NEW YORK— While admitting that plotting the course of the nation’s economy can be a dicey proposition, Mary Farrell , managing director & investment strategist, UBS Warburg LLC, nonetheless noted that the industry— and the country— is currently in bear-market territory. However, Farrell did offer some ray of hope with her pronouncement that “the market is considerably undervalued today.” Further good news was forthcoming as she pointed out, during the NYU Investment Conference here, that not only are Americans now more affluent than ever, but their general expectation is to spend considerably more on leisure-time activities as the nation’s economy improves. Joining Farrell at the mid-afternoon session in a not-altogether-bleak assessment of the economy (and the hotel industry’s ensuing fortunes) was Chris Varvares of Macroeconomic Advisers, who said he sees investment spending picking up again now that many of the “economic drags” are behind us. As such, Varvares’ evaluation of the situation was that the country may be in for “a bumpy landing, but no recession.” Rounding out the presentation— moderated by Bjorn Hanson of PricewaterhouseCoopers— was Bernard Baumohl of Time Magazine. As the senior economics editor maintained, “there seems to be a massive tug-of-war going on over the direction of the economy,” with optimistic news service reports following closely on the heels of decidedly negative prognostications. As offered up by Baumohl, calculating just who is providing the most accurate scenario may well hinge on how the following trio of questions facing the (travel and lodging) industry are ultimately answered: • When will U.S. businesses start spending again? • How much will consumers reduce their shopping and travel expenditures? • How quickly will the Federal Reserve Board’s interest-rate cuts take effect?
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