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Pros Say: Investors Headed For 'Hard Landing' — Not Recovery

Stocks quickly retreated after a quick pop on Wednesday, as the previous day's optimism faded and General Motors stirred anxiety in the market. General Motors was down more than 10 percent as the automaker moved one step closer to Chapter 11; but sources close to the matter said they don't expect a bankruptcy filing this week. The deadline is June 1. Read and listen to what the optimists and pessimists had to say on these topics and more…

'Hard Landing' for Investors?

Investors’ "hope indicators" are high, but the fundamental indicators are still declining, said Mark Daniell of Cuscaden Group. He said the economy is still some time away from recovery. “People building their expectations on their hopes may be in for a hard landing,” he said.

Don’t Bank on a Recovery Yet

The U.S. consumer could remain weak and unchanged for some time and investors shouldn’t bank on a recovery just yet, said Stephen Gallo of Schneider Foreign Exchange. He said he is bearish on the dollar outlook.

Optimism in the White House

Christina Romer, chair of the Council of Economic Advisors, said the White House is “certainly optimistic” about the economy. But she said the economic data has been moving sideways for the past month and until we get some “seriously good news,” we can’t say that we’ve completely bottomed out.

Recovery Will be Muted for Time Being

While first signs of positive GDP growth is expected in the fourth quarter, any economic recovery will be mutedby the lack of available credit and high unemployment rates, said Craig Hester of Hester Capital Management. He said the real challenge of this economy will be for the Fed to successfully withdraw all the liquidity that they have placed without raising interest rates.

Stock-Buying Opportunity!

People are "still afraid" to put money back into the market, said Sarat Sethi of Douglas C. Lane & Associates. "Although I’m not a raging bull, this is the opportunity to find really good companiesthat you couldn’t buy 2 to 4 years ago," he said.

Saving American Autos

GM and Chrysler need to be restructured in a way where they can become and maintain profitability, said Thomas Steyer of Farallon Capital Management. He said their survival is critical to maintaining jobs.

The Fate of GM

Efraim Levy of Standard & Poor’s said it is “hard to predict” the outcome of GMand he doesn’t expect the bankruptcy process to be as smooth as Chrysler’s. “[GM] is more complicated, larger, and on a more global scale. There will be more lawsuits and will take longer,” he said.

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