Seattle Bubble Forum Archive

Didn't you hear? The Fed saved everything with a 75bps cut today. Dow up 420 points. Everything is ok now!!

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Relax, President George W. Bush is on top of the situation -



"That's interesting. I hadn't heard that." Feb. 28, when told that some analysts are predicting gasoline could go up to $4 a gallon.

Feldstein was a top economic adviser to Ronald Reagan, but his views often clashed with other administration officials because Feldstein was violently opposed to defecit spending.

We have been in a recession since last year. Although, when I said that last year, I was laughed at.

The market may have breathed a sigh of relief at the latest moves by the Federal Reserve. But a recent survey of chief financial officers gives the Fed failing grades for its oversight of the banks at the heart of the current credit crisis.

In a survey conducted at the CFO Rising conference in Orlando Fla., 69 percent of senior financial executives said the Fed and other regulators should have exercised tighter regulation over banks during the past four years. A similar number—68 percent—said that requiring greater transparency of structured banking products would have a positive effect on the U.S. economy going forward......

.......Overall, the mood at the conference was grim, with several speakers warning of serious economic woes ahead. Particularly striking was this characterization of the current state of affairs by Jerry York, the former finance chief of IBM and Chrysler Corp.: "It's going to be a very bad recession, perhaps the worst I've seen in the 46 years I've been working."

York said that a "perfect storm" of economic calamity has struck. The confluence of negative forces includes rising energy prices, rising commodity prices, credit markets in turmoil, credit losses in which "no one knows where the bottom is," and a housing market in crisis. "We have too many sectors going south all at once, he told the website. What's more, York can't find a silver lining: "I frankly don't see many positive signs right now, we are looking at a really nasty economic situation."
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What I don't understand, being a layman, is who cares if we are officially in a recession or not. If things suck, they suck, regardless of the label.

I guess it gives you an idea of how much things suck in general. If the economy is growing at 15% but I lose my job and lack the skills to find another job that pays as well, then for me it sucks. If economic activity falls 20% one year but I keep my job and get a 3% raise, then for me things are about normal.

The official declaration allows me to frame my own situation compared to everyone elses. If you're a policy maker however, then knowing is important so you can randomly start bailing out the people who have caused the most damage.