So what are the chances that Bush and the National Banks can keep a recession at bay? Just wondering because I'll have to sell my widgets to the Chinese if that happens and they already have a good cheap widgets supplier.
My take is that the past 7 years have been remarkable in that Bush inherited a recession, there was a real chance the housing bubble would burst in 2000, yet we've had a strong economy. Lots of jobs created and new business and capital formation (and that kind of thing). Things were pretty bad in 2000 - you had companies like Enron about to fail, and you had our biggest and oldest companies also failing - AT&T was so old it had a single letter stock symbol, yet was sold off in pieces and is nothing now but a brand name owned by Cingular. Sears is another company with a single letter stock symbol that was on the verge of bankruptcy. There was also MCI/Worldcom. Numerous others. There's a lot of uncertainty right now, though. Tax cuts are going to expire in 2 years, a new president with who-knows-what economic policies will be sworn in a year from now. I think we're already in recession and it may go on for the whole year, perhaps beyond.
yeah but are we talking a tech-bubble, 80's stock or post world war kinda recession? two straights periods on negative economic growth is one thing. soup kitchens and a sharp increase in poverity rates are another.
I heard today that Merryl-Lynch claimed that we're already in the midst of a recession. I don't really know all that much about the economy or if that's relevant in any way, but I thought it was worth posting.
there's a definition to what a recession is though. I believe it's two straight quarters of negative ecomonic performance. all i know is that a strong Canadian dollar and weak exporting enviroment mean bad news for us in the manufacturing part of the country. the plus side is that i can still get great deals on hookers in Buffalo (I kid, i kid).
ok. <div class='quotetop'>QUOTE </div><div class='quotemain'>Canada's economic growth will slow down this year, but will avoid a recession, top economists at Canada's biggest banks agreed Wednesday. TD Bank chief economist Don Drummond, speaking at a forum at the Economic Club of Toronto, is forecasting GDP growth of 1.9 per cent in Canada this year, while Sherry Cooper of BMO Capital Markets is calling for 2.2 per cent — the same as the Bank of Canada predicted in its last economic outlook in October.</div> what's up with that and things don't look too bad based on this: undefined
A recession is technically 2 straight quarters of negative GDP growth. If we're going to see at least 2 straight, and we're in the first of those quarters, it's reasonable to say we're already in a recession. While the tech bubble burst in 2000, it's not particularly a factor today. We have some pretty solid companies that were started and have grown nicely since - facebook, youtube, and even google (growth-wise). As Shape posted recently, there may be more to learn from what happened to Japan when their housing bubble burst. None of the traditional forms of economic stimulus, in any combination, helped their situation. Tax cuts, big spending by govt., lower interest rates, etc. They just had to ride it out.
<div class='quotetop'>QUOTE (shookem @ Jan 23 2008, 12:20 PM) <{POST_SNAPBACK}></div><div class='quotemain'>ok. <div class='quotetop'>QUOTE </div><div class='quotemain'>Canada's economic growth will slow down this year, but will avoid a recession, top economists at Canada's biggest banks agreed Wednesday. TD Bank chief economist Don Drummond, speaking at a forum at the Economic Club of Toronto, is forecasting GDP growth of 1.9 per cent in Canada this year, while Sherry Cooper of BMO Capital Markets is calling for 2.2 per cent — the same as the Bank of Canada predicted in its last economic outlook in October.</div> what's up with that and things don't look too bad based on this: undefined </div> These analysts can say all they want, they're all just cheer leaders who are working off out dated information. I'm sure the Canadian consumer is having a good time because the CDN is strong and you can cross the border and buy American goods at high savings. However, the vendors I deal with are crying about not being able to compete now that the CDN has increased. Wait until they start laying people off in your lumber, auto, machinery and petrochemical sectors. I think the US needs to admit it is in a recession and just let the cycle play out. People will just have to accept living within their means or below their means instead of living above their means and creating unmanageable debt for themselves.
well that sucks. kinda wished i had saved a penny or two now. really, it only means I go from being "poor" to "working three jobs instead of two".
