Posted on 06/27/2008 11:15:35 AM PDT by The_Republican
So much for that second-half rebound.
Truth be told, that was always more of a wish than a serious forecast, happy talk from the Fed and Wall Street desperate to get things back to normal.
It ain't gonna happen. Not this summer. Not this fall. Not even next winter.
This thing's going down, fast and hard. Corporate bankruptcies, bond defaults, bank failures, hedge fund meltdowns and 6 percent unemployment. We're caught in one of those vicious, downward spirals that, once it gets going, is very hard to pull out of.
Only this will be a different kind of recession -- a recession with an overlay of inflation. That combo puts the Federal Reserve in a Catch-22 -- whatever it does to solve one problem only makes the other worse. Emerging from a two-day meeting this week, Fed officials signaled that further recession-fighting rate cuts are unlikely and that their next move will be to raise rates to contain inflationary expectations.
Since last June, we've seen a fairly consistent pattern to the economic mood swings. Every three months or so, there's a round of bad news about housing, followed by warnings of more bank write-offs and then a string of disappointing corporate earnings reports. Eventually, things stabilize and there are hints that the worst may be behind us. Stocks regain some of their lost ground, bonds fall and then -- bam -- the whole cycle starts again.
It was only in November that the Dow had recovered from the panicked summer sell-off and hit a record, just above 14,000. By March, it had fallen below 12,000. By May, it climbed above 13,000. Now it's heading for a new floor at 11,000. Officially, that's bear market territory. We'll be lucky if that's the floor.
(Excerpt) Read more at washingtonpost.com ...
Going to be alot hurt feelings when the oil bubble bursts.
Demand is increasing. Supplies aren’t. I won’t be betting on Oil-Bubble bursting any time soon.
Unfortunately, I agree with you. However, recession with inflation is NOT necessarily bad if it forces the government to address the deficits, the low dollar, drill for oil, and so on.
Hope springs eternal at the WaPo.
I partially agree, but China and India are less likely to handle the increase in cost than we are. It will slice their demand, as well as other 3rd world countries. Prices will come down then, but not way down, and not for the long term.
We are not in a recession.
Oil could go down by half and the long-term uptrend would still be intact. I can't believe that these prices aren't putting a damper on demand in China and India.
I'm going to buy a little at the close today. If a trend is obvious even to writers for the Washington Post, it's probably over.
Of course it's summer and new grads are in the in look for work, however, one statement from the article was that most regional employers stated they would not be hiring and 20% plan on staff reductions soon.
Credit is tight, cost of food and energy and medical is up and the number of foreclosures keep climbing.
It's on it's way.
Of course it's summer and new grads are in the in look for work, however, one statement from the article was that most regional employers stated they would not be hiring and 20% plan on staff reductions soon.
Credit is tight, cost of food and energy and medical is up and the number of foreclosures keep climbing.
It's on its way.
Try the Dow chart now.
1. Cut taxes!
2. Cut government spending.
3. Massively reduce regulation on businesses, especially regulations preventing the expansion of oil and gas supplies.
4. Repeal all minimum wage laws.
One short recession.
Garde la Foi, mes amis! Nous nous sommes les sauveurs de la République! Maintenant et Toujours!
(Keep the Faith, my friends! We are the saviors of the Republic! Now and Forever!)
LonePalm, le Républicain du verre cassé (The Broken Glass Republican)
Agreed.
Businesses are in a ‘holding pattern’ because of government policy proposals (cap and trade) and increasing energy prices.
I call it ‘wait and see’.
It started Aug 2007, when Charlie Rangel proposed a 4%surcharge on high income earners, which are mainly small businesses. (It won’t pay to make too much money at those rates)
Could you post stock prices of other retail chains too for the same time period? I hear the malls in this area sales are down vs. last years at this time.
However, we are going to raise taxes, increase Government spending many folds, pass more regulation in light of housing market collapse, and double the minimum wage in next few years. Then we would top it off with a War with Iran, sending Oil above 200 dollars per barrel, empty out nother 2-3 trillion dollars out of the treasury, and be bogged down in Middle East for 10-15 years. World Economy ravaged, and failed states in every continent creating ripe conditions for evil doers!
Sounds like a Pot of a ‘B’ movie. Would be hilarious if it wasn’t true.
” We are not in a recession.”
In San Diego looking at the stores that my wife has been inventorying especially the number of closeout inventories of closinf stores, the upswing in unemployment, and pay decreasing it’s starting.
When it gets full blown recession is going to be passed by and germinate into a world wide depression with a total bank colapse.
Me and the wife do not entertain out anymore. Me and the wife entertain ourselves at home with a little juice from the grape and a quite evening at the house.
WHICH, is a GOOD thing. :>)))) So bad economic times do have some advantages.
The buzz today is gas prices. Before that, it was the housing bust. Before that it was was mortgage fever. Go back a while and it Y2K. The point is, it’s a waste of time and energy to get caught up in hysteria.
Right now the unemployment rate is 5.5%, which is pretty much full employment. While California’s rate of 6.8% is more than Arizona’s 4.4%, it’s still not a bad rate.
