World Fence News

December 2011

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WORLD FENCE NEWS • DECEMBER 2011 • 47 For this annual forecast, the find- ing can be summarized by saying that the sky is overcast, with periods of rain and some sunlight. Well, here we are a year later and, while things are improved somewhat, year over year, we are still confronted with major hurdles, not only with the economy here at home, but an ever in- creasing global economic situation that is deteriorating and requires, in my judgment, a major re-capitalization of the banks as well as a clarification of total sovereign debt in order to begin the road to global economic re- covery. There have been proposals forth- coming on a regular basis from Sarkozy and Merkle (the president of France and the chancellor of Germany, respectively) as to how to resolve the European debt crisis, but as of this writing, nothing has been resolved to solve the problem. With all the nations involved in the European Union, it should come as no surprise as to how difficult it is to achieve consensus on any viable or working proposal. Further, the debt situation of the PIIGS (Portugal, Italy, Ireland, Greece and Spain) on an individual or collec- tive level requires something that is very difficult for everyone to agree on, and that something is called change. For example, change in the way that banks do business on the individ- ual or corporate level, and change in the way that the citizenry of those na- tions view their situation, in the name of austerity. It is very difficult to be sure, but it has to be done in order for us in the U.S. as well as other global market places not to be consumed by the "contagion" that is being played out, particularly in Europe. Frankly, the aforementioned situ- ation is casting a large shadow and overcast condition not only on the U.S., but on other parts of the globe as well. Now, to the U.S. Let's take a look back to the summer months, perhaps looking at the week following the Fourth of July. It was like a Midsum- mer Nightmare for stocks. At the close of July 7, the S&P 500 closed at 1353.22, within striking distance of a 2011 closing high of 1363.61 (estab- lished April 29th). From there, until the October 3 close of 1099.23, the most widely followed index in the world shed nearly 19% of its value. Much of this wealth destruction was the result of an unseemly debt- ceiling debate in Washington, D.C. and an obtuse, ill-timed credit down- grade of Uncle Sam by Standard and Poor's. But, there are legitimate issues in play: the maladroit handling could THE HUMAN LINK by Jim Lucci Management Motivational Associates Annual Crystal Ball Outlook Seeing some sunlight through overcast economic skies result in chains of events that tip vul- nerable economies into yet another re- cession. Fears of a European sovereign debt contagion persist, and there is no assurance a deal will be reached that adequately re-capitalizes vulnerable institutions, prevents the spread of debt-contagion and staves off the onset of another global financial crisis, par- ticularly in a political system where a libertarian faction in Slovakia can hold hostage 17 other member nations There is also concern about China and a "hard landing," and what this would do to global growth. It's impor- tant to note that the emerging market industrial production slowdown is pol- icy-enforced, due to concerns about in- flation. Emerging market growth, on average, is still strong; forecast to be around 7% in 2012, and if things slow to an uncomfortable level, policy mak- ers can reverse price decisions and get less restrictive, particularly in China. Turning more towards our own sit- uation here in the U.S., we will visit briefly a couple of indicators that will give us some positive hope for our own tepid, but nonetheless positive, growth. Usually, readings like this indicate an economy that's already in a reces- sion. But contributing numbers for September – data for jobs created, in particular – have been better than Au- gust and suggest that recession fears are overblown. (I am hopeful that we can build on that data, albeit slowly.) The Institute for Supply Saddle Winchester Grey Woodland Brown The ultimate in low-maintenance composite fencing. Now more available than ever, by the job, or by the truckload! contin ued on pa g e 50

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