• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

Recession--Depression??

Do You think the US Economy is Heading into a Recession--or a Depression?

  • No-the Economy is doing Fine

    Votes: 0 0.0%
  • Yes- a mild short Recession

    Votes: 0 0.0%
  • Yes- a prolonged Recession/Depression

    Votes: 0 0.0%
  • Economic Collapse

    Votes: 0 0.0%

  • Total voters
    0

Steve

Well-known member
Tex
Take all your garbage words that you make up and I might answer your questions, steve, if they are really questions for me and not the stuff you put in the post yourself. I think you need to answer your own questions.

haveing a little contorl issue problem again... :roll:

but to pacify your tempermental moods I'll re-phrase it with out the word "evil" and just so you don't get to prissy..I'll even remove "rich"...

but you still haven't explained .. "how more taxes and more regulatory costs of "corporations" will help "American Business" compete?

but honestly I could care less if you answer it.. most liberals can't answer it, because they know that in all honesty more costs in the form of higher taxes and restrictive regulations only helps the import countries such as China...

The only reason I keep asking it is to watch you chase your tail trying to change the subject so you can avoid answering the simple question...... :lol: :lol:
 

Tex

Well-known member
Steve said:
Tex
Take all your garbage words that you make up and I might answer your questions, steve, if they are really questions for me and not the stuff you put in the post yourself. I think you need to answer your own questions.

haveing a little contorl issue problem again... :roll:

but to pacify your tempermental moods I'll re-phrase it with out the word "evil" and just so you don't get to prissy..I'll even remove "rich"...

but you still haven't explained .. "how more taxes and more regulatory costs of "corporations" will help "American Business" compete?

but honestly I could care less if you answer it.. most liberals can't answer it, because they know that in all honesty more costs in the form of higher taxes and restrictive regulations only helps the import countries such as China...

The only reason I keep asking it is to watch you chase your tail trying to change the subject so you can avoid answering the simple question...... :lol: :lol:

If you are talking about competing globally, you really didn't understand the ad valorem tax and tax credits given, compared to the way we tax income, did you?

You really didn't understand the currency manipulation by China do you?

All you can do is take the argument down to "rich evil corporations" being taxed more or less.

If you want to be ignorant about what is going on, you have that right. It worked for president Bush, up to a point.

Please let me know you understand the arguments or stay in the ignorance you seem to admire.
 

MoGal

Well-known member
Actually a wage equalization tariff on imported goods would help American businesses who actually stayed here to produce goods. We can't compete with 45 or 50 cents an hour labor.

Going after businesses who have put their moneys in the Cayman Islands would be a good start (but then Mitt Romney might have to pay some taxes wouldn't he, but then his estate is all in his 2 kids name)........ in addition to all the other scoundrels in washington that talk a good talk but can't walk the walk.
 

Steve

Well-known member
MoGal
Actually a wage equalization tariff on imported goods would help American businesses who actually stayed here to produce goods. We can't compete with 45 or 50 cents an hour labor.

in the past we agreed under the WTO not to add this style of tariffs... (under Clinton I believe but that is a whole other topic)...

I agree that the free trade we have now is not fair trade... but punishing American business (or cororations) will not help Americans compete,.. and that was the point I was trying to get at over the last 13 pages as some on here seem to think "taxing corporations is helpful"... becuase they "feel" as is corporations should pay more then they already do under the law...


Have a Happy Healthy, Wealthy New Year...
 

Steve

Well-known member
Tex
you really didn't understand the ad valorem tax and tax credits given, compared to the way we tax income, did you?

You really didn't understand the currency manipulation by China do you?

All you can do is take the argument down to "rich evil corporations" being taxed more or less.

I actually do understand them...

But in the original post I responded to you wanted corporations to pay as you put it their fair share...

and then you changed the subject when it was proved that they did...not only pay their fair share but in fact they are paying more in taxes then they recieve in services..

you can find all sorts of topics to try to distract from your original comments but I'm not following... if you want to discuss the merits of the other topics feel free to start a tread... I might even agree that vat style taxes are needed or how they crushed the American luxury boat industry and drove it's customers over seas... or how it caused the fall of the American luxury car and allowed an opening for lexus and acura... and other mid sized mid priced imports..

but at least be man enough to admit that taxing corporations will only damage our ability to compete...
 

