Cypress Capital - Richard Arvedlund

Posted by: Pro

Updated:
03.26.07
Views:
User Rating:
3.75/4
TheStreet Rating:
C+
RATE NOW
Log in to rate this portfolio
Follow
Log in to follow

Description:

Featured in a Barrons interview on November 13, 2006. Arvedlund was fairly bearish on the US economy, stating that all the preconditions are in place for a recession. For instance: "whenever housing starts and permits drop by the rates of decline that have been exhibited - 10% to 20% -it has always preceded a recession." Also, "the other area that will hurt the economy is that all the major domestic auto makers have announced double-digit declines for the quarter and early 2007." And, "The third precondition for a recession is a flat to inverted yield curve. Flat to inverted yield curves only occur before recession, not slowdowns." In other words, "We now think there is a 40% to 50% probability of a recession. Next year should be a very difficult time for the US economy."

Although he's neutral on the effects of Dems vs Republicans on the economy he's nervous about any increase in the minimum wage: "That will raise unit labor costs throughout the economy...It will impact profit margins. It will definitely have an impact on profit margins."

As of 12/31/06