Fed Cuts Fed Funds Rate by Half Point MoneyNews Wednesday, Jan. 30, 2008
WASHINGTON -- The Federal Reserve cut a key U.S. interest rate by a half-percentage point Wednesday as part of an aggressive effort to halt a sharp slowdown in an economy hit by a housing slump and a credit crunch. The Fed's action takes the bellwether federal funds rate target to 3 percent, the lowest since June 2005, and comes just eight days after it slashed rates by a bold three-quarters of a point. Wednesday's follow-up reduction was in line with the expectations of many financial market participants.
The cumulative 1.25 percentage point reduction in the benchmark overnight rate in less than two weeks ranks among the most abrupt rate-cutting sprees in the modern history of the U.S. central bank.
Gross domestic product numbers for fourth quarter issued today by the U.S. Commerce Department tell us what we already know – things are slowing. Economic growth has been much slower over the last three months of the year than the previous quarter, rising a feeble 0.6 percent, substantially lower than the 4.9 percent growth for the third quarter.
A big drop, but is that a recession?
The financial press, looking for certainty, has come to define a recession as two consecutive quarters of negative growth. Literally, the economy has to shrink, not just grow more slowly.
The National Bureau of Economic Research, a private, nonprofit, nonpartisan research organization, considers recession more broadly, as a "significant decline in economic activity spread across the economy, lasting for more than a few months." Problem is, that vagueness means that the NBER is unable to really call a recession until it’s nearly over.
Yet, by either definition, we’re not there quite yet. The economy has to report some more numbers, either piecemeal or as part of first quarter GDP, to indicate that the slowdown everyone expects is, in fact, here.
What matters now are predictors of future economic activity, the economy of six to nine months down the road, what economists call the 10 "leading" economic indicators.
These are contained in a composite data index issued monthly by The Conference Board of the NBER.
They are as follows:
• Initial jobless claims
• New orders to manufacturers for consumer goods and materials
• The average manufacturing worker workweek
• Vendor performance
• New orders to manufacturers for non-defense related capital goods
• Building permits
• S & P stock prices
• Inflation-adjusted M2 money supply
• Interest rate difference between the Ten Year Treasury note and the Feds funds rate
• Consumer sentiment index
The composite index, which combines these figures, tends not to influence the stock market because all of the data has been reported individually prior to the release of the index.
The index comes in three versions, leading, real-time and lagging.
For what’s worth, on Jan. 18 the December leading index fell 0.2 percent, the "coincident” or real-time index rose 0.1 percent, and the lagging index rose 0.4 percent. A mixed bag, it would seem.
The Conference Board sees things more darkly. To quote from a recent statement on the economic outlook for the next few months:
"Taken together, the recent behavior of the composite indexes highlights the increasing risks for further economic weakness, and suggests that economic activity is likely to be sluggish in the near term."
It was I Bumble,[ there's no cure for stupid]. What ever happened to the " you can afford a house as long as it doesn't exceed one third of your monthly income rule" that the banks used to follow b4 they would approve a home loan?
When you buy a home, you must also take into consideration the unforeseen future. If the mortgage is based on both salaries, what happens if one should become ill?
A few years back, my husband was diagnosed with cancer. That was in November. Two months later, while he was going through his chemo, I fell and broke my leg in 3 places. We were both out of work until the following November. Within those months, my husband went through a stem cell transplant at Albany Med where he was a patient for 1 month. My leg took 9 months to mend. (they say it was because of my age )We were both on disability and we drained most of our savings.
Our children are grown now, so it was just the two of us. But what it we had small children and a huge mortgage? I am not saying that we should live our lives looking over our shoulder for the grim reaper. But unexpected things do happen and should be planned for.
