Recovery To Be Moderate, Not V-Shaped: Kohn

Market Watch ^ | 10-13-2009 | Greg Robb

[blam]

Recovery To Be Moderate, Not V-Shaped: Kohn

Oct. 13, 2009, 2:34 p.m. EDT
Greg Robb, MarketWatch

WASHINGTON (MarketWatch) -- The economy recovery will be moderate and not a quick snap-back commonly referred to as a V-shaped growth path, said Donald Kohn, the vice-chairman of the Federal Reserve Board on Tuesday.

"All told, I expect that the recovery in U.S. economic activity will proceed at a moderate pace in the second half of this year before strengthening some in 2010," Kohn said in a speech to the National Association of Business Economics meeting in St. Louis.

Difficult labor market conditions are a key factor in his expectation that activity will be retrained going into 2010, Kohn said. In addition, the financial headwinds holding back growth are likely to abate slowly, he said.

[snip]

[SERKIT]

Mmm mmm mmm, A ZERO-shaped recovery! Mmm mmm mmm!

[GeronL]

You cannot have a recovery without jobs.

[blam]

The Economic Recovery Is Well Underway (WSJ)

When it comes to the economy and financial markets, good news has far outweighed bad news in 2009. Just about every piece of economic and financial market data is tracing out a V-shaped recovery. One would think that this would lead to a little more optimism from the conventional wisdom crowd, but it doesn't. With unemployment at 9.8% last month and the economy still losing jobs at an elevated pace, people are worried. Many fear a W-shaped economy, otherwise known as a double-dip recession.

[snip]

[JohnQ1]

Don’t worry about “V” or “W”. We’re more likely sliding down the vertical arm of “L”. It goes down and stays down.

[RedStateGuyTrappedinCT]

No jobs no spending, no spending no recovery. The WH and MSM are all blowing smoke there is no recovery.

[eggman]

So, just like lower worldwide average temperatures doesn’t mean we don’t have global warming, continued negative growth and higher unemployment doesn’t mean we don’t have a recovery. Now Congress can come up with a scheme to sell job credits for companies that are laying off workers. That ought to fix it.

[Tallguy]

The WH & MSM are almost totally ignorant of economics. They treat everything as if it depends on psychology or the public mood.

[allmost]

The public's expectations of inflation are more likely to fall than rise in the current environment, he said.

The public must as dumb as a box of rocks then.
We're issuing debt and buying it back. It's called printing money. They must be working on a more politically correct term for inflation.

[ml/nj]

Yeah. But is it right-side-up or up-side-down?

ML/NJ

[budwiesest]

Nailed it!

I was trying to find a letter in the alphabet to describe the 'trend' we'll likely experience under this regime and could only find this key \ that'll have to do for a while.

Ever make bubbles and have a bubble-inside-a bubble? Well, the housing bubble (outer) popped and now we're looking at the inner bubble, dragged down by the weight of the collapsed housing bubble- just sitting there, waiting to pop. This is the 'government' bubble.

Contained within this bubble are a myriad of popular programs that inflated overtime to make it vulnerable to popping. Efforts to thicken the 'skin' by raising taxes will only buy a little time (see California). Cutbacks in public spending will begin slowly at first, followed by wholesale layoffs of public servants when reciepts fall (as one would expect from tax increases).

Obama's plan is to inject more dollars into the public sector, ignoring the private which will only hasten the 'pop'. Something the Chili-heads from Chicago don't understand is, you can have a huge public expense, but you first must have a vigorous and growing private sector to extract your socialist bennies.

We'll never rid ourselves of socialists, but the least we can do is educate the dumbasses(majority of US voters). Let's see, when spending exceeds revenues by trillion of dollars, you have a socialist problem. When revenues exceed spending, you have a capitalist problem. I'll take the latter because it creates things and provides jobs. Anyhoo, things won't be getting better anytime soon 'cause the leaders haven't any clue 'cause they weren't brought up right.

[Oatka]

We’re more likely sliding down the vertical arm of “L”.

Then the vertical part falls over and becomes horizontal because of the "headwinds".

[CodeToad]

‘L’ shaped. Down then over.