Monday, January 21, 2008

The Economy

Some recent comments that outline forecasts for economy and that may serve to slow down the paper industry demand and pricing increases for 2008.

* The economy is at a slowing point with the potential for recession.

* The collapse of the subprime mortgage market not only will cause devaluation of home values, but also has negatively affected consumer spending.

* The team expects the Federal Reserve Board to cut interest rates several times to combat the mortgage issues. The rate cuts could affect inflation and cause the U.S. dollar, already at historic lows, to go lower.

* Energy prices will continue to be extremely volatile. A growing trend toward energy efficiency has not helped to lower energy prices as yet.

* A lively presidential election year with diverse and polarizing candidates may create political instability and hinder business and consumer spending.

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