Tex

Well-known member
Steve said:
Tex
you really didn't understand the ad valorem tax and tax credits given, compared to the way we tax income, did you?

You really didn't understand the currency manipulation by China do you?

All you can do is take the argument down to "rich evil corporations" being taxed more or less.

I actually do understand them...

But in the original post I responded to you wanted corporations to pay as you put it their fair share...

and then you changed the subject when it was proved that they did...not only pay their fair share but in fact they are paying more in taxes then they recieve in services..

you can find all sorts of topics to try to distract from your original comments but I'm not following... if you want to discuss the merits of the other topics feel free to start a tread... I might even agree that vat style taxes are needed or how they crushed the American luxury boat industry and drove it's customers over seas... or how it caused the fall of the American luxury car and allowed an opening for lexus and acura... and other mid sized mid priced imports..

but at least be man enough to admit that taxing corporations will only damage our ability to compete...

None of us ever receive what we pay in taxes, steve. That is why we need a smaller and more efficient government.

I responded to your little "proof" with actual events, not some anonymous quote off the internet.

Then I posted, for you, an individual who was very rich, who even when he was caught, didn't pay the taxes he owed. Regular workers do pay their share and then some (we have an SS surplus right now) before they even get their money. The individual I posted did not, nor did he when he was caught, per the article. He spent a lot of money trying to avoid paying taxes, just as many of the companies and individuals in the well documented article (it even had the methods used in it) that I posted. It might have been too much for you to read and understand.

I even posted to you legislation that was offered to stop the type of off shore accounts and methods used by corporations that reduce their tax liability. Regular Americans pay AMT taxes, why should some tax evading corporations not have their offshore accounts under scrutiny, or at least their depreciation expenses looked at closer? Do you agree with the type of scandals Enron used to avoid paying taxes?

We have corporations whose stock goes to record highs, so the market sees extra value in their business model, yet they don't pay their share of taxes, and as the article I posted states, some don't even pay taxes because of their off shore accounts and funny depreciation. Regular people pay their taxes. They can't help it. It is taken out of their check before they get it. Why should they pay for the taxes some of these rich corporations evade? Why shouldn't they be upset?

I also brought up the type of taxes that are paid, which are different than some of our trading partners, which creates taxes on goods, produced, not income produced which actually puts our U.S. companies who make the goods in the U.S. at a disadvantage, which you obviously misunderstood. A good trade agreements would correct that type of trade but ours do not. It would tax foreign goods, not U.S. goods. You call it a tariff, but other countries call it an ad valorem tax. You didn't understand that concept either. I then pulled up another example with agriculture and how the European countries avoid WTO provisions in trade agreements by categorizing their payments as environmental supports, not subsidies.

You didn't understand that either.

In each case, you had to make up something different than what I posted, adding words here or there, or making huge generalizations based on your inability to understand what I typed.

I can't take you on for tutoring, steve. You are just too slow.
 

Steve

Well-known member
I fully understand the danger of your wanting to thrust more taxes on Americans... I understand when some-one abuses the tax laws.. in fact if you check back in the last 13 pages you would see I responded to that very issue...

but what you want to do is use our tax code to "punish" corporations...... taxes are not punitive and should never be used for to punish an American business..

I understand how we are not on a fair trading field with the countries that we compete against...

what I don't understand is:... "how more taxes and more regulatory costs of "corporations" will help "American Business" compete?

instead of avoiding the question with a bunch of other topics, try explaining that... because as far as I am concerned this discussion was over several pages ago when you failed to answer it and started in with the insults...
 

Soapweed

Well-known member
Steve said:
I fully understand the danger of your wanting to thrust more taxes on Americans... I understand when some-one abuses the tax laws.. in fact if you check back in the last 13 pages you would see I responded to that very issue...

but what you want to do is use our tax code to "punish" corporations...... taxes are not punitive and should never be used for to punish an American business..

I understand how we are not on a fair trading field with the countries that we compete against...

what I don't understand is:... "how more taxes and more regulatory costs of "corporations" will help "American Business" compete?

instead of avoiding the question with a bunch of other topics, try explaining that... because as far as I am concerned this discussion was over several pages ago when you failed to answer it and started in with the insults...

