It seems as though the news cycle this past month has been filled with one bleak story after another. Last week, according to some government figures, BP’s oil leak surpassed all previous spills to become the largest ever in the Gulf of Mexico. Even the lowest estimates say that at least 70 million gallons of oil are now in the Gulf, and the amount continues to climb every day. The long-term environmental effects of the spill are still unclear, but the hardships it has wrought on our region are only too obvious.
Unfortunately, recent predictions about the health of the national economy are not much brighter. Key indicators suggest that the recovery is slowing, and economists fear a double-dip recession. New jobless claims were higher than expected, and the housing sector is suffering now that the homebuyer tax credit has expired. While some politicians are calling for additional stimulus spending, others are concerned about the ballooning deficit. Meanwhile unemployment benefits for millions of laid off workers have ended, and many others fear for the security of their jobs. Consumer confidence has dropped considerably in June meaning consumer spending is likely to remain low in the coming months. Traders watch for every morsel of information, so even seemingly insignificant news can bring a reaction in the stock market. With so much uncertainty, it is more important than ever to focus on the fundamentals to avoid making unwise, impulsive decisions.
With so many gloomy forecasts, I would like to take a moment to consider the positive. As demonstrated time and time again, in Louisiana we know how to weather a storm. We have the resiliency to survive whatever catastrophes come our way and emerge from the wreckage stronger than ever. Historically the economy is cyclical. Eventually it will likely improve, I believe the financial markets will stabilize, and those individuals who followed a disciplined financial strategy will reap the benefits. Hopefully they also will have gained some wisdom and fortitude to withstand the next downturn with even more confidence.