Economy......recession???

[NightWatcher]

Are we kidding ourselves?

Gas is near/at record levels, unemplyoment is at the highest level in more than 2 years, the Fed continues to cut rates, the housing market is anemic, the artificially propped up DOW is struggling to stay out of free fall, the euro rose to record levels versus the dollar (1.48 usd= 1 eu)........

The economy is not doing well, folks. I'm not going to lie and say that I never fell asleep during college economics classes, but the dots are connecting to show a very poor picture.


http://www.forbes.com/markets/feeds/afx/2008/01/04/afx4494998.html

DATAWATCH Low Dec job growth numbers point to Fed cut, heighten recession fears

WASHINGTON (Thomson Financial) - Low December job growth numbers have solidified economists' expectations of further Federal Reserve rate cuts and heighten recessionary fears.

Economists are still hesitant to call a recession, but their fears are increasing with today's weak report. Robert Brusca of FAO Economics said, 'I've still got the economy skirting a recession,' but the low private employment numbers 'make me think, gee that looks like a recession.'

According to the report released today by the Department of Labor, the economy added just 18,000 jobs in December, sharply lower than the 70,000 jobs economists polled by Thomson's IFR Markets had expected from the survey of employer payrolls. That's the smallest monthly gain since August 2003, the low point of job creation when the economy lost 42,000 jobs.

[Angela Shelley]

1. Call it a recession, that sounds OK,

the depression will set in when the banks stop sending credit cards in the mail.

[ixion]

2. we'll be very lucky if all we get is a recession

depression is more likely, IMO.

[ProfessorGAC]

3. By Any Sound Statistical Analysis. . .

. . .this is a recessionary economy. Because it doesn't meet the ridiculously (and mathematically unsupportable) definition of recession, then it's not a "recession". But, it's definitely behaving in a recessionary fashion.
The Professor

[Angela Shelley]

4. Thanks Professor, I feel better already.

[NightWatcher]

5. thanks prof.....so without the technical terms, we are still screwed?

is there a better term that will get people to pay attention to what is going on and see that we are in trouble?

I just dont see the Nightly News opening with: FUBAR, the economy blows goat.....

[ProfessorGAC]

7. It's Not Tragic

But, it ain't good either! There is nothing in the data to support fears of depression. But, there is plenty to suggest that no substantial real growth is going to occur any time soon. The economy is being propped up by government spending of borrowed money. One need no advanced education in economics to see this is unsustainable. It's clear and obvious, and is the primary reason 41 was saddled with a recession when the Reagan smoke and mirrors were cleared away.

Screwed may be too strong, but it's not going to be smooth sailing.
The Professor

[Vilis Veritas]

10. I agree...it is way more comical...

I prefer comedy to tragedy any day.

Peace.

[AndyA]

6. And an election during a recession will not be good for the GOP.

Everyone knows this is Bush's economy - and people will remember that when they go to the polls in November.

Of course, the GOP will try to spin it so it's a Democratic problem, and the M$M will no doubt fall in lock step to promote that version, but Americans are smart enough to know better.

Like father, like son, when the last name is Bush = RECESSION/BAD ECONOMY.

[Selatius]

8. The Fed is making inflation even worse by cutting interest rates. There should really be an...

interest rate freeze. The economy isn't doing too well, so you don't raise rates. Conversely, inflation is a terrible problem now due to energy prices, so you really shouldn't drop interest rates further unless you want to make inflation worse for consumers. The only reason to drop interest rates is to shield big banks from further damage inflicted by a housing bubble that exploded last year and is still exploding.

If the Repubs believe in the free market, let the free market discipline the banks that loaned out money recklessly instead of distorting the markets.

[liberal N proud]

9. Inflation + Recession = Depression

It is only a matter of time.

[ProfessorGAC]

11. Sorry, But No

There is no correlation between those three. There is a correlation between inflation and recession, but they are not interactive. Having the first two does NOT lead to depression, as a fact. Nor is it a matter of time.

You can have your opinion, of course. But, expressing it as a mathematical equation indicates fact. There is no data to support such an inevitability.
The Professor

[BrotherBuzz]

12. "They" can't call it a recession until it's a full blown out depression.

It's an election year, don't you know?

[spanone]

13. the katrina economy is about to make landfall

[flashl]

14. What is the hidden message in this story?

Fed discount window borrowing largest since 9/11

NEW YORK, Jan 3 (Reuters) - U.S. banks' direct borrowings from the Federal Reserve for the week ended Wednesday surged to the largest amount since the week shortly after the Sept 11, 2001 attacks, data from the U.S. central bank showed on Thursday.

Banks not trusting banks?