Michigan Hanging In There
"But by no means would I call this vibrant. We're just hanging in there," Stapley remarked.
From a revenue standpoint, the state has relied for a long time on the manufacturing sector. In 2000, some 7 percent of all the jobs in
"Forty-nine other states can tell you what you're going to pay, and we can't. That is not promoting job creation in
In the first quarter,
Two weeks ago, private equity company Cerberus Capital Management purchased DaimlerChrysler AF's Chrysler Group, shelling out $7.4 billion for an 80.1 percent stake in the company. Now, Stapley noted, Chrysler is going to have to deal with people that are used to coming in, slashing head count, maximizing free cash flow, doing whatever they can to tightening the company up and sell it off in three to five years.
"Chrysler is going to have to invest $3 (billion) to $5 billion in research and development vehicle design just to keep its pipeline going," he said. "What will they do about Chrysler's $19 billion pension health care liability? This is going to be a total 180-degree change from business as usual in
In the residential real estate market, the data show that most of the loan delinquencies and home foreclosures have occurred either in the Midwest, Louisiana, Mississippi and parts of Texas, although they're beginning to pick up in Florida and California, too. Stapley said the main areas where delinquencies and foreclosures have been up are those areas that have the weakest economies because they're tied into the manufacturing sector.
There's a large supply of homes on the market, which will prolong the downturn, he said. The
The national economy is in a kind of a classical mid-cycle slow down in growth of 1.3 percent. The national unemployment rate needs to get to about 4.7 percent, Stapley said. The overall economy, while slowing, is not in that bad of a shape, and he doesn't foresee a recession in sight.
There is a "rational exuberance" over the comeback of the stock markets — essentially in the case of the Dow, the S&P, and the Russell 1, 2 and 3 indices — and the recovery of the losses investors suffered in the tech bubble crash.