Spending slows; jobless claims rise Unemployment at highest rate since Katrina BY MARTIN CRUTSINGER The Associated Press
WASHINGTON — Buffeted by soaring fuel prices and tighter credit, consumers increased their spending at the weakest pace in six months. In other signs of trouble, applications for unemployment benefits last week soared by the largest number since Hurricane Katrina. The Commerce Department reported Thursday that consumer spending edged up just 0.2 percent in December — the year’s peak shopping season. That was down sharply from a 1 percent gain in November. It was the weakest performance in this area since a similar 0.2 percent rise in June of last year. Meanwhile, the Labor Department reported that the number of laid-off workers filing applications for unemployment benefits increased by 69,000 to 375,000 last week. That was the highest level for jobless claims since the week of Oct. 8, 2005, when the economy was dealing with the disruptions caused by Hurricane Katrina and other Gulf Coast hurricanes. The increase in jobless claims was more than triple what economists had been expecting, although part of the increase was blamed on technical difficulties in adjusting the figures around the Martin Luther King Jr. holiday. Analysts said the greater concern was the slowdown in consumer spending, which they predicted would continue in the current quarter, the period many believe will be the maximum danger point for a recession. The overall economy, as measured by the gross domestic product, slowed to an anemic growth rate of 0.6 percent in the final three months of 2007, half of what had been expected, and many analysts believe it could dip into negative territory in the current quarter. By one definition, a recession occurs when GDP is negative for two consecutive quarters. David Wyss, chief economist at Standard & Poor’s, said he was forecasting that GDP would decline at an annual rate of 1 percent in the current quarter, in large part because of the expected further slowing in consumer spending, which accounts for two-thirds of economic activity. “Happy holidays is not a phrase that retailers are using to describe this year’s shopping season,” said Joel Naroff, chief economist at Naroff Economic Advisors. Despite widespread discounting, retailers slogged through their weakest Christmas sales season in five years as consumer confidence was shaken by the deep slump in housing, a severe credit squeeze and last year’s big increases in the cost of gasoline and other energy products. The unemployment rate rose significantly in December, jumping to 5 percent from 4.7 percent in November. That was the biggest one-month increase since the period immediately following the September 2001 terrorist attacks. The January jobless number will be released today, with analysts expecting it will be unchanged at 5 percent as payroll growth continues to be sluggish with an expected increase of around 65,000 jobs.
Factory orders worst since 2002 December uptick called ‘candle in the hurricane’ BY JEANNINE AVERSA The Associated Press
WASHINGTON — U.S. factories saw demand for their products rise in December by the largest amount in five months, a spot of welcome news that failed to change the picture of an economy struggling to stay afloat. The Commerce Department reported Monday that orders placed with U.S. factories rose by 2.3 percent in December. That was an improvement from the 1.7 percent gain posted in November and marked the biggest increase since July. The performance in December was slightly better than the 2 percent rise that economists were forecasting. Still, Richard Yamarone, economist at Argus Research, likened the December uptick to “a candle in the hurricane.” On Wall Street, stocks slid. The Dow Jones industrials lost 108.03 points to close at 12,635.16. Orders for “durable” goods — big-ticket items, such as cars, that are expected to last at least three years — rose by 5 percent in December, up from a 0.5 percent advance in November. Demand for “nondurable” goods — including clothing, textiles and beverages — dipped, however, by 0.4 percent in December, compared with a 3 percent rise in November. For all of last year, total orders — durable and nondurable goods — placed with U.S. factories went up by just 1.4 percent. It was the worst performance since 2002, when the economy was struggling to recover from the 2001 recession. In 2006, factory orders rose by 5.1 percent. Manufacturers have been hard hit by the housing bust and a struggling automotive sector. They also continue to cope with fierce competition from overseas producers. Against that backdrop, factories eliminated 28,000 jobs in January and have cut 269,000 jobs over the past 12 months, the government reported last week. The economy as a whole lost 17,000 jobs last month. That marked the first nationwide loss of jobs since August 2003, when employers were still working to get back on their feet after the recession. A more forward-looking report, released Friday, suggested manufacturing gained some ground in January. The Institute for Supply Management’s index of factory activity rose last month to a reading of 50.7, an improvement from the dismal reading of 48.4 posted in December, which suggested the sector had shrunk at that time. A reading above 50 indicates growth, and below that level indicates contraction. With fears of a recession growing, the Federal Reserve has ratcheted down interest rates — ordering two big rate cuts over the span of just eight days in January. It marked the central bank’s most aggressive rate-cutting actions in two decades. The economy almost stalled in the final three months of last year, growing at a feeble pace of just 0.6 percent. Some economists believe growth in the current January-to-March quarter could be just as weak. Others think the performance will be worse — with the economy actually contracting during the quarter.
