Reconciling the Spatial Market/Capital Market Gap. (Financial Views)‪.‬

Commentary Going into the fourth quarter of 2002, it was becoming increasingly clear that the transitional economy we had been looking forward to six months earlier would not emerge from the doldrums. As the quarter unfolded, the story reverted to the old adage "much the same," with little prospects for renewed growth. Indeed, the specter of further declines lingered in the background with many adopting a defensive stance. While few were projecting another recession, such downside risk remains a distinct possibility. On a positive note, the election results from across the country suggested that the executive branch might have sufficient backing to get new economic stimuli enacted. Despite some partisan politics in the early going, it looks like some pro-business incentives might emerge from the new Congress. Unfortunately, such initiatives will not be sufficient to rekindle the flames of economic growth. This caveat is especially warranted in light of the malaise that pervades the economy, and the renewed threat of ter rorist activities, and potential for military conflict with Iraq. Indeed, many observers are wondering out loud whether the government can effectively battle economic and terrorist conflicts, especially since both could be waged on our home field.