Posted on 10/09/2006 4:05:45 PM PDT by GodGunsGuts
Risks of recession continuing to rise
Economy is slowing, showing warning flags
By Will Deener Dallas Morning News
Published October 9, 2006
Excerpt:
A recent Merrill Lynch economic report said that as much as half of the nation's economic growth is related to housing sales, construction and spending from home equity loans.
"The worry here is that a housing decline will have a disproportionate impact on the American consumer," said Gordon B. Fowler, chief investment officer at Glenmede Trust Co., a Philadelphia money management firm.
"Prices went up so much in recent years that now as they come down, it could have a recessionary impact."
Another warning sign is that new-car sales are down about 5 percent from a year ago. This has happened six times over the past 40 years, and in every instance the economy was either lapsing into recession or already in recession.
Perhaps even more troubling is the so-called inversion of the bond yield curve.
Average investors might not understand this issue because it is a bit technical, but market pros place a lot of significance on the difference between short- and long-term U.S. Treasury yields.
Generally, investors demand a higher interest rate yield on, say, a 10-year U.S. Treasury bond than on the shorter-term bonds, to compensate for the risk of higher inflation and interest rates later.
However, in recent months the yields have inverted. The 10-year Treasury note ended the quarter with a yield of 4.63 percent, with the 2-year note slightly higher with a yield of 4.68 percent.
A recession has followed seven out of the last eight times that the yield curve has inverted.
This is not simply coincidence, Stack said.
(Excerpt) Read more at chicagotribune.com ...
Sounds like it's time for another round of tax cuts.
Wow! That was what the newspapers said in 2002 and 2004 also. Particularly in October and November. Imagine that?
and just in time for the elections, too....
Oh whatever.......
My economy is doing great! That's the only one I care about.
That and spending cuts and I think that would be a great idea. Recessions happen. It is a natural part of the business cycle but no sense in bending over and taking one without a fight.
Cut rates back a half point as well.
Thought you guys might be interested. Be sure to read entire article as FR forces you to excerpt Chicago Tribune articles. All the best, GGG
Bull. The Chicago Tribune exists to elect Democrats.
The next GDP report that comes out will be important. If we come in low 2% then it's time to get things going again.
When is this thing supposed to hit?
All I keep hearing is that is going to sometime.......
My area has not had a recession in well over 40 years.
But the negative pushers keep trying to bring it down on us!
With corresponding spending cuts for a change!
The answer is to cut spending on social programs and local governments.
Former Federal Reserve Chairman Alan Greenspan said that last week's rise in weekly mortgage applications could signal that the ``worst may well be over'' for the U.S. housing industry, according to a report of a speech Greenspan gave in Canada on Friday.
Greenspan was referring to an Oc.t 4 report from the Mortgage Bankers Association which showed that mortgage applications rose a seasonally-adjusted 11.9% for the week ending Sept. 29, the largest increase in more than a year. Speaking at a conference in Calgary, [Greenspan] saw this "flattening out" of mortgage activity compared to the steep declines seen in recent months as a good sign, according to a story published Friday by Bloomberg News.
Never fear... It is Nancy Pelosi to the rescue with a nice BIG tax increase to reduce the deficit!!!
OMG! This is, on just about every score, the most healthy economy we've had in a long time. They just have no shame.
The Chicago LibUNE management is just trying to justify the fact that they are losing money daily and the cause has to be the "bad economy." Just more crap from MSM.
It's the end of the world as we know it, and I feel fine.
Recessions occur primarily when no one is expecting them.
Why? Because if everyone is expecting one, they are taking countermeasures. Most of the time, this prevents a recession.
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