Tuesday, February 10, 2009

Obama: Not a "run-of-the-mill recession"

President Barack Obama last night described the economic malaise as "not your ordinary, run-of-the-mill recession."

They might be a bit of an understatement. The economists that accurately predicted the recession sometimes with remarkable detail and timing see a very rocky road ahead. Analysts like Nouriel Roubini, Max Keiser, Nassim Taleb, Peter Schiff and others all see the same signs of gloom.

  • Debt and leveraging is still the main underlying problem. Because of the credit crunch this is easing up among consumers and businesses, but government is making up for this somewhat by borrowing trillions of dollars. It's difficult to predict how large the federal deficit will be before the year is out.

  • The job market is the worse its been since the Great Depression. Not only half a million job cuts a month but record numbers of companies initiating a hiring freeze to cut costs.

  • The housing meltdown is still a major problem. People continue to lose their homes depressing prices. Roubini thinks prices must fall by about 40 percent before bottoming out.

  • Despite an injection of $350 billion into the credit markets over the winter, the credit market is still frozen. No one really knows for sure how much it will take to deleverage. Nouriel Roubini thinks it will take $3.5 trillion over what has been appropriated thus far.

  • Companies are cutting back as much as 20 percent in new spending.

  • Washington Post

    Obama: Not a 'Run of the Mill' Recession
    ABC News - 19 hours ago
    ... which he called "not your ordinary, run-of-the-mill recession." President Barack Obama answers a question during his first prime time televised news ...
    Video: Obama brutally changes his tone france24english

    Obama: 'Only Government' Can Break Cycle of Job Loss, Economic ... FOXNews

    Obama Says Economic Crisis Comes First Washington Post

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