Four of Durham's most seasoned financial experts shared their investment advice in the latest issue. Here, they offer their predictions for how and when the country will pull out of the recession.

To be clear: the views expressed here are the personal opinions of these financial experts and not necessarily those of Durham Magazine.

Bruce W. Knott 
Senior Vice President, Morgan Stanley Smith Barney 
Founding member of The Knott Group 
3511 Shannon Road, Ste. 300 
490-7143 

www.fa.smithbarney.com/theknottgroupsb

"Worldwide, central bankers of developed countries have implemented fiscal and monetary policies to stimulate their respective economies. The magnitude of this stimulusis unprecedented and I think bodes well for global capitalism.Global cooperation is essential to lift the economies damaged by the financial crisis. As consumer sentiment and confidence improve, so may consumer spending, thereby replacing public spending with private spending. This may happen when investors become more comfortable with the new financial regulatory rulesand begin wading back into the investment arena. I think that recovery has started, but it could takethree to fiveyears to repair the damage. Global cooperation could shorten the time, while protectionism may lengthen the time."

Heather Smith Linton 
President, Linton & Associates, PA 
5011 Southpark Drive, Ste. 100 
489-5399
www.lintoncpa.com
"There are so many interrelated aspects of the economy that it is difficult to name just one or two things that need to change. However, I think we will need to see two important things happen before the economy can rebound. First, more jobs need to be created. Second, banks must lend to more qualified small businesses. We have already seen some positive signs including job losses increasing at a decreasing rate, and many individual homeowners with jobs are able to refinance their mortgages at good rates. However, job losses still seem to be outpacing job creation and small business owners are still finding it very difficult to get needed loans from banks. I don’t pretend to have a crystal ball, but my sense is that it will be at least a year before the economy is significantly better."

505 South Duke St.
687-7221
etye@bbandt.com
www.bbt.com

"The economy is quite complete, so there is no singular panacea for inducing its recovery. Rather, it requires a combination of influences, I believe that cheif among these is the aforementioned stabilization of residential housing prices. THe first-time home buyer tax credit of $8,000 has helped, but I believe a more generous credit and the expansion of the program to include a wider population of buyers for a specified period of time would be much more effective in moving the market toward stabilization. Another major factor in the recovery process is consumer confidence. Unfortunately, it is trending downward. The stimulus plan enacted by the government has not generated the lift that was predicted, unemployment continues to rise, and the projected deficit and rapidly increasing national debt are creating intermediate and long term inflation fears. The prospect of a costly national health care plan and pass-through costs associated with a Cap and Trade program further fuel inflation fears. And, of course, it is not just the federal government that is dealing with massive deficits. Local municipalities and state governments across the country are facing severe shortfalls as well. In short, they do not have a revenue problem. They have a spending problem. Consumer confidence would be enhanced by a real commitment by government at all levels to fund needed programs and eliminate wasteful ones. A third significant factor in the recovery process is the ability of the private sector to grow and create new jobs. Lower taxes and a more efficient, streamlined regulatory environment would aid this process immensely. While lowering taxes during a time of government shortfalls may seem counterintuitive, growth in the private sector will reduce unemployment, create a larger tax base and ultimately generate higher revenues than before. It is stability and growth in the private sector that will lead us out of the recession. And finally, I believe that a sensible energy policy would help facilitate this recovery, even if from a more long term perspective. The simple reality is that we have an oil- and gas-based economy. While it is appropriate that we seek out viable alternatives for powering our homes, cars, cities, etc., we cannot change what we are overnight. We need to reduce our dependence on foreign oil. We have the capacity to do this cost effectively and in an environmentally responsible manner within our borders. As we learned last year, $4 for a gallon of gas is not conducive to a robust economy.

"As for when we might expect to see sustained recovery, consumer confidence will largely determine this. While the problems in the residential housing market and related industries are well-documented, other high profile segments (Investment Banks/Brokerage Firms, the Big Three auto makers, and Commercial Banks, among others) are reorganizing and working through this correction cycle. And there is concern that the commercial real estate sector (particularly malls, strip shopping centers, and other retail facilities) will experience gradual softening in the coming months. The severity of the problems in this sector will have a corresponding impact on the timing and pace of the recovery. And I believe that the increasing trend of government intervention into the private sector is troubling and will on balance have a negative impact on productivity, and ultimately, recovery. While we may be nearing the bottom of this economic cycle, I suspect that we may be in an extended trough due to the multitude of challenges we face. We need for our government at all levels to exercise fiscal restraint and work to minimize the tax and regulatory burden on businesses and citizens. Consumer confidence, not only in our markets, but in our government, is essential to sustained recovery. The sooner we achieve this, the sooner we will embark on recovery."

Lisa Yarborough

1414 Raleigh Road, Ste. 100
lisa.yarborough@suntrust.com
www.suntrust.com/wealth; www.suntrust.com/retirement 

"SunTrust's Chief Economist, Gregory Miller, publishes macro-economic forecasts for the United States economy, focusing on trends in interest rates and following economic developments in the metropolitan areas that SunTrust serves. He views businesses investing new capital, new inventory and replacement and upgraded equipment as important factors in the economy's rebound. It is these changes in business spending behavior that re-start production processes. Business contraction -- lack of investment, inventory correction -- is a driving force behind recession. Resumption of businesses spending money to make money is the catalyst for recovery. 

"Refitting old production facilities and expanding to new facilities ultimately creates new permanent, private sector jobs that pay new wages. Those become new income streams, provide resources for households to expand consumer spending and ultimately provide businesses with the incentive to do the next round of cap spending and closes the loop in the virtuous cycle of sustained recovery.

"With some primary economic indicators already in expansion mode and others in pre-recovery mode, Gregory projects that the economy will be expanding by August 2009."