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Second U.S. recession could be worse than the first

August 9, 2011 1 comment

rawstory

A second recession, what many are calling the double-dip recession, could be on its way, economists warn. And should it come, it will probably be even more devastating than the previous period of economic woe.

“It would be disastrous if we entered into a recession at this stage, given that we haven’t yet made up for the last recession,” Conrad DeQuadros, senior economist at RDQ Economics, told the New York Times.

The Standard and Poor’s downgrade of the U.S.’s credit rating bodes ill for the world’s financial markets as well as the domestic market.

President Barack Obama, once the debt deal with Congress to avoid a debt default was struck, announced a pivot to focus on jobs.

“I’ll continue also to fight for what the American people care most about: new jobs, higher wages and faster economic growth,” Obama said in a statement to press after the debt deal was passed last week.

While the working age population has grown 3 percent in the past four years, the economy has 5 percent fewer jobs — or 6.8 million less than four years ago. Unemployment stands at 9.1 percent.

Economists don’t think another stimulus package will do the trick, either.

“There are only so many times the Fed can pull this same rabbit out of its hat,” Torsten Slok, the chief international economist at Deutsche Bank, told the Times.

China Boldly Goes (Again) Where Moody’s Has Never Gone Before, Downgrades US From A+ To A, Outlook Negative

August 3, 2011 Comments off

zerohedge.com

As was predicted last week, China’s rating agency Dagong, unlike its worthless western counterparts, has come through on its threat to downgrade the US in the event a subpar debt ceiling deal was hammered out. As Xinhua reports, ‘Dagong Global Credit Rating Co. said Wednesday it has cut the credit rating of the United States from A+ to A with a negative outlook after the U.S. federal government announced that the country’s debt limit would be increased.” Confirming that not being branded a NRSRO is the only thing that allows a rater to still think straight (and not in terms of lost client revenue if one goes ahead and tells the truth), Dagong’s decision was spot on: “The decision to lift the debt ceiling will not change the fact that the U.S. national debt growth has outpaced that of its overall economy and fiscal revenue, which will lead to a decline in its debt-paying ability, said Dagong Global in a statement.” So while Moody’s, which is now certified as the Read more…

US raised debt ceiling 102 times – economist

July 17, 2011 Comments off

rt.com

President Obama has warned the US is running out of time to deal with its financial troubles – the Congress must raise the current $14.3-trillion debt ceiling again. And as Professor Rodrigue Tremblay told RT, this has become a tradition in the US.

­The US repeatedly gets away with raising the debt ceiling, Rodrigue Tremblay told RT.

“This system that the US has, has been in place since 1917. They raise the debt ceiling each year, they have done it 102 times; eight times under George W. Bush alone. Most countries do not run their Read more…

Quantitative Easing Rounds 1 and 2 Hurt the Economy … Bernanke Proposes Round 3

July 14, 2011 Comments off

georgewashington2.blogspot.com

Federal Reserve chairman Ben Bernanke is hinting at a third round of quantitative easing.

But Dallas Federal Reserve Bank president Richard Fisher said today:

I firmly believe that the Federal Reserve has already pressed the limits of monetary policy. So-called QE2, to my way of thinking, was of doubtful efficacy, which is why I did not support it to begin with. But even if you believe the costs of QE2 were worth its purported benefits, you would be hard pressed to now say that still more liquidity, or more fuel, is called for given the more than $1.5 trillion in excess bank reserves and the Read more…

New signs economy’s recovery faltering

June 2, 2011 Comments off

startribune

Evan Solomon worked at the New York Stock Exchange Wednesday as fears that the economy was stalling rattled the markets.

The U.S. economic recovery is faltering, and Washington is running out of ways to get it back on track.

New reports Wednesday showed a steep slowdown in the manufacturing sector and weak private-sector job creation in May. The grim news comes on the heels of other recent indicators — falling home prices and consumer spending — that reflect an economy slowing to a limp this spring.

The data dash the sunnier expectations that many analysts had entering the year; many forecasters had expected economic growth of 3.5 to 4 percent in 2011.

Instead, the U.S. economy appears to be settling back into a pattern of Read more…

Stimulus law will cost $43 billion more than estimated

May 26, 2011 Comments off

dailycaller

FILE – In this June 18, 2009, file photo a road sign reading “Putting America to Work” and “Project Funded by the American Recovery and Reinvestment Act” is seen along Route 120 in Waukegan, Ill. (AP Photo/Jim Prisching, File)

The Congressional Budget Office said in a new report that President Obama’s economic stimulus law will raise the federal deficit $830 billion over ten years, $43 billion more than the initially estimated cost of $787 billion.

During the law’s consideration in Congress, the Joint Committee on Taxation made the initial estimate.

CBO estimated the law lowered the unemployment rate by between .6 and 1.8 percent in the first quarter of 2011 and increased the number of people employed by between 1.2 million and 3.3 million during that same period.

Obama and congressional Democrats enacted the law, arguing it would provide a quick jolt to the economy. Republicans opposed the law, saying it would increase deficits and wasn’t designed to work quickly.

CBO estimated the government spending in the law had a major impact on the economy, increasing the Gross National Product by as much as 4.6 percent in the second quarter of 2010.

However, the unemployment rate has continued to remain high since 2009, hurting Obama politically.

CBO  based its estimate on macroeconomic modelling, saying the jobs “created or saved” reports by recipients of stimulus dollars could not provide a full picture of the economic impact.

Where is the Global Economy Headed? The Experts Weigh In

May 4, 2011 Comments off

caseyresearch

I’m writing today after spending the last three days in Boca Raton, Florida, attending The Next Few Years: A Casey Research Summit. If you’re not already familiar, the purpose of this summit was to bring together many of the world’s top economic and investing minds to share with us where they believe we’re headed in the months and years ahead.

The cast of speakers was impressive, to say the least. They brought a variety of view points, an almost overwhelming amount of data and analysis, and a perspective on what the current world means for investors that would be hard to build on. Yet, with all this variety of thought and perspective, one central theme seemed to emerge.

If you’re able to see the annihilation of your currency coming down the pike, and you take the right steps to protect your wealth, you can come out on the other side largely unscathed. Given the right investment strategy, you may even be able to grow your wealth significantly during this time.

While I knew this on some level coming into this event – I’ve been reading Casey Research’s work for just a few months now, and this was the first of their events I’ve attended – I was given pause by Casey CEO Olivier Garret’s welcoming remarks.

“While no one can predict the future with complete certainty,” he said, “it should give you comfort to know that the faculty for this summit have in common that they correctly anticipated the trends now dominating the global landscape.”

When you bring together 35 experts who each correctly predicted what’s happened in recent years – while the mainstream media Read more…

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