US Double Dip

[DB008]

Here is an interesting article l found on the US;


Second US Recession Could Be Worse Than First

If the economy falls back into recession, as many economists are now warning, the bloodletting could be a lot more painful than the last time around.

Given the tumult of the Great Recession, this may be hard to believe. But the economy is much weaker than it was at the outset of the last recession in December 2007, with most major measures of economic health ”” including jobs, incomes, output and industrial production ”” worse today than they were back then. And growth has been so weak that almost no ground has been recouped, even though a recovery technically started in June 2009.

“It would be disastrous if we entered into a recession at this stage, given that we haven’t yet made up for the last recession,” said Conrad DeQuadros, senior economist at RDQ Economics.

When the last downturn hit, the credit bubble left Americans with lots of fat to cut, but a new one would force families to cut from the bone. Making things worse, policy makers used most of the economic tools at their disposal to combat the last recession, and have few options available.

Still, the numbers are daunting. In the four years since the recession began, the civilian working-age population has grown by about 3 percent. If the economy were healthy, the number of jobs would have grown at least the same amount.

Instead, the number of jobs has shrunk. Today the economy has 5 percent fewer jobs ”” or 6.8 million ”” than it had before the last recession began. The unemployment rate was 5 percent then, compared with 9.1 percent today.

Even those Americans who are working are generally working less; the typical private sector worker has a shorter workweek today than four years ago.

And then we have this too....


No Chance of Default, US Can Print Money: Greenspan

"The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default" said Greenspan on NBC's Meet the Press

We also have some countries in Europe that are on the brink, Spain with very high unemployment, Italy down the toilet and Ireland still struggling. Is there a 'double dip' just around the corner, or is this merely a speed bump?

What are your thoughts???

 

[dhukka]

Is there a 'double dip' just around the corner, or is this merely a speed bump?

What are your thoughts???

Call it a double dip or a new recession, it's doesn't really matter, my thoughts are that the US is possibly already in recession or right on the cusp. There are several economic indicators that point to recession already. Of course no individual indicator in isolation has a perfect track record of predicting recessions. However, taken together there is now what John Hussman refers to as a "syndrome of conditions" that have only been observed immediately prior to or during recessions. From John Hussman's August 8th comment:

Recession Warning, and the Proper Policy Response

Last week, I reviewed the rapidly deteriorating condition of our Recession Warning Composite . While year-over-year GDP growth has dropped to just 1.6% - a rate that has been followed by a new recession in 10 of the 12 times it has occurred since 1950 - I preferred evidence from a wider set of market and economic measures. I noted "we would require only modest deterioration in stock prices and the ISM index to produce serious recession concerns."

With the pixels barely dry on that weekly comment, the ISM reported Monday that its Purchasing Managers Index dropped unexpectedly to 50.9, the slowest pace in two years. That report, coupled with an early slide in the S&P 500, completed the remaining holdouts (conditions 2 and 3) of the Composite. Coupled with the slowdown in year-over-year GDP growth, the composite of economic and financial evidence we presently observe has always and only been associated with ongoing or immediately impending recessions. This is not an opinion or a viewpoint, but a fact of the data. "Always and only" is the Bayesian equivalent of "certainty" (a Bayesian is someone who, vaguely expecting a horse, and glimpsing the tail of a donkey, concludes he has probably seen a mule).

 

[Starcraftmazter]

The way I figure it, 2008 signed the beginning of a depression which will not end until oil is replaced as a fuel. That and most politicians are replaced with more effective models.

 

[davede]

Well revised US GDP figures were released today.


"Gross domestic product climbed at a 1 percent annual rate from April through June, down from a 1.3 percent prior estimate, revised Commerce Department figures showed today in Washington."

source: http://www.bloomberg.com/news/2011-...anded-at-1-annual-pace-in-second-quarter.html

 

[Aussiejeff]

Well revised US GDP figures were released today.


"Gross domestic product climbed at a 1 percent annual rate from April through June, down from a 1.3 percent prior estimate, revised Commerce Department figures showed today in Washington."

source: http://www.bloomberg.com/news/2011-...anded-at-1-annual-pace-in-second-quarter.html

Our Lord & Grand Master Benwankee has spoken in lofty terms of American prosperity for all.

