In 2008, the economy fell into a recession and financial institutions and banks were in a depressed state. Also, the unemployment skyrocketed, which had a lot to do with the falling economy. In my opinion, there were healthy banks and the government got involved bailing out banks and financial institutions. However, there were a lot of healthy banks with a lot of money and no debt. By the government’s involvement, conditions worsened: with panic, forcing banks to buy other companies, and giving them bail out money, which they did not need. In time, if the government stayed out, I feel that the economy would have turned around in 6-9 months and the market would have become stronger on its own. Here we are, 8 years later, with no growth whatsoever. A lot of companies are not making money even though the government said the unemployment is at record low levels: there are people losing jobs and leaving the workforce. The true unemployment figure is probably around 9-10% when you take into consideration the total workforce, people not looking for jobs, and people not working. The government instituted the health bill and that made matters worse instead of better, and issued all kinds of financial restrictions with banks. The amazing thing is that banks that were forced to buy other banks were actually sued by the government when they did nothing wrong.
As of today, we have a new administration and I feel with fewer restrictions, the creation of more jobs and the restructuring of the new healthcare, the economy will show a tremendous improvement within the next 6-9 months. There are still many companies that are on record lows, that are losing money; but a good, well managed company will turn around and make money. I am not that optimistic with the last quarter of 2016 and the first quarter of 2017. I don’t know how they figure the Gross Domestic Product; I believe it should be negative for the last quarter instead of plus, yet I am more optimistic for the third and fourth quarters of 2017. The most important thing is to create good-paying jobs for the American people. We are a divided nation, as of today. And as Abraham Lincoln said, “a house divided amongst itself cannot stand.” The company’s I am watching include: Bristol-Myers, Under Armour®, Simon Property Group, Inc., and Macy’s®. I feel that the biotech industry and healthcare should be the leaders of 2017.