The past week's market drops and swings are dizzying.
Everyday people are commenting that it is scarier than 2008. Now, that probably isn't true because no one is anticipating the inability to take money out of ATMs or the commercial paper market shutting down. Yet, there is something unnerving about the market declines, the uncertainty surrounding the economy and the lack of confidence in political leaders. Right now, people have more questions than answers.
Here are the top five questions for the remainder of 2011.
#1 - Will the Economy Get Better? The odds are against it. The "headwinds" are strong. We have high unemployment and incredibly high underemployment. To make matters worse, large corporations are not hiring, banks are laying employees off and state and local governments are cutting back dramatically. In addition, the housing market is in a depression and the recent decline of the stock market is hitting people's net worth. On top of it all, there is no comprehensive governmental plan for reducing debt and spurring growth. The Fed may be out of bullets and maintaining artificially low interest rates does not seem to be encouraging lending, hiring, home buying or consumer spending. Consequently, we may not see real economic growth for some time.
#2 - Will the U.S. Formulate a Plan to Put the Economy on Track for Long-Term Growth? The members of the "Super Committee" are starting to be slated. It is the Committee's job to formulate a plan for balancing the federal budget and improving the long-term fiscal outlook by reforming entitlements, implementing a pro-growth tax policy and reducing the federal debt to manageable levels. Once this plan is formulated, it goes to Congress and members of Congress are supposed to work together to reach a deal that the President can support. Will this will occur? From Thanksgiving to New Year's Eve will we be watching political finger-pointing and fighting? Have we seen this movie before? (It was called the "Debt Ceiling Debate" and it was not uplifting or inspiring.) Will we be watching the same movie again?