Btw, here is your H3. Jan 08, we are gonna have some fun. http://www.federalreserve.gov/releases/h3/Current/
Posted on 02/05/2008 9:05:16 PM PST by Freedom_Is_Not_Free
NEW YORK (CNNMoney.com) -- A growing number of top economists believe that the U.S. economy has now toppled into recession.
Alarm bells were set off Tuesday by a grim report on service businesses, which make up the majority of the U.S. economy.
The Institute of Supply Management said that activity in the service sector declined for the first time in nearly five years. This report also indicated that employers are cutting staff.
The survey covers the retail, transportation and health care industries as well as hard hit areas such as finance, real estate and construction.
Some economists argued that the normally low-profile ISM services reading, coupled with the government's report Friday showing the first monthly net loss in jobs in more than four years, is proof that recession is now a reality.
"My forecast had been that the recession would begin this quarter, but the hard data wasn't there yet," said Keith Hembre, chief economist of First American Funds. "But now we're seeing that. The service sector is a much larger component of the economy [than manufacturing] and this is very much a recession reading."
The National Bureau of Economic Research is the official arbiter of whether the economy has entered recession. But the NBER typically does not declare a recession until well after one has begun.
(Excerpt) Read more at money.cnn.com ...
I just HATE quoting CNN. They lie like hell. But sometimes, all they need is the truth to advance their agenda...
Wow! And just in time for an election. It’s funny how we are in a recession every 4 years.........
We are - pretty much no doubt about it now.
Bush refused to do anything about gas prices and it finally killed off the consumer. And Bush created the ethanol boondoggle to pretend to do something about gas prices and ended up doubling food prices.
And the Demoncrats are calling for: 1. Tax Increases 2. Carbon Taxes 3. Mandatory Health Insurance 4. More regulation of banks and lenders 5. Litigation against the phone companies 6. More government spending.
Gee, wonder how those things will affect an already slow economy....
http://www.clevelandfed.org/research/Policy/fedfunds/index.cfm
In order to have a recession you have to have two quarter of negative growth. Have we gone through two quarters yet??
Well, the terms and conditions of those investments including getting rid of the conservative wing of the Republican party.
Heard about the subprime mess lately? Heard from any Conservative polititians lately?
Recession is here.
McCain is winning.
Coincidence? I don’t think so!
< / Craig Ferguson>
oh boy doom at last
NOPE.
CNN= Commie News Network or Commie Nonsense Network.
I consider this a period of “slowdown” rather than a recession. A time for economic readjustment. In an economy such as ours, a slowdown is common, and something wished for.
Looks to me like CNN is attempting to be the first on their block to declare a recession. Institute of Supply Management as their source stating their business is slowed is like saying truck freight is down so there is a recession.
I’ll wait for a more qualified resource to tell me all the facts.
Unfortunately the Fed seems to be making things worse at this point by not forcing all the outstanding debt to be resolved. If they wanted a short recession they should have left interest rates relatively high to shake out the credit market.
Credit is a wonderful thing if it’s used right. It shouldn’t be used to buy a vacation or a Hummer or anything else that doesn’t have the potential to have a greater return.
Which economists did they quote in the article?
January was definitely a slowdown, but until we have several more months like this, it does not qualify as a recession. Officially we won’t know until July, but we do have the start of a recession. Perhaps the heavy cuts by the fed will prevent it.
Wouldn’t hurt if CNN was honest enough to say the ISM numbers were the lowest since March of 2003. Gee, March of 2003, hmmmmm, what happened then.... Oh yeah, a huge stock market rally started then, and all...
CNN took the date out on purpose, as the date has been properly posted in all the articles discussing this today.
What nobody will tell you, is that we currently have 7.5t in M2 money supply, more than 43% more in cash, than 10/2001. If you don’t think low interest earning 7.5t is going to make a positive impact on our economy, I don’t know what the heck to tell you, other than say “goodnight moon”.
Gnight Moon!
Bush would be smart, to say, we are in a recesssion. Two things would happen, everyone would argue against him, and we would instead start talking about getting out of it, instead of whether we are or are not in one.
7.5t dollars is ready to pour out of banks, and into the global financial markets. Nobody loves bank rates at 2 or 3%, the fed move if anything might overdo it. But hey, I’m not complaining, I’m on the front lines of dissemination, and I’m licking my chops.
You need two consecutive quarters of negative growth for a recession. We have yet to have one.
IF it is a recession, that is if the numbers stay low and the indicator stays below the 50 mark, we won't really know until April.
I wouldn't go out and buy any homebuilder or banking stocks just yet though. i.e. Last weeks sucker ralley
Have we had two consecutive quarters of declining growth?
If not, then no recession.
2006 and 2008.
facts be damned, buy gold, head for the hills, and watch that H3.
