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thepeel
Joined: 08 Aug 2004
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 Posted: Mon Jan 07, 2008 10:32 pm Post subject: The recession has begun |
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The U.S. economy is in a recession, David Rosenberg, chief North American economist for Merrill Lynch, wrote in a research note to clients this morning.
"Friday's employment report confirmed our suspicions that the economy was transitioning into an official recession towards the end of last year," Rosenberg wrote.
"At no time in the past 60 years has the unemployment rate risen 60 basis points (50 bps is the actual cutoff) from the cycle low without the economy slipping into recession, and here we now have the jobless rate hitting 5 percent in December vs. the March/07 trough of 4.4 percent."
Rosenberg cited contractions in hours worked and household employment.
"In sum, Friday's employment report strongly suggests that an official recession has arrived. The recession dating committee at the National Bureau of Economic Research (NBER) will be the final arbiters, but since it waits for conclusive evidence, including benchmark revisions, it may be at least two years before we are notified," Rosenberg said in his research note.
Rosenberg's assessment was validated in another Wall Street research note posted this morning. Richard Berner and David Greenlaw, economists for Morgan Stanley, wrote, "Incoming data suggest that tighter credit has pushed the US economy to the brink, and we reiterate our call for a mild U.S. recession in the first half of 2008.
Weak employment data and slowing in export orders reported by purchasing managers undermine the case that a healthy consumer and strong global growth would forestall a downturn. Moreover, the ongoing housing recession is deepening, declines in capital goods bookings hint that business equipment spending will contract, and inventory liquidation seems likely. Our headline growth forecast for 2008 is unchanged at 1.1 percent using year-on-year arithmetic, but that largely reflects a stronger-than-expected 4Q07 � Most of the weakness is concentrated in the first half of the year."
Berger and Greenlaw added, "The key question now is how deep the recession will be and how long it will last. We continue to expect that the downturn will be comparatively mild and short; after all, recessions abroad are unlikely, so global growth will still be a prop; US excesses are modest away from housing, and peaking inflation should give the Fed latitude to ease monetary policy further. However, the slide in job growth hints at near-term downside risks � The bad news, moreover, is that surging energy prices represent an additional threat to such wage gains when adjusted for inflation, and more broadly higher energy quotes threaten real income and spending. Because the recent oil price hikes are more the product of shocks to supply than demand, they will depress global growth and push up inflation." |
http://www.biztimes.com/daily/2008/1/7/key-economist-says-recession-has-begun |
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thepeel
Joined: 08 Aug 2004
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| Posted: Mon Jan 07, 2008 11:46 pm Post subject: |
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Crisis may make 1929 look a 'walk in the park'
As central banks continue to splash their cash over the system, so far to little effect, Ambrose Evans-Pritchard argues that things risk spiralling out of their control
Twenty billion dollars here, $20bn there, and a lush half-trillion from the European Central Bank at give-away rates for Christmas. Buckets of liquidity are being splashed over the North Atlantic banking system, so far with meagre or fleeting effects.
As the credit paralysis stretches through its fifth month, a chorus of economists has begun to warn that the world's central banks are fighting the wrong war, and perhaps risk a policy error of epochal proportions. |
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/23/cccrisis123.xml&CMP=ILC-mostviewedbox |
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thepeel
Joined: 08 Aug 2004
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| Posted: Mon Jan 07, 2008 11:48 pm Post subject: |
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Is Hank Paulson as Bearish as Roubini? And the Looming Political Battle on the Fiscal Policy Stimulus Package
Nouriel Roubini | Jan 08, 2008
Is US Treasury Secretary Hank Paulson becoming as bearish � in his recent speech assessing the financial excesses and the risks to the economy � as yours truly, Nouriel Roubini?
Felix Salmon argues that Paulson effectively is and that Paulson is now in the �2008 recession� camp:
Paulson's Most Bearish Speech Ever
This is I think one of the most bearish speeches by a sitting finance minister I have ever read; I certainly can't recall anything like it from any US Treasury Secretary.
In it, Hank Paulson seems to be channelling Nouriel Roubini. He covers all the points: "unsustainable price appreciation," an "inevitable" housing correction, an "unprecedented wave" of mortgage resets, "market failure"... and all that's just in two consecutive sentences!
And the speech barely lightens up from there. Paulson talks of "excesses" and "turmoil" and "major challenges"; he says that "the price adjustment is not yet complete" in the housing market, and then returns to his theme of "stress and volatility" in the capital markets more broadly, along with the associated "inevitable challenges".
