes as a tool to solve the inflation problem could trigger a recession.

A rise in interest rates make it more expensive for firms to expand. That, in turn, could lead to cuts in investments, ultimately hurting employment and jobs."

MY COMMENT

I would not be surprised at all if the interest rate cuts dont do anything. We are currently experiencing world wide supply and demand issues. We are also experiencing a totally disrupted jobs and labor market. I do not accept that interest rate increases and/or causing a recession is necessarily going to do much at all.

In addition there is ZERO DOUBT......that a bunch of government or academic economists dont have the slightest clue what to do or how to do it.

LUCKILY......as a long term stock investor.....I simply dont care. I dont care about what they do or the recession that we are already in. There will simply come a time over the next 6-24 months that the markets and business turn positive and continue their usual march upward. I dont care at all if we are "probably" in a recession right now. I dont invest based on a bunch of economic mumbo-jumbo and fantasy.

 

Looks like we are back to "normal" today. ALL the market averages are down......gold and silver are down....Bitcoin is down.

We are in the middle of a 6-12 month additional BEAR MARKET and RECESSION. A perfect reflection of the policies and total delusional fantasy that is coming from the top leadership of the country.

I WILL NOT talk politics in this thread.......and......that is STILL my policy. BUT.....I notice in article after article.....day after day....ZERO discussion about the leadership and policy issues that are INHERENT to what is going on in the economy right now. EVERY article talks about inflation, or oil, or economic data.......BUT.....there is ZERO discussion of why these issues are happening right now.

We are looking at a significant "PROBABILITY"......not certainty.....of an extended dismal economy and markets. At least 6-12 months.....and.....worst case till the end of 2024.

For us poor investors........those of us that have the guts......will just have to ENDURE this time period and hope that change happens at some point along the way to put us back on the right economic and business track.

 

I like this little article.

The Worst 6 Months Ever For Financial Markets

https://awealthofcommonsense.com/2022/07/the-worst-6-months-ever-for-financial-markets/

(BOLD is my opinion OR what I consideer important content)

"The first 6 months of 2022 were dreadful for financial markets.

In fact, you could argue we just lived through one of the worst 6 month periods EVER for stocks and bonds.

This isn’t hyperbole. The data backs it up.

Here’s a look at the rolling six month returns1 for the S&P 500 going back to 1926:


Not good.

The period ending June 30, 2022 ranks in the worst 3% of all 6 month returns since 1926.

The only 6 month performance numbers that were worse than what we just lived through occurred during the Great Depression, 1937 crash, WWII, 1970s bear market, bursting of the dot-com bubble and 2008 crash.

That’s a who’s who of terrible, no good returns.

Adding insult to injury, bonds had one of their worst 6 month runs as well. Through June, 5 year treasuries were down 6.4% on the year. The -7.4% return on 5 year government bonds through May 31, 2022 was the second-worst 6 month return ever (only topped by the 8% loss in early 1980).

So it would make sense that a 60/40 portfolio of U.S. stocks and U.S. bonds also had one of its worst 6 month stretches of all time:


The 6 month returns for a 60/40 portfolio were in the bottom 2% of rolling returns going back to 1926.

This means 98% of the time, returns have been better than what we just lived through.


It was also just the 4th time over the past 100 years or so that stocks and bonds were down two quarters in a row at the same time.

The last time U.S. stocks and intermediate-term bonds were both down two quarters in a row occurred in the first two 3 month periods in 1974.

Inflation was doubled-digits back then so both of these time frames had an even worse experience on a real return basis.

This rare double-dip for stocks and bonds also took place in 1969.2 The only time I could find that saw stocks and bonds both down for three quarters in a row was in the last 9 months of 1931.3

It’s never happened four times in a row for both simultaneously. Hopefully we don’t go setting any new records this year.

I could offer a pep talk here but it wouldn’t do much good. Simply surviving is a worthy goal when things go this badly in the markets.

There are plenty of companies and investors that have blown themselves up these past few months that didn’t survive this bear market.

It’s no fun to lose money but there are some silver linings here.

If you’re making contributions to a 401(k) or IRA on a periodic basis you can now buy the stock market at prices that are 20-30% lower than they were just 6 months ago.

You can also earn around 3% on intermediate-term U.S. government bonds instead of the 0.4% to 0.9% you could earn just 18 months ago.

No one wants to hear this right now but expected returns are now higher than they were before coming into the year. We just had to go through some losses to get to this place.


The other positive is you don’t have to listen to people brag about how easy it is to get rich anymore. That has to count for something, right?

I hate to be that guy, but 6 months is also a short period of time in the grand scheme of things. If 6 months is going to make or break your investment plan, it wasn’t a very good plan to begin with.

If you’ve only been investing for a short time, this is a good initiation into the way markets work sometimes. Down markets are a good thing if you’re going to be a net saver for more than the next few years or so.

Lots of people think bull markets are how you get rich but true wealth is built during bear markets, especially when you’re young.

And if you’ve been invested for the past 5-10 years or more the gains you’ve made (assuming you stayed invested) have more than made up for the current losses.

That doesn’t mean the current losses don’t sting but you can’t expect markets to go up and to the right every year without fail.

I don’t know what the next 6 months or even 6 years will bring in the financial markets.

There could be more pain ahead or markets that go nowhere or who knows what else.

There’s no such thing as ‘always’ or ‘never’ when it comes to the markets but I feel strongly that investing in the midst of awful stock and bond returns will be a good idea over the long run.


Risk and reward are inextricably linked at the hip.

You cannot earn decent long-term returns without experiencing periods of excruciating losses from time to time.

The past 6 months were one of those times.

I for one am excited to be putting new money to work at much lower prices."

MY COMMENT

I like the data and discussion above on the REALITY of the current time period. I also like the last half of the article outlining the positives for investors that take advantage of this time period.

This will be the perfect example of what it is like to invest during a soul-sucking bear market and recession. Are you getting tired out by this market after the past six months? Just wait till we go through the next 6-12 months.

 

I am seeing a lot of information about housing on a national level. I think the housing markets have put on the brakes over the past 3 weeks. There has been a definite change. You can just feel it. The mania.....on a general level.....is over. I am calling it.

BUT....that does not mean on a local level that every part of the country will be the same. Most of the national market will come to a halt....but....some local areas will remain strong. It remains to be seen how firm prices will stay in any particular local area.

 

I like this little article.......actually, just common sense.

US officials unable to measure 'hiring freeze' impact, but confident current openings can limit damage
The White House cited '11 million job openings' as an effective buffer

https://www.foxbusiness.com/markets/us-officials-hiring-freeze-impact

I will leave it up to anyone that wishes to read it. It is obvious from the headline. I agree completely. The economic data and the so called 10MILLION jobs are a delusional myth. If there are millions of unfilled jobs....they are in the minimum wage category. On the corporate level.....my view is that hiring has collapsed. Companies are not idiots.....they are very good at pulling back and cutting in the current type of environment.

Business is not going to hire into this kind of environment. They will pull back and wait to see what is going to happen. In fact.....this is what the average person should be doing also. This is not the time to take on debt. It is a time for both business and families to avoid debt, cut expenses, maintain productivity, and operate on a lean and mean basis.