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Jack Welch: Economy Now Bottoming Out

By    |   Friday, 17 Apr 2009 10:42 AM

Jack Welch: Economy Now Bottoming Out

Management guru and the former chief executive officer of GE Jack Welch believes the fear factor is receding from the stock market, as that it is starting to look like the U.S. economy is showing signs of bottoming out.

It is still tough to accurately predict where trends will go from here, the former CEO told CNBC.

"In general … business is pretty flat," Welch told the network.

But "without question" investors are no longer scared things will go from bad to worse, Welch said.

The current investment climate is ideal for banks, which can borrow money cheaply and lend it at high rates, said Welch.

The former GE CEO reckons financial institutions' conduct during the crisis has been normal, despite an avalanche of criticism from the Obama administration and other critics.

"They were fighting for their lives, and I think they're doing the right thing," Welch said.

The recent gains on Wall Street have are primarily about bargain hunting, he said. "I think stocks were oversold and as the economy flattened, you saw these incredible bargains," Welch said.

Welch said nobody knows whether stocks are likely to retest their November lows. "Listen, if you know, you tell me," said Welch.

Record-high deficits and the current administration flooding the economy with liquidity are confusing for investors, adding uncertainty when clarity and simplicity is required, Welch said.

Others agree.

"The president sees continued trouble for the economy and says only his economic plan can end it. Actually, the recession will soon be over, almost no matter what government does," according to an editorial in Investor's Business Daily.

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Jack Welch: Economy Now Bottoming OutManagement guru and the former chief executive officer of GE Jack Welch believes the fear factor is receding from the stock market, as that it is starting to look like the U.S. economy is showing signs of bottoming out.It is still tough...
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Friday, 17 Apr 2009 10:42 AM
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