Panelists See Light at the End of the Tunnel

IRVINE, CA-Christopher Thornberg, principal and founder of Beacon Economics, who has been known lately for being relatively bearish on the economy, called today’s market “vindication for his views,” during his keynote speech at Incisive Media’s RealShare Orange County conference. The sixth-annual event focused on how long and how severe the national economic slowdown will be on the Orange County area, and the consensus among the panelists was that we would be in a slowdown until 2010 at the earliest.

“These are certainly interesting times we are in and we have got some imbalances here,” he said to the more than 200 attendees at the event, held Wednesday at the Hyatt Regency Irvine. “Last year, I said ‘A recession is almost certain,’ and according to the National Bureau of Economic Research, it began in December 2007.” He explained that a recession is an anomaly. “It is a period of time where the economy catches the flu, for all intensive purposes. Forget this ‘two quarters of negative growth’ rule, which confuses the symptoms with the disease,” he said. “A recession is basically when the economy has underperformed, and those sort of situations are temporary.”

Thornberg said what he has seen in the past year has been denial about what is really going on in the economy, and only in the past two to three months, has the public shifted their view from denial to hysteria. “And it’s been so long since we have experienced a downturn this large,” he said, “that the hysteria is widespread.” He urged the public to take a breath, and said the equity markets are like the 13-year-old daughter in the US economy. “They are either in euphoria or despair.”