Posted on 03/07/2008 6:02:49 AM PST by bert
If you think a U.S. recession is here or imminent, you're in good company. Most Intrade bettors believe this and probably 99% of journalists and all Democratic office seekers do, too. We'll soon see. For now, I still say the 2008 U.S. recession is oversold. Why the widespread recession fear when unemployment is low, interest rates are low and the Fed is on the case?
I submit there are four false reasons behind the unnecessarily grim outlook for the economy. All of them get a lot of attention. But they can be safely dismissed.
(Excerpt) Read more at forbes.com ...
Rich Kargard comes out with guns blazing
I told my fellow churchfolks last Sunday, the ones who value a mosquito ecology over human life and who were clucking over a recession, that there most certainly was not a recession and that idea was a Democratic fantasy.
Everywhere I travel, whether it be Las Vegas, Scottsdale, San Diego, Denver and even Salt Lake City, things are booming. A mere slowdown from an overbuilt housing market suddenly becomes a crisis. High gas prices by our enemies trying to influence the election is very evident. The drivebys are determined to get a dim into the White House.
My problem is this. Our president is not taking the lead with the bully pulpit to refute all the enemies of the right. Just a pathetic situation in my opinion. We need a better campaign as we know that McCain has no voice either. Much too weak on this issue.
As I recall, President Bush did a pretty good job of “talking down” the economy in the 2000 race. Democrats took him to task for that. It’s just politics, I guess.
Well we are experiencing record number of foreclosures, prices that are falling (dramatically in some areas), construction is down nearly 50% from its peak, and mortgage companies are going out of business and the loses are taking down major banks. I am optimistic that we will recover, but we are facing real problems that so far have not been fixed by fairly aggressive measures by the federal reserve and federal government.
All the indicators add up to the fact that we are in recession already this quarter. Here’s my quick speculation for what it’s worth. Recession next quarter also, recovery occurs into the 1st quarter of 2009 and then back into recession the final three quarters of 2009, recovering in 2010. My reason’s are simple: Inflation cannot be contained because of the energy and raw food commodities. The middle class are in a double pinch of credit crunch and inflation and can’t use homes as ATM’s. The subprime short-term rates have not peaked yet, that occurs late 2008/early 2009. Foreclosures will continue to rage unnabated and stimulus takes several months to really work through our economy.
If you have been fiscally responsible and have cash, early first half of 2009 will be a buying bonanza for real-estate and high priced toys. The stock market hasn’t reached bottom and most stocks are still overpriced. I see this time as great for buying into companies with cash reserves, good management and P/E’s. Consumer healthcare and higher ed will be my choice of buy along with tobacco companies.
You obviously did not check the jobs market this morning as it has lost enough to put it back to 2003 levels...it is not looking good. The market on Squack Box, Word on the Street and every other program on the economy is giving the actual numbers. Statistics tell a different story, and the dollar keeps falling. Overextended Americans, and greedy banks, mortgage lenders and credit cards have finally taken its toll...more bad news to come. Hang on, Hold on and sit it out, its gonna be a rough ride.
Yes, just posted similar below. The energy factor is a VERY big problem and only strictly regulating speculation will change this. The supply and demand fundamentals tell me oil should be $65-$75 a barrel, their is surplus supply but the price is STILL going through the roof. Our entire economy runs on four year boom and bust cycles now and we are seeing bust.
The wife and I just returned from a two week trip to SW Colorado for some winter play. As usual, we drove out with our truck camper. It usually takes 2 days to drive the 1530 miles to our destination. Along the way we pass through TN, AR, OK, TX, NM, and finally, CO.
What we noticed was at least 50% of the vehicles on the road where truckers. This is a significant increase from the years when I traveled regularly for a living, roughly 280 days a year from 1985-2001. These trucks, with diesel prices topping $3.80/gallon in some places, are not driving around with empty trailers. They are hauling goods to be sold or to be used to manufacture goods to be sold. Somebody, somewhere is buying the goods these guys are hauling in very large amounts. Similarly, we saw primarily new cars on the roads, i.e., less than 2 years old in most cases.
If we are in a recession, who is buying all the goods in these trucks? Similarly, who is buying all the new cars we saw on the road?
We are seeing, and might well see a bit more inflation creep into the mix due to the high fuel prices, but we are, by my observations, nowhere near a recession. I vividly remember the Carter years. This ain't them, but it could be Jimmuh Carter II- the Sequel, if Osama/Obama or the Queen of Mean gets into the Whitehouse and enacts their own Socialistic schemes.
On another note, on the entire trip we saw 2 Osama/Obama bumper stickers and one Hillary bumper sticker. This is nowhere near the level of Dim support that we saw on our trips in 2000 and 2004......maybe there really is "hope"?
Whether or not there is a recession, I don’t know. However, I do know that considerable discrimination is needed in listening to pundits on either side. Here are some cues:
1) George Soros generally bets against the US. As such, he strongly wants recession and other crisis, as it will be profitable to him. If he is able to trigger one, he will do so in a heartbeat. Also note that he has tried to ingratiate himself with all three major candidates.
2) Conversely, those who are bullish will remain bullish until the bitter end, because they are invested in a bull market. They will cheer lead on the deck of the Titanic. A good cue that they don’t believe what they are saying is when they recommend specific stocks as “must buy”. Guess why?
3) Given enough time, and skill, about any balloon or crash in the market can be mitigated. Internationally, steps can be taken to insulate markets from each other. But this only works if the powers that be recognize there is a problem, and take appropriate measures to correct it. And “mitigate” is not the same as “prevent”.
My only disagreement is I think most stock prices are already cheap, not overpriced. There is still downward pressure on stocks because of economic concerns, but we will be entering into one of the best buying opportunities in a long long time.
In my area of the country exports are booming and factories are working as hard as they can to keep up.
Housing has slacked a little but values are not declining.
Exactly! And Freeper doomsday predictors fail to notice the big picture of how things happen. I too remember Jimmah and his 18-20% mortgages. The trouble in the housing market is simply the easy money lent to unqualified borrowers. Those numbers are extremely unimportant in that big picture.
We depend on the tourist industry in our area. Already the foreign travelers are here. The weak dollar will drive the travel industry to new levels. Many of the high end lodges and motels are already fully booked for the season.
Last fall we shipped numerous sales to Canada. Yesterday we made a sale to folks from India.
We’ll take all the foreign money we can get, weak dollar or not.
Everywhere I travel, whether it be Las Vegas, Scottsdale, San Diego, Denver and even Salt Lake City, things are booming
Rich K. apparently travels in only one part of the country and in one sliver of the economy.
Unemployment is at 4.8 according to the Labor Dept. What jobs market are you talking about?
The difference is that there really was a recession then. Stats show that clinton handed dubya a recession.
Because it's a Presidential election year, and the Democrats desperately want to win back the White House.
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