Recession
Good article today by Liz Pulliam on why news (including Seattle Bubble) is not to blame for this recession. One of the more interesting quotes...
By the way, the Feldstein she refers to is National Bureau of Economic Research President Martin Feldstein - he runs the company that decides when we are officially in a recession.
Feldstein went on to predict the worst recession since World War II. Since the economy was actually expanding rapidly during those war years, what he really meant was the worst recession since the Great Depression.
By the way, the Feldstein she refers to is National Bureau of Economic Research President Martin Feldstein - he runs the company that decides when we are officially in a recession.
Comments
Unfortunately, I think this sounds about right. The complacency of the average person, and investor, to what is starting to happen in the credit markets is just astounding. We are seeing one of the greatest credit crunches ever to rear it's head, but so many people (particularly in Seattle) just seem to assume that everything will continue to be peachy.
I don't fall in with the appocalyptic crowd, and fully believe we will come out off this even better than ever. After all, that's what recessions/depressions are for (i.e. to eliminate mal-investment and re-establish the economy on a sound footing). The US has been through depressions before, and always came out the other side the better for it.
Of course, working through the downturn isn't going to be pleasant, and it has become all too obvious that we are far from a bottom. Heavens, the Dow isn't even in bear market territory yet, and unemployment rates are still low.
(Until tomorrow)
Relax, President George W. Bush is on top of the situation -
Recent Bush Quotes on Economy
"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.
Bush elaborated that he had actually heard predictions of $15/gal, but scientist were hard at work on an alternative source of fuel: Chuck Norris' sweat. It is believed by the previous Texas Rangers owner, G. Walker Bush, that the previous Walker Texas Ranger star could alleviate the need for oil. It is well documented that Chuck Norris' sweat serves as a catalyst and helps contain nuclear fusion (the same energy source used in the sun), the problem science needs to solve is making Chuck Norris sweat.
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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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.