Consumers urged to tighten belts as recession looms

A local finance professor is urging Bronx residents to tighten their belts as the threat of a recession looms."The consumer is at the heart of

THE BRONX - A local finance professor is urging Bronx residents to tighten their belts as the threat of a recession looms.

"The consumer is at the heart of the American economy," says Manhattan College professor Charles Geisst. "Right now, he is not as healthy as he was about a year and a half ago."

Within a few minutes of trading Tuesday, the Dow Jones Industrial Average plummeted 465 points, but rebounded to close at a loss of about 128 points. The rebound was due in no small part to the Federal Reserve's unexpected decision to slash a key interest rate by three-fourths of a percentage point ahead of its rate meeting.

A recession is defined as a decline in economic growth for six months or more. Geisst attributes the situation to the subprime mortgage meltdown.

"[Between about 2001 and 2006], the number of outstanding mortgages doubled," Geisst says. "It was easy money. There were low interest rates, so credit card companies and mortgage lenders made credit available very easily."

Geisst says many people who received the adjustable-rate loans can no longer afford them.

To survive the downturn, Geisst suggests consumers limit their spending, avoid major financial commitments and try to keep up with credit commitments.

advertisement | advertise on News 12

Trending Video

News 12 hit the streets to find out, 1 Word on the Street: Worst Highway in NYC
The incident happened on March 15, inside the 2 VIDEO: Deli Plus Grocery shooting exclusive video
Police say two men were shot while sitting 3 Police: Gunshot victims collide with cab driver while fleeing
Police say a man was found dead inside 4 Police: Man found dead in Soundview Park
Neighborhood Brief for March 26 5 Neighborhood Brief for March 26

advertisement | advertise on News 12

Features

Sorry to interrupt...

Your first 5 are free

Access to News12 is free for Optimum, Comcast®, Time Warner® and Service Electric℠ video customers.

Please enjoy 5 complimentary views to articles, photos, and videos during the next 30 days.

LOGIN SUBSCRIBE