I have not read very much of this thread, but the reason American businesses are outsourcing their productivity to other countries is because of the high taxes and regulatory costs being forced onto these American business by our government. It is mostly a problem caused by the Liberals, though the Conservatives are not wholly blameless, either. If the policitians could only realize it, the excessive rules, regulations, and their bungling bureaucracy are what is ruining the conditions for home-grown American businesses to survive.

Cut taxes, and Americans will prosper. Add more taxes, and the Chinese will be the main benefactors. If the "do-gooders" only realized it, even the increase in the minimum wage doesn't really help the Americans in the long run. It also makes it harder for American business to hire home-grown "legal" labor. It is a no-brainer, but the Libs can't figure it out. Everyone whines about China and other foreign countries getting all our business. It is impossible to turn back the clock, but it is the stupid policies set forth by the Liberal thought process that has brought about these conditions. The unions pricing themselves out of the labor force, is just one glaring example.
 

Tex

Well-known member
Steve said:
I fully understand the danger of your wanting to thrust more taxes on Americans... I understand when some-one abuses the tax laws.. in fact if you check back in the last 13 pages you would see I responded to that very issue...

but what you want to do is use our tax code to "punish" corporations...... taxes are not punitive and should never be used for to punish an American business..

I understand how we are not on a fair trading field with the countries that we compete against...

what I don't understand is:... "how more taxes and more regulatory costs of "corporations" will help "American Business" compete?

instead of avoiding the question with a bunch of other topics, try explaining that... because as far as I am concerned this discussion was over several pages ago when you failed to answer it and started in with the insults...

Thrust more taxes? That is something you made up steve, so go argue with yourself on that point, not me.

I think our government is too big, is taking too many of the resources of the country, which hurts the private sector and individual income, and creating present or future tax burdens. More govt. debt is a future tax burden. We are all taxed more than we need to be because we keep having a Congress and a President who spends more than they take in and who can't do the oversight needed to make the govt. regulatory agencies do their jobs and do them efficiently.

I then said that other countries like China, were using their communist labor, and currency manipulation to basically buy U.S. manufacturing base. I also said that other countries are basically dumping their excess manufacturing on the U.S. markets by providing tax credits to their exports and in agriculture, subsidies not counted by WTO rules of trade.

I also said there were a lot of "rich" corporations that were evading taxes by offshore entities similar to what Enron did.

I also presented real evidence to these statements.

You keep wanting to change what I have said so you can make up some kind of argument, steve. Why don't you just make up another name and argue with yourself if that is all you can bring to the discussion?

All it seems you want to do is allow tax evaders to hide under the generalization that we need lower taxes. That proves you just don't have the depth to even engage in the discussion except on a very shallow level.

I never said taxes should "punish" any corporations, but I have said that we need to stop companies operating in the multinational sense when they use that to evade paying taxes on earnings made in the U.S.

As I said before, I just don't have the time to tutor you. You can't make a logical argument with what I have said until you change it into something you want to say and then argue with yourself.



what I don't understand is:... "how more taxes and more regulatory costs of "corporations" will help "American Business" compete?

Making the argument that we as a nation can keep going, not paying for our government, but borrowing to pay for it, because it helps us compete" can and is bankrupting our country and reducing our sovereignty and creating future tax liabilities.

You are part of the problem, steve, not the solution.

You don't stop the problems by allowing govt. to increase in size and cut taxes, you create more problems. The solution is actually decreasing the size of the govt. while making it more efficient. That means making the govt. regulatory agencies do their jobs or cut their funding. No more excuses and no more selling out of govt. power to the highest bidder.

http://www.businessweek.com/magazine/content/03_25/b3838023_mz007.htm
 
A

Anonymous

Guest
GW's last year started off shattering more economy records :roll: :wink: Look for records all year long to be shattered- like $4 gas- then $5 gas- then ?......... :( :( :(

Stocks tank on recession fears
Wall Street starts 2008 on a down note after weak manufacturing report and surging oil prices spark recession fears.

