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Evan Simonoff's FA blog
September 18, 2009
Liz Ann Sonders Meets The Sad News Bears

Speaking at this year's Schwab Impact conference, Schwab's chief market strategist Liz Ann Sonders painted a surprisingly upbeat picture of the economic recovery. While Schwab does not require her to make economic growth forecasts, she said she wouldn't be surprised if GDP growth exceeded 3% over the next few quarters.

She's not alone. Three days after she spoke, Barclay's issued one of the most aggressive forecasts yet, predicting that the giant U.S. economy would expand by 5% in the first quarter of 2010.

But Sonders admitted what really stunned her was the semi-hostile reaction her forecasts received from folks who had bought into the bear case. She didn't offer an explanation for their vehemence, but it sounded like the bears had invested a great deal of emotional and financial capital in their outlook, and they apparently have very little tolerance for opposing views.

Though Sonders expressed genuine sympathy for the millions of Americans who have lost their jobs and/or their homes during this painful recession, it sure didn't sound like the vituperative voices she heard came from folks on the unemployment line.

She was hardly looking at the U.S. economy through rose-colored glasses, as she outlined a portrait of a "square-root" recovery, rising sharply and then flattening out in 2010. Significantly, she said exports could drive a recovery in which consumer spending remained weak for several years.

Unfortunately, it sounds like even a relatively mild, weak recovery may prove deeply disturbing for the sad news bears. 

 
Comments
Rohlman  - Sonders and the Economy   |2009-09-30 05:27:44
Liz Ann Sonders has been remarkably correct in her forecast for the US economy. While average CFP's and advisors are still wallowing in the unemployment numbers, foreclosure rates and low interest rates, she has studied previous recessions. Perfhaps advisors are hoping a stronger recovery will bail out the underwater portfolios.

The advisors need to stick with advising their clients regarding the advantages of ROTH conversions, estate planning,refinancing and the basics of financial planning. It is in these areas that an advisor can truly add value for a client.
www.sonatacapital.blogspot.com
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