19
POTENTIAL DANGER WARNING - RECESSION
In a prior forecast, the issue of inflation was discussed and is briefly reiterated. Demand Pull
Inflation - The growth of developing countries, in particular China, are competing with the
industrialized countries and are consuming vast quantities of raw materials.
Wages are starting to rise ( consider also strike settlements). As this trend begins to
accelerate, it is very difficult to stop. The Fed Chairman had little options for if interest rates
were raised ( to stop inflationary pressures) it could cause a terrifying collapse of the stock
market. This would cause people to feel poorer which could cause a recession or worse, a
depression. The Fed did raise interest rates and the resulting slowdown seems greater than
anticipated. The Fed faces problems with the possibility of a super bank failing. This would
be unprecedented and there would be a lot of significant unknowns.
Speculative Building - During the last downturn there was excessive speculative building.
Over the next year there are only four known significant projects in the office sector. On Long
Island there others in the planning stages and active development. In New York City there are
numerous projects underway but no known significant speculative projects. When this
becomes the "trend" it could be the signal of the end of the real estate cycle. This doesn't
appear likely during the next year.
BLUEPRINT FOR SUCCESS
1. A tunnel from Brooklyn to New Jersey for both rail and auto. This would provide waterfront
access to the tremendous new super container freighters which have evolved due rapidly
expanding foreign trade. If not, then this business would be lost to the deep water ports of
Halifax, Baltimore, Norfork and Charleston. This would help restore NYC's manufacturing (
down to less than 275,000 jobs from 826,000 in 1969). According to the experts it is cheaper
to dredge the Brooklyn docks and build the tunnel to NJ ( that the Port Authority was mandated
to do in 1921) then to dredge the rock based Kill van Kull.
2. Establishing a site for and then construction a much needed convention center. This could
be the Nassau Coliseum proposal dating to October 1996.
3. A transportation link around the hub called the Nassau Center. Over one milion residents
with the nation's highest median household income ($75,265) and including over 5.5 million
square feet of shopping space, 10 million +/- square feet of office space, Hofstra University,
Nassau Community College, the Nassau Coliseum, Marriot Hotel. This will first be
accomplished by buses and then a planned monorail link (futuristic).
4. More emphasis on tourism & new ideas i.e. Safari trips to Long Island's 12 Light Houses.
