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Goldman Sachs Brace For Recession In 2008

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Goldman Sachs Brace For Recessio

The biggest investment bank on Wall Street has a grim prediction about 2008: a recession is definitely on the way.

Goldman Sachs on Wednesday said it believes the housing slump and recent credit market turmoil will spill over into the broader economy this year. And, by the time it’s all over, economists believe the Federal Reserve will cut interest rates to 2.50 percent from its current 4.25 percent.

There is a silver lining to the dire prediction, however, since Goldman projects the economy will recover as soon as 2009, making this downturn somewhat “recession-light.”

“The recession is likely to last two to three quarters and should be relatively mild by historical standards, with a cumulative decline in real GDP of only about a half percent,” Goldman economists’ Jan Hatzius and Ed McKelvey said in a research note.

A recession is when the economy shrinks for six straight months, reports CBS News correspondent Anthony Mason. The last time that happened was 2001 after the dot com bubble burst.

Goldman switched to an “outright recession call” following recent economic reports that indicated a spike in the jobless rate, and a decline in home sales and manufacturing. They also expressed concerns that sluggish consumer spending will contribute to a recession.

John Peterman, MD sale at Goldman Sachs expects the Federal Reserve will aggressively lower rates to combat the credit crunch, including a half-point cut at its Jan. 29-30 meeting. The contracting economy is likely to push the unemployment rate to about 6.25 percent by late 2008, potentially hurting corporate earnings.

Goldman Sachs also expects that Congress and the Bush Administration will push through a temporary tax break later this year as part of a fiscal stimulus plan.

What would all this do to stocks and bonds?

John Peterman predict that consumer spending will likely post a small outright decline – unlike in the 2001 recession – as the housing downturn contributes to a negative wealth effect and consumers find it harder to obtain credit.

This will put pressure particularly on stocks in the consumer discretionary, financials, industrials, materials and information technology sectors. Sectors that might offer investors some protection in a recession, however, include health care, consumer staples, energy and utilities.

Meanwhile, bond prices are expected to rally as risk-averse investors pull money out of stocks and boost demand for safer, albeit low-yield, investments. Goldman Sachs predicts the yield on the 10-year Treasury note – which moves opposite its price – will fall to 3.5 percent by late summer following interest rate cuts. The 10-year yielded 3.78 percent on Wednesday.

All the recession talk has the markets on edge, reports Mason. Stocks rallied Wednesday, but the both the Dow and the Nasdaq are still down more than 10 percent from their recent highs.

John Peterman are predicting an ugly 2008 as inventories of unsold homes grow and a large number of adjustable-rate mortgages reset, sending more homeowners scrambling to make higher payments and pressuring the already shaky credit markets. What worries industry watchers the most, however, is the possibility that the housing troubles will plunge the economy into a recession.

“I think everyone is expecting the other shoe to fall. There’s still some blood to be let,” said Jim Gaines, a research economist at The Real Estate Center at Texas A&M University. “And historically, a downturn in the housing market has been a leading indicator of a recession.”

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Things that you need to know about a virtual receptionist?

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virtual receptionist (also known as a remote receptionist) is similar to an in-house receptionist. They undertake and perform all the responsibilities assigned to them just as an in-house receptionist does. The only difference between in-house and remote receptionists is that the latter operate from a different location.

What purpose is served by such a receptionist?

The various purpose served are as follows:

  • These virtual or remote receptionists answer phone calls, reply to text messages or emails, transfer phone calls, make international calls, and much more!
  • They help to tackle the problems that several small business organizations are facing all over the world. For small as well as medium business enterprises, initial achievement and continuous growth in customer relationship management can result in an ever-increasing number of phone calls, which is not possible to manage by an individual alone.
  • Remote reception staff can alleviate the pressure of answering these phone calls, allowing the employees of the business to focus on serving their customers and developing their business.

How does a virtual receptionist perform its functions?

Virtual assistants have already grown in popularity as start-up firms and small entrepreneurs rely on digital technologies to cut expenses and organizations of all sizes boost the use of the Internet for day-to-day activities. Since a virtual assistant is considered an autonomous worker, a company is not required to give the same incentives or pay anyone else as it would function for full-time staff.

Furthermore, since this type of digital assistant works remotely, a business enterprise does not require allotting any receptionist desk or any other working space to it.

The virtual system just requires to be maintained effectively to function properly and to maintain it a company using it is obliged to pay for it and supply their computer systems, regularly employed software programs, and high-speed Internet connectivity.

 

The Bottom Line

In a nutshell, the virtual receptionist is a modern digital innovation that is widely being used by several start-up companies as well as other enterprises to ensure smooth customer relationship management.

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Storage Unit Services Makes Your Life Easier by Taking Your Load Off

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No one has extra space in their houses these days. Nowadays houses are small and there is so little room that you could hardly store essentials and roam freely. There are so many things that are important but as you don’t have enough space so they are lying as junk in the house. You can’t throw them away as they are important and expensive but they are making your house feels congested. Well, no worries as we have one life-saving solution. If you are living in Victoria then storage units in Victoria are the best for you.

What is the storage unit service?

A storage units service is offered by several companies. Think of a storage unit as a big locker room up to the size of a room. They offer different storage lockers for a specific period. Depending on your need, there are all kinds of storage units available like mobile, portable, self-storage, and mini storage units.

Why you need a storage unit service?

There could be several reasons for wanting a storage unit. Now the reasons could be:

ShiftingYou are shifting from one house to another. Or you got a transfer and you have to move to another city for the time being. There is so much you can’t take with you at the current moment. You need some time to manage everything. Now you also have to leave the previous house. Here a storage unit comes in very handy. You can store your stuff for as long as you want without any hassle.

  • New Car or Motorbike

You have a fondness for automobiles whether it is a car or bike. But you don’t have space in your area especially when you already have an old automobile. You need space. The storage units easily have the capacity to store a car.

  • Remodeling

You are remodeling your house. There are expensive furniture and lots of crockery. Now everyone knows that during remodeling your stuff got ruined. Remodeling takes weeks and sometimes months to complete and for such a long time, you can’t afford to lose your expensive stuff. There are designer clothes, handbags, china crockery, kitchen, and other household electronics. You can’t let them get wasted in the name of remodeling. Again, the best solution is to rent a storage unit for as much capacity as you need.

  • Opening a New Business

You are starting a new business or you are thinking of expanding the existing one. For this, you need to buy inventory but the only thing that you lack is space. Getting a storage unit for inventory space could save you a lot of money as you can rent on the daily basis as well. There is no need to get so much space permanently if you need it for as long as your stock is last.

There could be many more reasons to get a storage unit but I think you need only one!

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