Only at the very end does Paulson attempt a weak stab at bullishness, saying that although "we will likely have further indications of slower growth in the weeks and months ahead," he expects the US economy "to continue to grow".
If I were to take my trading tips from Paulson's speeches, however, this would be a clear indication to me to start going short, just about everything. |
http://www.rgemonitor.com/blog/roubini/236106 |
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cbclark4
Joined: 20 Aug 2006
Location: Masan
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| Posted: Tue Jan 08, 2008 12:20 am Post subject: |
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| HUD auction listing are up. |
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Beeyee
Joined: 29 May 2007
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| Posted: Tue Jan 08, 2008 12:27 am Post subject: |
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| All by design as a pretext to introduce the 'Amero'. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Tue Jan 08, 2008 12:31 am Post subject: |
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No. The "Amero" is decades and decades and decades off from even being discussed in a meaningful way and has fully nothing to do with the poor decisions by central banks over the past 7-9 years that caused successive bubbles.
I'd say the "root cause", beyond the Fed itself, is central bankers and policy makers fear of recession. |
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moosehead
Joined: 05 May 2007
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| Posted: Wed Jan 09, 2008 10:22 pm Post subject: |
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i'm absolutely positive without a doubt sure throwing away billions on an illegal war in not one but TWO countries has absolutely nothing to do with the american economy being flushed down the toilet  |
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thepeel
Joined: 08 Aug 2004
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| Posted: Fri Jan 11, 2008 5:28 am Post subject: |
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| Well, that sure as sh.it didn't help. But the last few leaders of monetary policy have been irresponsible too. |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Fri Jan 11, 2008 3:30 pm Post subject: |
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| Beeyee wrote: |
| All by design as a pretext to introduce the 'Amero'. |
I can pull stuff out of my ass too. |
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Octavius Hite
Joined: 28 Jan 2004
Location: Househunting, looking for a new bunker from which to convert the world to homosexuality.
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| Posted: Fri Jan 11, 2008 6:32 pm Post subject: |
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Wait I'm waiting for is Joo or Gopher or one of our other Bushies to come on here and explain how this is all Bill Clinton's fault, lol.
SO Americans get out and vote and throw everyone of those SOB Republicans right out on their a$$. Eliminate Bush's tax cuts for the billionaires and cut spending and then balance the budget.
And the next time Jesus tells you to vote to protect the phoetus', remember Jesus don't pay your mortgage. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Fri Jan 11, 2008 6:36 pm Post subject: |
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| Octavius Hite wrote: |
Wait I'm waiting for is Joo or Gopher or one of our other Bushies to come on here and explain how this is all Bill Clinton's fault, lol.
SO Americans get out and vote and throw everyone of those SOB Republicans right out on their a$$. Eliminate Bush's tax cuts for the billionaires and cut spending and then balance the budget.
And the next time Jesus tells you to vote to protect the phoetus', remember Jesus don't pay your mortgage. |
Huh? |
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Octavius Hite
Joined: 28 Jan 2004
Location: Househunting, looking for a new bunker from which to convert the world to homosexuality.
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| Posted: Fri Jan 11, 2008 6:48 pm Post subject: |
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Well every time any of us point to the complete screwup this administration has been, particularly with the economy our resident Bushies jump in and blame Bill Clinton (this goes for bin Laden, missile defense, North Korea, etc etc). So I'm just waiting for the shoe to drop on this one.
As for ideas on how to reverse this one, they should undo all the Bush tax cuts, cut military spending and balance the budget. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Fri Jan 11, 2008 6:52 pm Post subject: |
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| Octavius Hite wrote: |
As for ideas on how to reverse this one, they should undo all the Bush tax cuts, cut military spending and balance the budget. |
Ya think? |
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Octavius Hite
Joined: 28 Jan 2004
Location: Househunting, looking for a new bunker from which to convert the world to homosexuality.
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| Posted: Fri Jan 11, 2008 7:05 pm Post subject: |
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| I know. Sound economic policy from the top down works. We've seen this in lots of places (the first that comes to mind is Canada) and its supposed to be the Republican creed but has clearly been lost along the way. |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Sat Jan 12, 2008 4:20 pm Post subject: |
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| Octavius Hite wrote: |
| I know. Sound economic policy from the top down works. We've seen this in lots of places (the first that comes to mind is Canada) and its supposed to be the Republican creed but has clearly been lost along the way. |
Canada did institute tax cuts although I guess they did it after achieving budget surpluses. Cutting taxes when you're running a deficit might not be the soundest idea. |
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