The "inevitable" recession is already here. Activity in the service sector (the largest sector in the US economy, and much better indicator than manufacturing) has declined considerably, with many areas cutting jobs as well. The service sector is a broad area including retail, real estate, finance, health care, etc.
By MADLEN READ, Associated Press Tuesday, February 5, 2008
NEW YORK -- Stocks slumped for the second straight session Tuesday, after an unexpected contraction in the service sector rekindled investors' worry that the economy is headed for recession. The Dow Jones industrial average fell more than 250 points, while bond prices surged.
The Institute for Supply Management's January report on the service sector, which accounts for about two-thirds of the economy, came in well short of Wall Street's forecast. The index dropped to 44.6 last month from a revised reading of 54.4 in December. A reading below 50 indicates contraction; it was the first service-sector contraction in more than four and a half years. Economists had been expecting another month of growth...............http://timesunion.com/AspStori...../2008&TextPage=2
Service sector shrinks, shocks Dow BY VINNEE TONG The Associated Press
NEW YORK — Lingering hopes that the U.S. economy might avert a recession withered Tuesday after the nation’s service sector — its banks, travel companies, contractors and stores, among others — shrank for the first time in five years. It was unwelcome news for many investors, who were beginning to believe that the Federal Reserve might engineer a way out of the worst economic slowdown since 1991. Stocks tumbled, with the Dow Jones industrial average losing 370 points, its biggest point drop since August. Much of the talk was not about whether there would be a recession, but about how bad it might be. “The number’s so terrible it’s almost beyond belief, especially among the optimists,” said Scott Anderson, senior economist at Wells Fargo & Co. “I think the writing’s on the wall. More and more economists are talking about recession, and whether it’ll be a severe or mild one.” The January reading from the Institute of Supply Management “was about as big a shock as you can probably get,” said Joel Naroff, chief economist at Commerce Bancorp. Anderson said he believes January may end up being the official start of a recession. Many businesses already suspect as much. Moving company Allied Van Lines filed for bankruptcy on Tuesday, saying it had fallen victim to the downturn in the housing market and its own heavy debt load. Charming Shoppes Inc. — which runs the Petite Sophisticate and Lane Bryant clothing stores — said it would cut 200 jobs and close 150 stores. Stocks of rental car companies plunged Monday after Dollar Thrifty Automotive Group Inc. slashed its 2007 earnings guidance. The company said it sees weak demand in the travel market and soft used-car sales. Ryan Kaminski, who runs a Mexican restaurant in Sarasota, Fla., said the squeeze he has felt as both a business owner and a consumer since last summer is growing worse. The restaurant’s traffic started thinning out last summer, pulling 2007 sales down 10 percent from a year earlier, and so far this year sales are down 15 percent from a year ago. “I used to be able to find a person from any trade — carpenters, electricians, plumbers — in the restaurant every day,” he said. “Since the housing market crashed, it’s just dried up. Those type of customers are just gone.” Kaminski, 31, said he and his wife don’t spend much anymore either. “We’ve cut out eating out and we didn’t go on vacation last year,” he said. “It’s getting bad.” In the tourism sector, water park operator Great Wolf Resorts Inc. is seeing a drop in business at its resorts in Traverse City, Mich., and Sandusky, Ohio — two areas where jobs are dependent on the sagging auto industry, said the company’s chief executive, John Emery. Business is up slightly overall for the Madison, Wis.-based operator of 10 resorts. But at the Rust Belt parks, families are cutting their spending by 2 percent to 4 percent. “Those are tough markets for families for right now,” Emery said. Executives surveyed for the service sector report by the Institute for Supply Management fretted over the economy, high oil prices, the falling stock market, lower customer demand, stiffer competition and sluggish sales, said Anthony Nieves, chairman of the trade group’s non-manufacturing business survey committee. The ISM’s new composite index measuring the health of the service sector was 44.6 in January, below the level of 50 that indicates expansion. The group’s measure of non-manufacturing business activity fell to 41.9 in January from a revised reading of 54.4 in December — its largest drop ever. Economists surveyed by Thomson Financial/IFR had expected a slight slowdown but had still forecast growth, with a median estimate of 53. The