Thank you. We have not even had one quarter negative.
And I'm sick of this fuel prices is the cause crap. Fuel prices were also this high through much of 2006 and the sky didn't fall then either.
Historically, every election cycle produces at least a quarter of decline, followed by a sharp positive jump in the economy.
Good. Couldn’t come any sooner.
Btw, here is your H3. Jan 08, we are gonna have some fun. http://www.federalreserve.gov/releases/h3/Current/
The last time, NBER called the recession AFTER they later decided it was already over.
A recession is based on two consecutive quarters with a contraction in gross domestic product. We have not yet had a single quarter with a contraction in GDP. That is not to say that we will not, but factory orders are up, and manufacturing companies are catching a considerable export tailwind.
A recession is by no means a foregone conclusion.
I’m not an economist but I think the best stimulus would be to cut the corporate income tax by 10 percent.
Keith Hembre, chief economist of First American Funds
Gus Faucher, director of macroeconomics for Moody's Economy.com
Economist Bob Brusca of FAO Economics
Have I noticed any change in my daily life? No... but apparently things are much worse than last year? I suppose if you tell enough people this they'll be a little more hesitant to spend and you'll start seeing your recession. Boggles the mind.
Anyways, plenty of "prominent" economists are not forecasting a recession. But of course who wants to listen to them? Doom and gloom is what sells.
http://gregmankiw.blogspot.com/2008/02/interpreting-employment-report.html
The probability of a recession actually dropped from December.
Every major bank save Merril Lynch posted a LARGE profit from last year and are expecting the same in 2008. Unemployment is low (despite the slight up-tick), core inflation is also low (kept in check by oil prices) and exports have shot up (keep in mind that the exports sector is more than twice as large as the housing sector) as a result of a weak dollar.
We've been due for a correction for a while. But the fundamentals of the economy are still strong, so even if we see some flat growth or slight shrinkage for a while things should be looking pretty good by the end of 2008.
Of course that could all change in a hurry if the wrong person gets in office and cranks up the taxes on the productive/job producing members of our society...
Take it to 0%. What’s the difference.
Is 3% REALLY expensive money right now? It is less than the rate of inflation.
Do you REALLY think that the cost of borrowing is what is preventing the movement of money through the system? Is that what you REALLY think?
If the interst goes to 2.25%, what difference does it make? The liquidity crisis, the insolvency, the write-downs, tightening prime credit, continuing mortgages resets for people who have no equity and therefore cannot refinance, the shell game of toxic ABCP that is still hiding in the shadows, the skyrocketting default rates in mortgages on credit cars and for auto loans, the need of lenders to hoard money to meet reserve requirements in view of catastrophic write-downs, the distrust and downright fear throughout the financial sector.
What do you think a rate of 2.25% will accomplish that 3.0% won’t?
I’ve asked you for an explanation before and received no response. Again, knowing we are in a severe liquidity crisis, how is a bargain lending rate of 3.0% or even 2.25% going to stimulate the economy and MAKE lenders loan money.
Please outline the mechanism that will cause money to re-accelerate, will cause lenders to loan, businesses to expand, and consumers to confidently fill their baskets with expensive junk.
Please explain. I’m all ears.
No, the recession has only just begun. So you will have to wait until August or so, and I’ll be happy to remember to say “I told you so.”
Clinton News Network also. I hate CNN.
Do you believe this slowdown is common.
Are we in a liquidity crisis. Is there a credit crunch? Is that part of a “normal” slowdown? Is it good that even those with good credit are finding it abnormally difficult to obtain a business or home loan?
Recession? Great time to buy expensive stuff
CNN has a political incentive to lie and slander Bush and the Republicans at every opportunity. We can’t possibly know for sure if we are in a recession. As Perdogg state, it requires at least 6 months hindsight to know.
That said, anyone who is paying close attention and studying up on the problems with our economy is going to be very concerned with the short-term and long term GDP growth.
Our economy primarily runs on 2 things: credit and consumption.
The Financials sector is crippled under the strain of a massive liquidity crisis. They have been surprised by massive losses in what were supposed to be AAA rated investments. We are talking Treasury Bond safe investment vehicles. Huge losses have made them far more cautious and picky who they lend to. They have less to lend to because they have to hoard what money they can find to meet minimum reserve requirements of money mandated by law.
Consumers have been on a credit buying binge for over 10 years. I mean MASSIVE consumption built on debt. That rapidly growing consumer debt was simply not sustainable. Get a credit card, fill it, get another, fill it, repeat. How long can you go before the house of cards falls apart. You can kite your debt for a while, but not forever.
The party is over. Money is not moving very well despite huge recent rate cuts by the FED. Of course it takes some 6 months for the effect of rate cuts to show up in GDP, but those rate cuts should be accelerating the velocity of money. They are not. Lenders are continuing to contract lending, not expand lending.
