talks of recession
I don't why so many economist-s enjoy the thought of recession so much. Sample these...
(Aug-05) NYT quotes:
David A. Rosenberg, an economist at Merrill Lynch, puts the chance of a recession at up to 40 percent, twice his estimate at the start of the year. He, too, mentioned the housing market — toward the end of a long list.
“We have an inverted yield curve, a negative savings rate, six-year-high industry operating rate, multiyear-high commodity prices, cycle-high profit margins, uncomfortably high unsold inventories of both homes and autos, and a peaking-out in housing starts — all classic late-cycle developments,” he said in a note to investors.
While, on the other hand:
John K. Lynch, chief market analyst at Evergreen Investments, plays down some of the risk factors. For instance, he finds the inversion of the yield curve less critical than the fact that inflation-adjusted short-term interest rates, close to 3 percent, are roughly two percentage points below the level that often prevails when recessions start.
He is banking on the Fed’s ability to hit the brakes gently enough to keep the economy moving ahead, but Mr. Rosenberg is skeptical.
“Be wary of the pundits telling you how great soft landings are,” he wrote. “They hardly ever happen. The odds of a soft landing after a Fed tightening cycle inverted the entire yield curve are slim.”
(Aug - 07) But, the One handed Economist, Paul Krugman, brings his own set of statistics:
These are the dog days of summer, but there’s a chill in the air. Suddenly — really just in the last few weeks — people have starting talking seriously about a possible recession. And it’s not just economists who seem worried. Goldman Sachs recently reported that the confidence of chief executives at major corporations has plunged; a clear majority of C.E.O.’s now say that conditions in the world economy, and the U.S. economy in particular, are worsening rather than improving.
Signs of a deflating housing bubble began appearing a year ago, but for a while it was possible to argue that eliminating a bit of “froth” in the housing market wouldn’t do the overall economy much harm. Now, for the first time, problems in the housing market are starting to seriously reduce economic growth: the latest G.D.P. data show real residential investment falling at an accelerating pace. The latest job numbers show falling employment in home construction, and retail employment has fallen over the past year, suggesting that consumer spending is running out of steam. (Gas at $3 a gallon doesn’t help, either.)
(Aug-05) NYT quotes:
David A. Rosenberg, an economist at Merrill Lynch, puts the chance of a recession at up to 40 percent, twice his estimate at the start of the year. He, too, mentioned the housing market — toward the end of a long list.
“We have an inverted yield curve, a negative savings rate, six-year-high industry operating rate, multiyear-high commodity prices, cycle-high profit margins, uncomfortably high unsold inventories of both homes and autos, and a peaking-out in housing starts — all classic late-cycle developments,” he said in a note to investors.
While, on the other hand:
John K. Lynch, chief market analyst at Evergreen Investments, plays down some of the risk factors. For instance, he finds the inversion of the yield curve less critical than the fact that inflation-adjusted short-term interest rates, close to 3 percent, are roughly two percentage points below the level that often prevails when recessions start.
He is banking on the Fed’s ability to hit the brakes gently enough to keep the economy moving ahead, but Mr. Rosenberg is skeptical.
“Be wary of the pundits telling you how great soft landings are,” he wrote. “They hardly ever happen. The odds of a soft landing after a Fed tightening cycle inverted the entire yield curve are slim.”
(Aug - 07) But, the One handed Economist, Paul Krugman, brings his own set of statistics:
These are the dog days of summer, but there’s a chill in the air. Suddenly — really just in the last few weeks — people have starting talking seriously about a possible recession. And it’s not just economists who seem worried. Goldman Sachs recently reported that the confidence of chief executives at major corporations has plunged; a clear majority of C.E.O.’s now say that conditions in the world economy, and the U.S. economy in particular, are worsening rather than improving.
Signs of a deflating housing bubble began appearing a year ago, but for a while it was possible to argue that eliminating a bit of “froth” in the housing market wouldn’t do the overall economy much harm. Now, for the first time, problems in the housing market are starting to seriously reduce economic growth: the latest G.D.P. data show real residential investment falling at an accelerating pace. The latest job numbers show falling employment in home construction, and retail employment has fallen over the past year, suggesting that consumer spending is running out of steam. (Gas at $3 a gallon doesn’t help, either.)
posted by g.e. at 6:37 AM
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