last time the ISM reported that the service sector shrank — that is, registered less than 50 — was March 2003. “I think it will be tipping plenty of people over the edge” in convincing economists that the U.S. is in a recession, said Nigel Gault, chief U.S. economist at Global Insight. Gault said that in March 2001, the beginning of the last recession, the index had a breakeven reading of 50. And during that recession, the index hung around 48 or 49 — several points higher than January’s reading. “This is an absolute collapse of this index,” he said. Two measures that fell were those for new orders and employment, and that could signal more trouble ahead. New orders fell to 43.5 while employment fell to 43.9. The drop in employment is especially troubling, because the service sector has been the overall economy’s engine of job growth for months. Factories eliminated 28,000 jobs in January and have cut 269,000 jobs over the past 12 months, the government reported last week. The economy as a whole lost 17,000 jobs last month, which was the first nationwide loss of jobs since August 2003. The financial services industry, part of the wider service economy, has been especially hard hit by falling home prices, mortgage defaults, and the devaluation of mortgagebacked investments. After writing down their portfolios and putting money in reserve to prepare for further losses, banks, mortgage lenders and brokerages are now strapped for cash and have pared their payrolls to cut costs. Challenger, Gray & Christmas Inc., a placement consulting firm, said companies announced 69 percent more job cuts in January than in December, and about 21 percent of those were in the financial sector. According to the firm, the financial sector eliminated more than 153,000 jobs in 2007, a record amount.
We cant afford to pay folks to cook, clean, shop, wipe our butts etc, for us anymore.....less time at the movies and more time washing our own kitchen floors....pretty soon we can look forward to being our own lettuce pickers......
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
It's all about the global stock market and trying to keep an economic balance. Not really about the actual people that may be struggling while trying to pay a mortgage, taxes and feed and clothe their kids.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
I hear a sucking sound and I think it comes from our collected income tax and goes to----where?---yup Robin Hood and his merry men of the UN and those at the top of the pyramid....the house of cards is falling.....
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
I can now see how bailing out the S&L worked out for us------ >
But, Mr.Clemens is being deposed about steroid and human growth hormone use as we currently celebrate the NYGiants win in the super bowl.....circus sideshows at best leading the sheeple on a course to the cliffs edge.......
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
Foreclosure crisis leaves cities full of vacant homes BY JOE MILICIA The Associated Press
CLEVELAND — Judge Raymond Pianka views his courtroom as the emergency room of the foreclosure crisis. Weary of lenders and wholesalers who don’t show up to answer to housing code violations like unsecured doors and windows on foreclosed properties, he began holding trials without them. He’s put 12 companies on trial in absentia and has fined most, leaving each unable to sell any properties in the area until it pays up. Rust Belt cities, already beaten down by a miserable economy before foreclosures began spiraling nationally, are moving to cut the number of houses left vacant when the mortgage can’t be paid. At stake are valuable tax dollars and the survival of neighborhoods. County treasurers and mayors are fi ling lawsuits and developing land banks to buy distressed properties and either demolish them or repair and sell them. Buffalo brings property owners and lenders together in court on monthly “Bank Days” to find solutions for cleaning up vacant homes. “It’s not a matter of if we do it. It’s a matter of when we do it,” City Councilman Tony Brancatelli said of the land bank planned in Cleveland. “We can’t afford to miss this opportunity. The countywide land bank is going to be a great opportunity for us to seize real estate. We have to stop the cycle of abandonment,” he said. A record-setting number of foreclosures nationally has helped drive down the U.S. economy. A report commissioned last November by the U.S. Conference of Mayors projected that 361 metropolitan areas would take an economic hit of $166 billion in 2008. Cuyahoga County, which includes Cleveland, has about 17,000 vacant foreclosed properties — roughly 4 percent of its 395,000 houses. Baltimore has 16,000, up from 12,300 in 2000. “The homeowner just assumes, well, the bank’s going to take my house, but the bank can make the economic decision not to take the