Stocks soar.

Bulls roar.

Bears stampede for their caves.

All's well.

 

[explod]

Yep, and the US guvmint are selling all the nice houses they brought off Fannie Mae and Freddie Mack on behalf of Gods good citizens, and at a good price too, for cents in the dollar.

Lollie pops and bubbles, could be a good day today with the sun shining to take a tram down St Kilda Road and look at all the nice sky scrapers.

Maybe drop in at the Casino.

Sssshudder, golds up.

 

[sptrawler]

The only way the U.S can stop a recession is to talk China into devaluing their currency and make U.S manufactured products more competetive.
The only other option is to let the markets run their natural course and the U.K is a graphic example of what happens then.
China has the upper hand with their low labour costs and massive demand as their poor slowly raise their living standards. That in itself causes a huge self generating consumption, add to that, they have a huge trade surplus and bags of U.S bonds.
It really leaves the U.S in a bad place, no matter which way it turns everything is pointing down.

 

[Aussiejeff]

China has the upper hand with their low labour costs and massive demand as their poor slowly raise their living standards. That in itself causes a huge self generating consumption, add to that, they have a huge trade surplus and bags of U.S bonds.

That huge trade surplus is likely to start shrinking rapidly in the next few years as soaring internal demand in China is already causing the Socialist leadership to reduce exports of various goods like steel, concrete, petroleum products, rice, rare earths etc.

Once they really get into the swing of withholding their cheaper-than-cheap goods and services from export to satisfy internal demand, that is probably going to leave the rest of the planet facing massive price inflation as those vanishing cheap Chinese imports will have to be replaced with much more expensive local products - in some cases there will be no replacement possible as many manufacturing industries have been wiped out in Western societies' headlong rush to acquire wealth and prosperity at the expense of sustainable economies?

Interesting few years ahead indeed....

 

[sptrawler]

That huge trade surplus is likely to start shrinking rapidly in the next few years as soaring internal demand in China is already causing the Socialist leadership to reduce exports of various goods like steel, concrete, petroleum products, rice, rare earths etc.

Once they really get into the swing of withholding their cheaper-than-cheap goods and services from export to satisfy internal demand, that is probably going to leave the rest of the planet facing massive price inflation as those vanishing cheap Chinese imports will have to be replaced with much more expensive local products - in some cases there will be no replacement possible as many manufacturing industries have been wiped out in Western societies' headlong rush to acquire wealth and prosperity at the expense of sustainable economies?

Interesting few years ahead indeed....

Your probably right aussiejeff, the problem with be twofold for us as we will have shut down most of our secondry industry and be an importer. There is no way the small scale secondry manufacturers will survive post carbon tax unless the government introduce an import tax.

 

[Starcraftmazter]

That huge trade surplus is likely to start shrinking rapidly in the next few years as soaring internal demand in China is already causing the Socialist leadership to reduce exports of various goods like steel, concrete, petroleum products, rice, rare earths etc.

I read only recently that Chinese internal demand has been going nowhere slowly in the last several years. Although that may have referred to consumer goods as opposed to industrial output.

But with steel and concrete - that is mostly going into China's fixed investment bubble which will pop very good. Rare Earths - I imagine they simply want to manufacture the high-tech equipment themselves instead of allowing others to do it.

Oil...well that's self-explanatory. Cars....always more cars. But China hasn't exported petroleum anytime recently, surely?

 

[sptrawler]

The only way the U.S can stop a recession is to talk China into devaluing their currency and make U.S manufactured products more competetive.
The only other option is to let the markets run their natural course and the U.K is a graphic example of what happens then.
China has the upper hand with their low labour costs and massive demand as their poor slowly raise their living standards. That in itself causes a huge self generating consumption, add to that, they have a huge trade surplus and bags of U.S bonds.
It really leaves the U.S in a bad place, no matter which way it turns everything is pointing down.

This is going to become very familiar over the next few years in the U.S

http://www.theaustralian.com.au/new...ack-1100-workers/story-e6frg6so-1226127054641