A year ago I was able to quit my job, freeing up a job for another worker, and work full time developing my own web design business. I have seen no downturn in my business. One of my clients, a local group of contractors, recently commissioned complete redesigns of THREE of their websites.
I don’t know ONE person who is out of work, worried about losing his job, or having a business go under.
As for the fuel prices, I know people who have started carpooling, and we consolidate our errands, but so far nobody is getting creamed.
Life is good, and getting better!
Sad but true.
In my case, business this year is better than ever.
I refuse to participate in an economic downturn.
Oil prices are not self-sustaining. This is going to pop, soon.
The days of $0.99/gallon gas are over, though. BUT - the days of $4.00/gallon gas will be over fairly soon, too.
Does this turkey know the definition of a recession?
This is going to go down hard because the Fed has been putting off an evil day of reckoning for a good decade. We have been living off the fat of the land (well internationally generated debt, actually), and have developed so many structural imbalances it will take a long time to work out. The inefficiencies are stupendous resulting from a legal and regulatory nightmare behemoth, a financial system that makes money, not off of investing in the engines of production, but off of pyramiding debt instruments, an automobile industry that is geared up to produce junk, SUVs rather than head to head competition on quality and design, and a lot of babyboomers running the whole place who have never done a productive thing in their lives.
This is not going to sort itself out tomorrow.
What a novel set of ideas. Could it be that this was really what the Founder’s intended and not the big government philosophy we have today? I mean when they wrote that, that thing... the uh, Constituency... uh, no... oh the Constitution, do you think they really MEANT it to be taken seriously???
Long live limited government.
Dittos to that.
The economy grew by 1% last quarter. That's not anything to brag about, but it's surely no a recession. Show me a couple quarters of negative growth, and then we'll talk recession.
I don't really see any serious signs of downturn in Houston, either. In fact, I was downtown last night and it is positively booming.
I'll be leaving the U.S. in just over a week to watch this from afar, but I don't think it's going to come to the fruition that the doom-and-gloomers would like to see.
BUT ! All the talking heads say we are IN One....But then again they 'make' the language....They 'effort' to 'transition' to 'conversate' with folks....
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What would be the effect of curency devaluation? Would that make any difference to anybody?
I thing I have to disagree. Those economies that you mention are manufacturing economies where energy prices are just another input. Remember Japan in the mid-70's to mid-80's? They did quite well during the last period of high-inflation & energy price spikes. Their advantage over our economy in manufacturing is relative. IOW's they will have an advantage over us regardless the price of oil.
I think China & India will pay the price to maintain their level of economic growth. Now, they may paper-over other structural problems in the process like Japan did. Collapse after a long 10-year run.
We are in BOOM times compared to the catah pain era.
LLS
Currency devaluation is ongoing for these past 6 years, at least. That is merely another word for inflation. “Devaluation” is the government announcing the inflation but devaluation is a less scary word.
Only a pollyanna calls what is more obvious each day a source for hysteria. Saying it can’t be so won’t change anything.
This tendency to throw the nation under the bus, just to get a Democrat elected is a strange thing to behold. It’s why I am repulsed to the degree I am, when my own party does it.
Maybe the financial numbers look bad but people are still spending like crazy; the malls are full, the streets congested, and people still eat out for lunch.
Interesting illustration ... dress for success, even in a bomb shelter during a nuclear attack?
They've been saying recession is obvious for a year now. But...
Last quarter's GDP was JUST UPGRADED to 1%....NOT a negative.
I believe that recession ain't happening no matter how much oil hysteria the MSM throws our way.
Considering that those two economies are big exporters and the cost of shipping has skyrocketed in the last two years you find manufacturers leaving those countries and coming back to the U.S., Europe, Canada, etc. Second Japan was many times more efficient in their use of energy in manufacturing than China and India.
Well, of course, you are entitled to your beliefs. Far be it from me to challenge your faith.
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That is probably true. Somebody was on Coast last night with major scare stories of economic collapse including currency devaluation as if that is something that might occur without warning and only gold would be immune.
Hope you're right. I'm a manufacturer's rep & my bottom line would be helped greatly by corporations 'bringing home' manufacturing. Getting tired of all these plants being packaged up & shipped to the Far East with a big bow wrapped around them.
Your box is tiresome.
I’ve been thinking the biggest reason we’ve lost manufacturing jobs is the growing impact of FICA taxes - something foreigners workers don’t have to pay. Although I support private accounts, an alternative would be to junk the entire FICA tax system and have a 5% national sales tax instead. It would level the playing field since U.S. and imports would both pay the same amount.
Kudos to you for keeping up the drumbeat but I’m sick of trying to explain this and getting the same old tired denials from the Freepyannas. They are on their own. I don’t care if they sink anymore. They’ve got it coming. They will be the loudest to cry when things get worse.
You mean from the phony government numbers? Nope. I can’t show you negative growth from the governments phony, doctored numbers. Nope. Can’t to that. I’ll let the government do that for you when the recession gets so bad they can’t hide it anymore.
Yeah, all those conservative Republican government bureaucrats who love to bolster the Bush Administration. They'll make the numbers look better than they actually are so the Democrats won't benefit from a bad economy.
Next time, we can discuss the hordes of evil right-wing career State Department employees pushing the neo-con agenda around the world.
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