US economy may be sliding back towards recession, Wall Street fears

[alp227]

Source: The Guardian

Shares fell heavily on Wall Street on Wednesday after a gloomy report from US factories and signs of a slowdown in employment growth prompted fears that the recovery in the world's biggest economy is fading.

With weaker than expected data from Europe and China adding to the downbeat mood, the Dow Jones industrial average lost almost 200 points in morning trading in New York.

Selling was initially triggered by the monthly health check on private sector job creation which showed a rise of only 38,000 last month, well down on the 177,000 jump recorded in April. Economists immediately scaled back their forecasts of a hefty increase in employment in Friday's non-farm payrolls report to between 100,000 and 120,000. The decline in the Dow intensified with the release of the index on manufacturing from the Institute for Supply Management, which recorded a drop from 60.4 in April to 53.5, its lowest level since September 2009 and far lower than Wall Street had anticipated.

On the foreign exchanges, the dollar fell against the euro and the Swiss franc on anticipation that the Federal Reserve, the US central bank, would hold interest rates close to zero until the second half of 2012. The yield on the benchmark 10-year treasury bill dipped below 3% for the first time since late 2010 as analysts pushed back their forecasts of when monetary policy would be tightened. Some predicted a third bout of quantitative easing – money creation – from the Fed.

Read more: http://www.guardian.co.uk/business/2011/jun/01/us-economic-recovery-reversing-fears

[PDJane]

1. Since wall street has been doing everything in it's power

To help the economy get there, yeahhhhhhhh..........

[dixiegrrrrl]

2. How can you slide*backwards* from a depression into a recession?

Every year since 2008, there have been MSM news stories implying:
there is no depression
we are in a recovery
we may slide *from* the non-existent recovery into "another" recession

then there was all the hoopla about ..yes or no....a double dip recession, again implying a recovery.
Meanwhile, for some truth, see this unemployment map as it moves from Jan. 2007 to Feb. 2011..
the truth is plainly there to see.

http://www.latoyaegwuekwe.com/geographyofarecession.html

[Luciferous]

22. Exactly. Thanks for the link to the map.

[dixiegrrrrl]

24. That map is scary. Even more scary is the thought how it will look in a few more months.

[MichiganVote]

3. like they care

[MrTriumph]

4. We in small business called this one back in April with high gas prices.

Wall Street was slow to see this coming? No surprise there given their awful track record.

[sofa king]

5. Meaning, "Wall Street hopes."

Because a slide deeper into depression is about the only thing that's going to save them in 2012.

Recall that they made one to order for George Bush in 2000. They called it, "the Clinton Recession."

[andym]

6. Needed a bigger stimulus-- not budget cutting

The ideological economics of the GOP will lead this country to disaster. USA needed to wait to cut budget deficits when the country is in a strong recovery. It's a good idea to take care of long-term debt problems, but not during a tepid recovery.

[abelenkpe]

12. +1000 nt

[No Elephants]

18. We needed jobs programs.

[kiranon]

23. Agree. But Republicans will never get it. n/t

[harun]

26. Republican politicians or Republican voters?

Because where I sit Republican politicians get it just fine. Their masters the super rich have gained more influence and power thanks to them. Republican voters on the other hand, many of whom are the poor and oppressed that are sacrificed for the sake of their masters, will NEVER get it. They seem determined to protect the hand that is killing them all the way to the grave.

[PurityOfEssence]

29. and not a President who's proud that 90% of the stimulus went through private hands

Our President, like Bill Clinton, will never get it: no matter what appeasement they try, the reactionaries will always hate them. Not only is this misguided consensus building idiotic, it also betrays the right-of-center corporatism of both. Whether they sincerely feel this is a necessary evil, or are true believers themselves is less and less open to debate.

The very idea of thinking you're going to sway enemies like these by proudly decreasing the amount of the stimulus, then frittering it away in tax cuts and topping it off by triumphantly stating the great economic virtue of having 90% of it flow through the private sector is a legendary blunder. Even with all that bootlicking for approval, they still call him a socialist.

Meanwhile, the country fails.

This is all deplorable, and it just goes on and on.

[sulphurdunn]

7. The people at the very top

of the financial heap are virtually immune to economic cycles now. They can loose a two digit percentage of their incomes and not break a sweat. Besides, the peons will absorb the loss. An economic recovery would just increase employment and demand. It would empower the people. Why would they want that?

[harun]

9. Correct, they want a big pool of unemployed so they can get cheaper labor and it keeps

inflation low.

They being the super rich, big Corp's and elite.

[AndyTiedye]

15. I Think Some of them are Betting on a Crash

Suppose the people who bankroll the Teabaggers are betting on a crash.
Short sales and "put" options are the traditional ways to do that,
and there surely must be others now.

It would be a pretty safe bet since their control of the House
puts them in a position to make it happen, and they even know when.

[Stumbler]

16. Yep.

[Amonester]

19. Yep. The "supply side" is doing terrific... The "demand side," however...

No shortages of "new products" up for sale.

The demand may be there, but in dreams only.

The stuff they make stays on the shelves...

"BRight minds" should have known better...

[nichomachus]

8. Remember that these are the same people

Who didn't know we were in a housing bubble back in 2004.

[Fool Count]

10. Oh, no, stop the presses. Wait, no, start the presses.

Quantitative Easing Part Trois, here it comes. Kiss your dollar savings bye-bye, folks. Gimme some gold, baby.

[abelenkpe]

11. Doubt that will happen as there have been many reports

pretty much saying that QE 3 is not going to occur.

QE was propping up the stock market and fueling the rising prices in food, energy/commodities.

[Fool Count]

13. Oh, it will occur. You can take that to the bank.

What else are they gonna do? Implement a real structural reform of the economy? Tax the rich? Regulate the banks?
Repeal the free-trade agreements? Stop off-shoring of jobs? Invest in infrastructure and education? Enact real
single-payer healthcare? The answer is none of the above. QE3 is the only weapon they have and they will use it.
Count on it. Say hello to $6 gas.

[Psephos]

17. You said it all. n/t

[abelenkpe]

25. If the US defaults by not raising the debt ceiling

you can throw free trade agreements out the window. The whole global economy will go into freak out mode if that happens.

[LetTimmySmoke]

14. Hey Wall Street banks - stop telling your clients to offshore all the jobs

That might help.

[Vidar]

20. More truthfully, we never succeeded in emerging from our first depression

of the 21st century.

[buckrogers1965]

21. I told you the reports of a great economy were being faked.

This is the real picture. Look at housing. Actually look at who is getting hired and who is just dropping off the end of their unemployment compensation.

The picture looks grim. Worse than the Great Depression right now, and poised to plunge down even further. If other countries start defaulting, that will spread around the world in just a few weeks.

[totodeinhere]

27. If we do slide back into a recession, especially a deep one, I wonder whom the voters in the next

election would blame for it. They say that voters vote their pocketbooks. Would they be smart enough to know that one of the main problems is obstruction on the part of congressional Republicans, or since Obama is in the White House would they blame him? Frankly I don't have much respect for the intelligence of the average American voter, and that's why I am worried. I wouldn't put it past the GOP to try to intentionally sabotage the economy just in order to score political points. We know that they are capable of trying anything, and they won't mind stooping down into the gutter if they think it will get them votes.

[JackRiddler]

28. "Sliding back." Must be time for another bailout down their maw.

Maybe this time they'll start lending!