Consumers are falling off a cliff.
Do the math. CNN is an evil propaganda arm of the Clinton Mafia, but sometimes the Republicans give them a golden nugget of truth to be able to push their evil agenda. They didn’t manufacture this recession, they are just making hay off it. It is a gift from the Republicans for pushing the pain of a recession right to the doorstep of a presidential election.
They are having the best of luck and we are going to end up with Hitlery or Osama for President. I hate that.
Good post.
As a matter of definition, the economy is in a recession for some time before it can officially declared to be in one.
Yeah, you’re probably right.
“My forecast had been that the recession would begin this quarter, but the hard data wasn’t there yet,” said Keith Hembre, chief economist of First American Funds. “But now we’re seeing that. The service sector is a much larger component of the economy [than manufacturing] and this is very much a recession reading.”
“We’re definitely seeing conditions spread to more parts of the economy. The big drop in business activity, that’s a huge red flag,” said Gus Faucher, director of macroeconomics for Moody’s Economy.com.
Faucher said his firm now believes the economy is in a recession but he believes it’s possible that growth will resume in the second half of this year.
Economist Bob Brusca of FAO Economics said he doubted that the U.S. was in recession a week ago, but now he believes there’s about a 75% chance that a recession began in January.
“That’s what recessions do. They come upon you all of a sudden,” he said. “When you look back at history, you’re struck by how even-keel it is until the bottom just falls out.”
**********************************************************
I don’t doubt CNN would cherry-pick their sources to get the result they want. But I have been reading far, far more sources that just idiotic CNN and the term “recession” was very sparse until late, late last year and is getting to be used fairly commonly now.
I hate citing CNN but FREEREPUBLIC is a big part of the problem. I can’t post a blog under “business & economy” here. This website won’t let me. And nobody here every looks in the “blogs” category, so there is no way to get this information out and posted here in “Business and Economy” than to find an actual news source.
Many of these stories are generated by a blog or generated by AP and posted to a blog, and then CNN picks it up because it serves their evil agenda. To some extent I hate posting these, because I know I am helping CNN with their evil agenda just by giving these stories exposure.
At the same time, if I can wake up some FREEPERS to the reality of the current economy, so they don’t go in debt and don’t put themselves and families at financial risk of downturn, then I’ll keep on posting these stories.
The reason I post these stories is 30% my own immaturity to say “see I told you the economy was in serious trouble.” Yes, that’s immature of me.
But 70% of my reason is to say, “wake up and clean up your finances. Don’t get caught in bad shape if things go bad.”
I wouldn’t want to be hurt in a financial downturn. I don’t want to see anybody else hurt in a financial downturn. Well, except greedy pigs. I want them to be hurt bad.
I’m no financial genius. You have financial experience.
Are we starting a recession?
Is there a real liquidity crisis?
Are the FED rate cuts going to help significantly, or do we have to wait for the credit crunch to run its own course?
Do you see consumers pulling back and having less credit to waste, or do you see consumers shopping until they drop?
Who has the 7.5 trillion to lend? Who is going to lend it?
Credit is tightening. When do you see lenders loosening credit again?
The spending spree is over. And we’re not even 1/4 into the bursting of the housing bubble.
Boom and bust times are always dependent on psychological factors such as consumer confidence. If not, if people bothered to see how deeply encumbered in debt they are, we likely would not have had the housing bubble or the post 9/11 bull markets.
Psychology works both ways. It can scare people into saving money which hurts economic growth, causing recessions. But it can also cause people who are tapped out to the maximum of their credit limits to get one more credit card or to refinance the house just one more time, because, heck! the economy is fine. Let the good times roll.
The government has been TALKING UP the economy since Reagan, trying to encourage people to spend their income faster than they get it — hence deep debt for so many people who live a lifetime in debt and NEVER get out of it.
Psychology cuts both ways.
FWIW, most economists are saying “no recession yet, may not happen.” But look how fast things have changed. Last Thankdgiving it was “recession very much unlikely”. Christmas it was “recession, not too likely.” Today it is, “wow! a recession is a very real possibility but not a done deal.”
Remind me to post to you next month when it is “holy #$T@, looks like recession.”
Things have changed THAT FAST since October 2007. We’ve gone from “no problemo” to “look out Ethel!” in just 3 months.
The significance of this artice is that NO NONE NADA ZIP economists were saying we were in a recession, and just now we are starting to see a few who are saying the recession has begun.
Yes, this could end up being Liberal Commie tripe to influence voters. But when you do the math with the liquidity crisis and the level of consumer debt and defaults, foreclosures, etc. You do the math. What do you think?
You say the fundamentals of the economy are strong? Care to list them? Or are you talking about LAGGING indicators like unemployment?
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