NEW YORK (
head of research Larry Kantor said not to expect a double dip recession to happen any time soon.
During a breakfast meeting held in New York Kantor said he estimates world-wide economic activity is likely going to start showing significant recovery in 2011.
"Recessions are corrections to excessive behavior. For a recession to happen you need something to collapse. It would take some new bad event to get you down again," Kantor said. "We are looking at this slowdown as an economic pause that usually occurs four to six quarters into an economic recovery. The next stage is typically a period of high growth."
The U.S. economy is performing better than the second quarter according to Kantor. Economic expectations have risen and mortgage refinancing has doubled since April. Bond issuance has also picked up.
However, economic growth could be affected by both midterm elections and tax policies. "There are potential risks to the equity market. If the Republicans gain control in the midterm elections there is a better chance at getting dept stabilized, " said Barry Knapp, managing director and head of U.S. equity strategy at Barclays. "Democratic tax cuts could also be a positive catalyst for the equity market."
--Written by Maria Woehr in New York.
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