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Q3 2011 Economic Update

US & World Economy-

The US economy, along with much of the world, has been experiencing an easing in the pace of recovery growth. This is common in post-recession rebounds and usually lasts 4-6 months unless accompanied by tightening from the Fed (fortunately, the US Fed is still very accommodating with low short-term interest rates). Recoveries are usually uneven. Our housing market and bank lending industry are the largest laggers inside the country and euro-zone sovereign debt crisis along with China’s inflation/growth fight are the current biggest international concerns. Nevertheless, we continue to slowly grow and the S&P 500 is expected to earn a record $100 per share this year for the first time. California businesses are also recovering and many valuations are back to or nearing all time highs as well.

Third Quarter 2011 Newsletter