By Alexandra Twin, CNNMoney.com senior writer
January 2 2008: 1:20 PM EST



NEW YORK (CNNMoney.com) -- Oil and gold prices at all-time highs and a report showing contraction in the manufacturing sector were among the factors sending stocks tumbling Wednesday, the first trading day of 2008.

The Dow Jones industrial average (INDU) lost close to 200 points with roughly 3 hours left in the session. The broader S&P 500 (INX) index fell 1.4 percent and the tech-fueled Nasdaq (COMPX) composite lost 1.8 percent.

Meanwhile, oil and gold prices spiked to new records.

U.S. light crude oil for February delivery briefly topped $100 a barrel for the first time ever, before pulling back a bit.
 
A

Anonymous

Guest
Oldtimer said:
GW's last year started off shattering more economy records :roll: :wink: Look for records all year long to be shattered- like $4 gas- then $5 gas- then ?......... :( :( :(

Stocks tank on recession fears
Wall Street starts 2008 on a down note after weak manufacturing report and surging oil prices spark recession fears.

By Alexandra Twin, CNNMoney.com senior writer
January 2 2008: 1:20 PM EST



NEW YORK (CNNMoney.com) -- Oil and gold prices at all-time highs and a report showing contraction in the manufacturing sector were among the factors sending stocks tumbling Wednesday, the first trading day of 2008.

The Dow Jones industrial average (INDU) lost close to 200 points with roughly 3 hours left in the session. The broader S&P 500 (INX) index fell 1.4 percent and the tech-fueled Nasdaq (COMPX) composite lost 1.8 percent.

Meanwhile, oil and gold prices spiked to new records.

U.S. light crude oil for February delivery briefly topped $100 a barrel for the first time ever, before pulling back a bit.

Market ended up with Dow losing 221- after being 300 down...I heard on the radio that this is the worst stock market opening trading day of the year since 1983--within points of being the worst in history which was in 1932 :shock: :( :( :(
 

nonothing

Well-known member
The American economy is failing not only because of its importing of more products then it exports...The biggest factor is that the US dollar is no longer the worlds strongest currency...The EURO is now the worlds trading dollar and in some european countries the US dollar is no longer accepted..I believe in time it will corrected itself somewhat,but it will never be what it was...Losing its power as the worlds currency has minimized its buying power...couple that with the streaming imports from China and the monies spent outside the country over the last five years,it becomes a recipe for leaner times at best.....
 

CattleArmy

Well-known member
The value of the all mighty dollar is falling. It's shown when a dollar in american is a dollar in Canadian (or close). I have family there and it was always fun to visit and give them a hundred dollar bill at the exchange and get 100+. The family would complain when they visited about how little they got for their dollar.
 
A

Anonymous

Guest
December 20, 2007

71% of Americans Disapprove of George W. Bush's Handling of the Economy

While 66% of Americans disapprove of the way George W. Bush is handling his job overall, 71% of Americans say they disapprove of the way Bush is handling the economy according to the latest survey from the American Research Group.

Among all Americans, 32% approve of the way Bush is handling his job as president and 66% disapprove. When it comes to Bush's handling of the economy, 28% approve and 71% disapprove.

Among Americans registered to vote, 31% approve of the way Bush is handling his job as president and 66% disapprove. When it comes to the way Bush is handling the economy, 27% of registered voters approve of the way Bush is handling the economy and 72% disapprove.

While Bush's overall approval among Republicans is at 65% (67% in November), 51% of Republicans approve and 45% of Republicans disapprove of the way Bush is handling the economy. In November, 70% of Republicans approved of the way Bush was handling the economy and 25% disapproved.

A total of 64% of Americans say the national economy is getting worse and 65% are undecided if the national economy is in a recession. A total of 35% rate the national economy as excellent, very good, or good, compared to 48% giving the same ratings in November.
http://americanresearchgroup.com/economy/
 

MoGal

Well-known member
and China thinks they won't be affected by the downturn in US.... not according to this report........

New Year 2008 may destroy USA’s struggling economy

25.12.2007 Source: Pravda.Ru URL: http://english.pravda.ru/world/americas/103144-economy-0

A forecast made by Denmark-based Saxo Bank, chaos will take a grip on the world in 2008. Oil prices will skyrocket to 175 dollars per barrel, the Chinese market will collapse by 40 percent, whereas the U.S. will suffer a 25-percent setback. All this will happen because of the mortgage crisis in the USA which already slows down the U.S. economy.