<div class='quotetop'>QUOTE (Denny Crane @ Jan 23 2008, 12:43 PM) <{POST_SNAPBACK}></div><div class='quotemain'>A recession is technically 2 straight quarters of negative GDP growth. If we're going to see at least 2 straight, and we're in the first of those quarters, it's reasonable to say we're already in a recession. While the tech bubble burst in 2000, it's not particularly a factor today. We have some pretty solid companies that were started and have grown nicely since - facebook, youtube, and even google (growth-wise). As Shape posted recently, there may be more to learn from what happened to Japan when their housing bubble burst. None of the traditional forms of economic stimulus, in any combination, helped their situation. Tax cuts, big spending by govt., lower interest rates, etc. They just had to ride it out.</div> I think Japan took over a decade to come out of their recession because of all the manipulating their government tried to do to stimulate their economy. They had 0% interest rate at one point! They probably would have recovered faster if they just let the cycle play itself out.
<div class='quotetop'>QUOTE (shookem @ Jan 23 2008, 12:50 PM) <{POST_SNAPBACK}></div><div class='quotemain'>well that sucks. kinda wished i had saved a penny or two now. really, it only means I go from being "poor" to "working three jobs instead of two".</div> It's only going to suck for people living outside of their means. I have some luxury living friends who are shitting in their pants right now. One guy has $5,000.00 a month in car payments alone, he's an idiot because he thought this economic boom would never end and spent a lot of money on crap he doesn't need.
well, i don't own a home or a car and only have student debt. expect i do a lot of work in the non-profit sector.
At the very least, the economic stimulus will ease some of the suffering of the masses. It's not all bad. I'm not so sure that doing nothing makes recovery happen faster. The problem with the Japanese economy and now ours is that the bubble that burst was based upon real property (real estate) which are hard assets. People tend to have the bulk of their net worth tied up in their homes, and when the home values drop by 50%, it can be quite devastating. Dow is down 260, nasdaq down 76, S&P down 33. In spite of feds cutting interest rates by 3/4 a point yesterday.
<div class='quotetop'>QUOTE (shookem @ Jan 23 2008, 12:08 PM) <{POST_SNAPBACK}></div><div class='quotemain'>there's a definition to what a recession is though. I believe it's two straight quarters of negative ecomonic performance. all i know is that a strong Canadian dollar and weak exporting enviroment mean bad news for us in the manufacturing part of the country. the plus side is that i can still get great deals on hookers in Buffalo (I kid, i kid).</div> That's the general "common definition", more or less. If GDP goes down for two or more quarters. The BEA tells us real (inflation adjusted) GDP grew 4.9% in the 3rd Quarter above the 2nd quarter. Obviously they can't measure the 4th quarter yet, but "by the book, that would mean we couldn't say we're actually in a recession until April at the earliest. Of course, that doesn't mean we wouldn't actually be in a recession, it just means we haven't had time to tabulate the results. Economists typically think this is very imprecise, since the recession could wind up totally undetected if it lasts only a few months, for example. The NBER gets a committee together and tries to figure out exact dates by looking at all sorts of things. I don't look at a recession as something that fundamentally can or should be avoided. The idea of a recession, fundamentally, is related to what sort of economic activity is going on. In any economy, good or bad, some companies and people are making good decisions and some are making bad ones. On average, folks are pretty smart, their assumptions are pretty good, and thus, the winners outweigh the losers. A recession is when changing circumstances lead to otherwise good decisions being bad ones, and an above normal number of bad decisions being made. I think it's pretty clear in this case that there were some bad incentive structures and bad decisions made in the housing market, and that's going to 1) cause losses for folks and 2) require time to readjust things into the right direction. When I look at the economy as a whole, however, I don't see things fundamentally messed up at large much beyond the financial sector. Some things are better than others, but I don't see a disaster in the offing. Stocks will go down, some businesses will suffer but I don't see a widespread disaster in the offing due to obvious economic problems. My bigger fear is that in readjusting, we go overboard in one way or another scaring folks too much, creating too many incentives for bad investments again, or not fixing the ones that were broken in the first place.
<div class='quotetop'>QUOTE (Denny Crane @ Jan 23 2008, 01:03 PM) <{POST_SNAPBACK}></div><div class='quotemain'>At the very least, the economic stimulus will ease some of the suffering of the masses. It's not all bad. I'm not so sure that doing nothing makes recovery happen faster. The problem with the Japanese economy and now ours is that the bubble that burst was based upon real property (real estate) which are hard assets. People tend to have the bulk of their net worth tied up in their homes, and when the home values drop by 50%, it can be quite devastating. Dow is down 260, nasdaq down 76, S&P down 33. In spite of feds cutting interest rates by 3/4 a point yesterday.</div> Exactly and real estate recovery takes longer to rebound from. Plus you have people using their homes like an ATM machine pulling out all the equity in them. The Feds can cut the interest rate all they want, the interest rate is not the problem.
