Posted on 09/15/2009 11:31:17 AM PDT by RC one
Federal Reserve Chairman Ben Bernanke said on Tuesday that the worst U.S. recession since the Great Depression was probably over, but the recovery would be slow and it would take time to create new jobs.
"Even though from a technical perspective the recession is very likely over at this point, it's still going to feel like a very weak economy for some time," Bernanke said after giving a speech at a Brookings Institution conference.
In declaring the recession over, Bernanke went slightly beyond the Fed's most recent assessment that the economy was leveling off and that indications on growth had improved.
However, he cautioned that growth next year would probably be not much faster than the economy's so-called long-run potential rate, which meant it would be slow to absorb excess capacity and pare the unemployment rate.
"The general view of most forecasters is that that pace of growth in 2010 will be moderate, less than you might expect given the depth of the recession because of ongoing headwinds," Bernanke said.
He spoke on the one-year anniversary of the collapse of Lehman Brothers, which sparked a global panic that forced the Fed to cut interest rates to almost zero percent.
Economists generally estimate U.S. trend potential growth to be in a range around 2.5 percent.
Bernanke acknowledged that a recovery could turn out to be either stronger or weaker than forecasters expect, but warned of ongoing pain in the labor market under the expected growth rate.
"Of course there are risks on both sides of that forecast -- we could have a stronger recovery, we could have a weaker recovery," he said.
(Excerpt) Read more at news.fidelity.com ...
How is the Wild One’s collar bone?
parsy, who nicked his pinky on a guitar string
“Commercial Realestate will lead the second half of this recession...”
I have read this before on FR but I don’t believe I have seen this anywhere else. Here in Colorado Springs, I see some commercial stuff, like strip shopping centers either remain full as weak tenants fall away and others replace them, or the centers empty out entirely. And some of the ones that empty out you would think because of location they would not have this issue, so I don’t know what is at play there. Hopefully, bankers and such learned something from the residential mess and are planning for the commercial, but who knows.
>>How is the Wild One’s collar bone?<<
He had it clamped back together. We are calling him “RoboDad”
>>parsy, who nicked his pinky on a guitar string<<
Get well kisses to your pinky from me and the girls!
Can’t we have the good WITH the bad?
I would love if my DH could have a month off in the summer.
With a 35 hour workweek, both of us could have jobs and split schooling our girls!
“This message is like the flatulent precursor to impending and raging diarrhea. “
LOL Post of the day!!!
If this recession is over, the odds of a double dip must be significant indeed.
And the job market must be improving, because only a quarter of a million people lost theirs last month - well, technically it was over 900,000, but the Labor Department doesn't count in the U-3 report people whose temporary job assignments are over and those who have stopped looking for work. Oh, well.
So keep putting your money in those wonderful public companies folks, like Citi, AIG, Bank of America, Fannie and Freddie, because everything's coming up roses, just like Obama says.
Me? I'll soon be shorting this bitch like there's no tomorrow - which given our debt ratios, may not be that far off.
Saw Tim Geithner on ABC this morning and he is not saying that.
A recession is two consecutive quarters of economic decline. So one should figure that a recession is over with two consecutive quarters of economic growth. We have yet to see one such quarter. (First, the third quarter isn’t over yet and, second, the preliminary results won’t be out until October 29th).
I would be happy to see it over, but the evidence isn’t there. One government-sponsored giveaway to simulate growth does not equal growth.
Bernanke must be a long-lost twin of Baghdad Bob.
Economy is good (old lending standards) and you find a good piece of land that will fit nicely in a business model at the right price. You pool money to the tune of 5% and expect a 20% return. You develop your property using the funds loaned to you with only 5% of your own money. You get the building leased up and are planning to make 20% on your 5% over 10 years. Your lease rates ensure that. This includes your 20 year mortgage payments and all expenses from taxes, utilities, insurance, renovations, etc. You are booking and taking profits at a steady pace 5 years into it. The economy tanks, several tenants default your revenue drops below first projected revenue then after two years below real revenue. You have made some good money in the first 5 years and want to hold out expecting that return to come back. You may only be making 18% after 20 years now, but you can hack it. To slow the bleeding, you offer lower lease rates for the vacancies. As tenants renew leases or learn of it, they all want to negotiate their terms. Now you are operating at a monthly loss. But you made money and there is still money in the bank to cover the losses.
At some point your actual losses forecasted completely eat away all your profits and you are coming out of pocket. A sale of the property would not pay off the mortgage and you are stuck. You and your partners decide to file bankruptcy and dissolve the LLC with some winnings still in tact.
Again, these are deals made in the old economy that was so horrible under Bush. We are just about getting to the point where investors are looking at their losses and deciding to bag up what they have left and giving it to the lender.
Thanks for that explanation. :)
Okay, that settles it. What’s on TV tonight?
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