High oil prices can bring only good to Russia, though. On the other hand, even if the above-mentioned forecast comes true, Russia will face serious problems in its economy too. It is worthy of note that the majority of Saxo Bank’s previous forecasts for 2007 have proved to be true to fact.

On New Year’s Eve most people recollect the outgoing year and hope for the best. However, Saxo Bank experts seem to be an exception from this nice tradition. David Karsbol, the head of market strategy for the bank, said that the forecast had not been made to intimidate people. “It gives a reason to think about the future of the market,” he said.

Saxo Bank experts believe that oil prices will hit the level of 175 dollars per barrel in 2008, whereas grain prices will double. The U.S. and the Chinese markets will collapse by 25 and 40 percent respectively by the end of the summer of 2008. Every third of ten U.S. large building companies will go bankrupt. The British economy will also start declining.

The bank has its forecast on the new U.S. president too. The bank predicts that Ron Paul, the Texan Republican, will take the office in 2008.

On the other hand, if the U.S. economy slows downs its development as predicted, it would mean the decrease of the oil consumption and the oil price.

Oil prices much depend on the political constituent. If the USA launches a military action against Iran, oil prices will most likely jump up to 250 dollars per barrel according to a recent forecast by Standard & Poor’s.

The dark forecast from Saxo Bank does not mention Russia. There was no report issued in 2007 outlining apocalyptic perspectives for the Russian economy. The ongoing economic rise and the stable ruble protect Russia from financial shocks.

Most likely, Russia’s economy will not be subjected to considerable changes or fluctuations during the forthcoming year either. Nevertheless, Russia is a part of the global financial system, which means that the country will obviously suffer from a possible economic collapse that may occur in another part of the world.

Russian specialists say, though, that the nation’s economy will continue to endure unpleasant surprises due to the growing inflation rate. They say that prices in Russia will grow by ten percent in 2008 against seven percent as predicted by governmental officials.

The Conference Board, an international organization that provides trusted insights for businesses worldwide, said that its index of leading indicators reflecting the state of the U.S. economy reduced by 0.4 percent in November and reached the minimum level since July of 2005. Seven of ten indicators (stock prices, the index of consumer expectations, etc) show that the economic setback may begin already in the spring of 2008.

The U.S. Treasury put forward an initiative to reduce the income tax against the background of the credit crisis. The U.S. economy will only gain profit from it because the nation experiences difficulties of cooperation with other countries which use less burdensome tax systems. U.S. Treasury Secretary Henry Paulson stated that it could be possible to replace the income tax with the entrepreneur tax which would be similar to the currently used value added tax (VAT).

U.S. President George W. Bush has not lost his optimism about his nation’s economy despite the gloomy forecasts. The U.S. sub-prime mortgage crisis of 2007 may be replaced by the credit card crisis in 2008, as Americans have been falling behind in paying their bills, with credit defaults climbing by double digits. The value of U.S. credit card accounts that were 30 days overdue rose 26 per cent in October to $17 billion.

Companies like GE Money Bank and HSBC said they’ve seen a 50 per cent increase in accounts that were 90 days past due. Experts said that could lead to more problems for an already struggling economy.

Source: agencies
 
A

Anonymous

Guest
Dow tumbles 257 points today...All hiring (except government) is running in the negative....Locally the railroad is slowing and cutting back-- as I said earlier they have been sidelining thousands of coal cars-- now are doing the same with flat cars...... The MonDak division of BNSF just furloughed several hundred employees...
But GW says things are hunky dory- altho he's now mulling things... :???: :(

Reprinted from MoneyNews.com
Jobs Report Fuels Recession Fears

MoneyNews
Saturday, Jan. 5, 2008


WASHINGTON -- U.S. jobs growth skidded to a near-halt in December and the unemployment rate hit a two-year high, according to a government report Friday that raised recession fears and chances of more interest-rate cuts.

The Labor Department said only 18,000 new non-farm jobs were added last month, the weakest performance since August 2003, while the jobless rate jumped to 5 percent from 4.7 percent in November — the largest monthly rise since October 2001 in the wake of the Sept. 11 terror attacks.

