Saturday, August 18, 2007
Another Bush another war, another Bush another recession
We can only wonder why anybody thought there might be a different outcome. If it happened to the smart one, how could we expect a different result from the dumb one?
Although few economic analysts put the odds of recession at better than 50 percent, most are now upping their probabilities.Frankly, I thought Our Dear Embattled Leader got the recession thing out of the way at the beginning of his reign. Who could imagine he would go for a double?
"We've lowered our 2008 growth forecast to 1.5 percent, down from 2.3 percent previously and 1.8 percent in 2007. We now expect a consumer recession, for the first time in 17 years," said a revised forecast issued Thursday by Merrill Lynch.
Whether Wall Street’s turmoil brings a sharp slowdown or a full-blown recession depends on three inter-related variables: how quickly banks resume lending to businesses and home buyers; whether the recession in the housing sector bottoms out or deepens; and whether falling home prices and a lack of lending combine to hit the consumer’s ability to spend.
“What we’re going through now is unlike anything we’ve seen before. All financial crises have their unique characteristic — this one is characterized by a seizing-up in the home-mortgage market,” said Lyle Gramley, a former governor of the Federal Reserve System in the 1980s who's now with the Stanford Group, a consulting firm.
He puts the odds of recession at 50 percent.
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