Tuesday, December 16, 2008

AFP Business Outlook Survey Shows Extreme Bearishness

According to the newly released 2009 Association for Financial Professionals (AFP) Business Outlook Survey. Fifty-five percent of the more than 800 financial professionals responding to the survey expect business conditions to continue to weaken during 2009; while 29 percent expect business conditions to remain the same.

Reflecting the weak business outlook, nearly half of financial
professionals (49 percent) expect their organizations to decrease the
number of workers they employ over the next year. This is in addition
to the ninety-two percent of organizations that have taken at least one
defensive action in response to the credit market turmoil. Defensive
actions have included:

● Sixty-five percent of financial professionals report their
organizations have frozen and/or reduced hiring as a result of reduced
access to short-term credit since September.

● More than half (56 percent) have considered or implemented staff
reductions or layoffs.

● Sixty-one percent have reduced capital spending.

Clearly, most AFP members are trend followers reacting to what is happenning in the economy, rather than forecasters basing views on a strong theoretical foundation. Given that Bernanke is flooding the economy with money, the AFP vews are mostly likely much too bearish.

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