"The unemployment rate moved up in a shocking way and that's sort of political dynamite that may make the Fed more prone to easing than otherwise," said Pierre Ellis, senior economist at Decision Economics in New York.

Ellis said the U.S. central bank was more likely now to cut rates by a half percentage point than a quarter to add stimulus to a clearly flagging economy when it meets at month's end.

"This economy of ours is on a solid foundation, but we can't take economic growth for granted," President Bush said after meeting with his so-called Working Group on Financial Markets. Bush has indicated he is mulling a set of measures to give the economy a boost.


The jobs data rattled financial markets already fearful about rising recession risks. Stock prices were sharply lower at midday, with the Dow Jones industrial average down more than 200 points in late trading. The dollar's value fell and government bond prices gained.
-------------

All the job growth in December came from government hiring, while private industry posted a 13,000 job loss, the first contractions in private-sector employment in nearly 4-1/2 years.

For all of 2007, payroll employment growth averaged 111,000 a month, down from 189,000 a month in 2006.

In December, manufacturers cut 31,000 jobs and construction businesses shed another 49,000. There were 31,000 more government jobs and 44,000 were added in education and health services, but retail industries cut more than 24,000 jobs.
 

Tex

Well-known member
Oldtimer said:
Dow tumbles 257 points today...All hiring (except government) is running in the negative....Locally the railroad is slowing and cutting back-- as I said earlier they have been sidelining thousands of coal cars-- now are doing the same with flat cars...... The MonDak division of BNSF just furloughed several hundred employees...
But GW says things are hunky dory- altho he's now mulling things... :???: :(

Reprinted from MoneyNews.com
Jobs Report Fuels Recession Fears

MoneyNews
Saturday, Jan. 5, 2008


WASHINGTON -- U.S. jobs growth skidded to a near-halt in December and the unemployment rate hit a two-year high, according to a government report Friday that raised recession fears and chances of more interest-rate cuts.

The Labor Department said only 18,000 new non-farm jobs were added last month, the weakest performance since August 2003, while the jobless rate jumped to 5 percent from 4.7 percent in November — the largest monthly rise since October 2001 in the wake of the Sept. 11 terror attacks.

"The unemployment rate moved up in a shocking way and that's sort of political dynamite that may make the Fed more prone to easing than otherwise," said Pierre Ellis, senior economist at Decision Economics in New York.

Ellis said the U.S. central bank was more likely now to cut rates by a half percentage point than a quarter to add stimulus to a clearly flagging economy when it meets at month's end.

"This economy of ours is on a solid foundation, but we can't take economic growth for granted," President Bush said after meeting with his so-called Working Group on Financial Markets. Bush has indicated he is mulling a set of measures to give the economy a boost.


The jobs data rattled financial markets already fearful about rising recession risks. Stock prices were sharply lower at midday, with the Dow Jones industrial average down more than 200 points in late trading. The dollar's value fell and government bond prices gained.
-------------

All the job growth in December came from government hiring, while private industry posted a 13,000 job loss, the first contractions in private-sector employment in nearly 4-1/2 years.

For all of 2007, payroll employment growth averaged 111,000 a month, down from 189,000 a month in 2006.

In December, manufacturers cut 31,000 jobs and construction businesses shed another 49,000. There were 31,000 more government jobs and 44,000 were added in education and health services, but retail industries cut more than 24,000 jobs.

GW's paw lost his election due in part because he was out of touch with most Americans, as he seemed to be when he didn't know grocery stores had scanners that read bar scans. GW's problem is that he has never been in touch with reality, let alone the avg. American.
 
A

Anonymous

Guest
DOW plunges 250 points again today! Dollar drops Again! Oil Price UP!

Reprinted from MoneyNews.com
Merrill Lynch Economist: U.S. Already In Recession

MoneyNews
Tuesday, Jan. 8, 2008


The U.S. economy has entered into its first major recession in 16 years according to David Rosenberg, chief North American economist for Merrill Lynch, who declared the downturn in a research note to clients released on Monday.

Mr Rosenberg wrote: "According to our analysis, this [recession] isn't even a forecast any more but is a present day reality."