house,” said Cindy Cooper, a Housing Court prosecutor in Buffalo. “Then that leaves two parties walking away, each one thinking that the other is going to take care of the house.” Pianka still lives in the neighborhood where he grew up and knows firsthand the blight of houses with boarded-up windows. “The scrappers are taking the jewelry off the corpses that are left,” he said from his 13th-floor office, which overlooks frozen Lake Erie. He’s well regarded among members of the Warsaw Neighborhood Block Watch Club, who have spent time in his courtroom, determined to see something done about open, vandalized homes in their Slavic Village neighborhood. Vacant houses, some stripped bare of aluminum siding, dot the streets, casting a gloom on their well-maintained neighbors. “It scares people,” said Joyce Porozynski, a block watch member who has lived in the neighborhood most of her life. “Many people have given up.” Across the street from Charles Gliha’s cozy 120-year-old home stand three vacant houses, including one with the fi rstfloor windows broken out. Another is being repaired, and a sign in the window warns would-be thieves that there are no copper pipes inside. Gliha, a woodworker, has not given up hope and has no plans to leave the home where he grew up. “People are the critical resource and as long as we have good people like Joyce, we’ll be fine,” he said. “We may be in better shape in 20 years than the suburbs because we’ve got a culture in this neighborhood that outer ring suburbs don’t.” Cleveland, among cities hardest hit by the foreclosure crisis, is modeling its land bank after a program in Genesee County, Mich., home to Flint, which made tax delinquent properties available for redevelopment. About 6,300 residential, commercial and industrial properties have been obtained since the Genesee County Land Bank started the program in 2002. About 2,300 parcels have been passed to new owners. The goal of Cleveland’s program, which must be authorized by legislation, would be to spend $6 million to $10 million a year. The Genesee County Land Bank also is serving as a model for Baltimore, where abandoned properties are as symbolic of the city as crab cakes and purple Ray Lewis jerseys. About six years ago, the city began aggressively buying up abandoned properties, acquiring more than 6,000 in that span. The city has done little to reinvigorate those properties. A housing department report last fall said it generally took the city more than three years to foreclose on and dispose of one piece of property. The department recommended creating a land bank that would take possession of abandoned properties and streamline their sale. In the interim, Baltimore plans to create a nonprofit this year that would perform similar functions. “The goal is, ultimately, we spent the last five years buying property, and we want to, in a really disciplined, aggressive way, be able to return those properties to some kind of private ownership,” Deputy Mayor Andrew Frank said. Baltimore and Cleveland also have sued mortgage lenders, saying they’re losing millions of dollars in tax money and in protecting or demolishing abandoned homes. Buffalo Mayor Byron Brown last year announced a plan to demolish 5,000 vacant structures in five years. The city will put up $20 million of the $100 million cost and ask the state and federal government for much of the balance. In cases of foreclosure, the city charges the homeowner and the bank with the same building violations for things such as peeling paint and broken windows. On “Bank Days,” the idea is to hammer out who will take care of repairs. “If the house is not in a terrible state, a lot of times the bank will discharge the mortgage so that the property can be donated either to a neighbor to be demolished or a nonprofit organization for rehabilitation,” Cooper said. Other times, each side pays a share. In Cleveland, Destiny Ventures of Tulsa, Okla., sent Pianka’s court a check for $53,036.75 a few weeks ago to cover its fine plus interest and attorney fees. Destiny Ventures did not return a phone message seeking comment on the judge’s trials. Jerry Reisman, a New York real estate attorney whose clients include major banks and finance companies, believes that land banks are promising and that Pianka’s tactics are justified. He doesn’t think those actions will affect prudent lenders’ willingness to work with homeowners in those cities — if the lenders are acting responsibly, they won’t be affected. “We need more effort by the government to step in here to assist homeowners,” he said. As a housing court judge, Pianka is on the low rung of the judicial system, a bungalow among mansions. He’s heard himself referred to as a “rat court judge” at judicial conferences. He embraces the role. “Many times I feel like the mouse that roared,” he said, later adding, “Finally, they’re paying attention to us.”