He points to the four key barometers used by the National Bureau of Economic Research (NEBR) - employment, real personal income, industrial production, and real sales activity in retail and manufacturing.

He wrote that these "seem to have peaked around the November-December period, strongly suggesting that we are actually into the first month of a recession."

Other Rosenberg points:


• At no time in the past sixty years has the unemployment rate risen 60 basis points (50 bps is the actual cutoff) from the cycle low without the economy slipping into recession, and here we now have the jobless rate hitting 5% in December versus the March/07 trough of 4.4%.

• Aggregate hours worked in the economy contracted at a 0.4% annual rate in 4Q, and this comes on the heels of a 0.6% decline in 3Q. Back-to-back declines in total hours worked have always been associated with recession.

• The breadth of the report was also very poor with the diffusion index slipping below the 50 cutoff mark, just like ISM, to 48.4% from 52.2% in November. A number below 50 indicates that a plurality of industries are now in the process of cutting jobs outright - heading into the last recession, this index fell below 50 in February 2001 and the recession began ... exactly one month later.

The level of unemployment is up 13% YoY, again a development that has always been consistent with past recessions. The YoY rate of change in the level of the unemployed who have been idle for at least 15 weeks is particularly ominous - +20%, which is a pace that prevailed in the early stages of prior economic downturns (hitting this trend in April/01 and in Aug/90 when the recessions were one-month old).

• And we have Household Employment contracting 49,000 in 4Q and the YoY trend slowing to +0.2% in December from +2.2% a year ago, another classic recession signal. Consider for a second that in March of 2001 that trend was running at +0.8%, and in July of 1990 the pace was +1.1% - those two months represented the onset of a technical recession and yet the trend in Household jobs is weaker now than it was then.

Richard Berner and David Greenlaw, economists for Morgan Stanley, disagreed, writing, "Incoming data suggest that tighter credit has pushed the U.S. economy to the brink, and we reiterate our call for a mild U.S. recession in the first half of 2008. Weak employment data and slowing in export orders reported by purchasing managers undermine the case that a healthy consumer and strong global growth would forestall a downturn...

"Most of the weakness is concentrated in the first half of the year."

Berger and Greenlaw added, "The key question now is how deep the recession will be and how long it will last. We continue to expect that the downturn will be comparatively mild and short; after all, recessions abroad are unlikely, so global growth will still be a prop; U.S. excesses are modest away from housing, and peaking inflation should give the Fed latitude to ease monetary policy further...

"However, the slide in job growth hints at near-term downside risks … The bad news, moreover, is that surging energy prices represent an additional threat to such wage gains when adjusted for inflation, and more broadly higher energy quotes threaten real income and spending. Because the recent oil price hikes are more the product of shocks to supply than demand, they will depress global growth and push up inflation."

Merrill's Rosenberg concluded: "Friday's employment report strongly suggests that an official recession has arrived. The recession dating committee at the National Bureau of Economic Research (NBER) will be the final arbiters, but since it waits for conclusive evidence, including benchmark revisions, it may be at least two years before we are notified."
 

Goodpasture

Well-known member
From August 15th

Want to know how bad it’s getting out there. This bad: Shares of Countrywide Financial fell yet again today—the fifth straight down day for the mortgage lender—following a report in which Merrill Lynch analyst Kenneth Bruce raised the prospect that Countrywide could be forced to file Chapter 11 bank “Effective insolvency” would result should creditors force Countrywide to sell assets at depressed prices or investors lose confidence in its ability to raise cash, Kenneth Bruce, a Merrill analyst in San Francisco, said in a research note today.
LINK

Stocks at Countrywide had hit $18.00 or there abouts

Today
NEW YORK (Reuters) - Countrywide Financial Corp on Tuesday denied market speculation that it might seek bankruptcy protection, but its shares sank 27.4 percent in their biggest drop since the 1987 stock market crash on concern the largest U.S. mortgage lender's problems would worsen.

The shares closed down $2.09 at $5.55, their lowest close since 1996, even after the lender said, "There is no substance to the rumor that Countrywide is planning to file for bankruptcy, and we are not aware of any basis for the rumor that any of the major rating agencies are contemplating negative action relative to the company."
LINK

Thanks for the economic leadership, Mr Bush
 

Latest posts

Top