By JEANNINE AVERSA, Associated Press Sunday, February 10, 2008
WASHINGTON -- Empty homes and for-sale signs clutter neighborhoods. You've lost your job or know someone who has. Your paycheck and nest egg are taking a hit. Could the country be in recession?
Sixty-one percent of the public believes the economy is now suffering through its first recession since 2001, according to an Associated Press-Ipsos poll. The fallout from a depressed housing market and a credit crunch nearly caused the economy to stall in the final three months of last year. Some experts, like the majority of people questioned in the poll, say the economy actually may be shrinking now. The worry is that consumers and businesses will hunker down further and pull back spending, sending the economy into a tailspin. "Absolutely, we're in a recession," said Hilda Sanchez, 44, of Waterford, Calif. Squeezed by high energy and food bills, "we can't afford the things that we normally buy," she said. "We are cutting corners in our spending. For our groceries, we are buying a lot of generic and we are eating out less." For many, the meltdown in the housing and mortgage markets has proved especially disturbing. Record numbers of people were forced from their homes, unable to afford the monthly loan payments. People watched their single biggest asset fall in value, a reason to tighten the belt. "Obviously the housing market is creating deep concern. And one of the real problems could be that if people, as a result of their value of their homes going down, kind of pull in their horns," President Bush said in a television interview aired Sunday. Credit has become harder to get, thwarting would-be home buyers, adding to the glut of unsold homes and aggravating the housing industry's woes. "For-sale signs are everywhere. In my area, 35 to 40 homes are standing there and aren't even complete. There aren't any buyers," said Jim Sims, 60, of Greer, S.C. Nanette Dahlin, 52, of St. Louis Park, Minn., called the situation "very scary." She said friends in Madison, Minn., put their home up for sale recently and reduced the asking price more than $100,000 in just a week. "They are in bad shape," Dahlin said. For all of 2007, the economy grew by just 2.2 percent. That was the weakest performance since 2002, when the country was struggling to recover from the last recession. The housing collapse was the biggest culprit in 2007. Builders lowered spending on housing projects by 16.9 percent on an annualized basis, the most in 25 years. The job market is faltering -- a point driven home by a report showing that employers cut jobs in January for the first time in more than four years. "The way things are, people are afraid of losing their jobs," Sanchez said. Employment concerns are contributing to darker feelings about the economy and people's own financial well-being. Consumer confidence, as measured by the RBC Cash Index, dropped to a mark of 48.5 in early February. It was the worst reading since the index began in 2002.A cooling job market along with high energy and food prices are taking a toll on paychecks. Workers' average weekly earnings, adjusted for inflation, fell 0.9 percent last year. In 2006, earnings grew by a solid 2.1 percent. Wall Street is unsettled and as a result, people's nest eggs are not what they once were. In fact, that was the top economic worry in the AP-Ipsos poll. Fifty-nine percent said they were worried "a lot" or "some" about seeing the value of stocks and retirement investments drop. "I really dread opening my (financial) statements," Sims said. By one rough rule of thumb, a recession occurs when there are two consecutive quarters -- six straight months -- when the economy shrinks. That did not happen in the last recession, though. The economy contracted in the first quarter of 2001, turned positive in the second quarter, shrank in the third quarter and turned up again in the final quarter of that year. The National Bureau of Economic Research, the recognized arbiters for dating recessions, uses a more complicated formula. It takes into account such things as employment and income growth. By that measure, the last recession was in 2001, starting in March and ending in November. Bush, citing some experts, said the U.S. was not in a recession, although he acknowledged "that the signs are troubling enough" to justify the $168 billion economic rescue plan that passed Congress this past week. The measure he intends to sign on Wednesday includes tax rebates for people and tax breaks for businesses. To bolster the economy, the Federal Reserve embarked on a rate-cutting campaign in September, with two big reductions last month. In just eight days in January, the Fed slashed rates by 1.25 percentage points. The hope it that the lower rates will induce people to buy more and revive the economy. So if the poll figure of 61 percent is right -- that the country is now in recession -- then those relief efforts will help ease the effect of a downturn. "People are both depressed and anxious about the state of affairs. The anxiety is going to persist because we are in an uncertain season economically and politically," said Terry Connelly, dean of Golden Gate University's Ageno School of Business.