Our Awful Situation

Archive for the ‘Recession’ Category

Jim Rogers: Fannie and Freddie … let it die!

Posted by Charlie Kilo on July 15th, 2008

Way to go Jim Rogers!

Confidence Ebbs for Bank Sector and Stocks Fall

Posted by Charlie Kilo on July 15th, 2008

Even as the Bush administration moved to rescue the nation’s two largest mortgage finance companies, confidence in the banking sector spiraled downward Monday.

In Southern California, lines snaked around branches of IndyMac Bancorp, the large lender that was seized by federal regulators on Friday, as customers hurried to withdraw their money. As the anxiety spread through the financial markets, two other big banks, one in Ohio and another in Washington State, were compelled to assert that they were sound.

Even as federal regulators issued assurances that depositors’ savings were safe, Wall Street analysts circulated lists of lenders that might be vulnerable. Shares of regional banks plunged in one of the sharpest declines since the 1980s.

Subprime Debacle May Spark 2-Year Credit Crisis

Posted by Charlie Kilo on June 4th, 2008

More “no duh” news from CNBC:

A “credit recession” sparked by the U.S. housing market downturn and excesses in structured finance may last more than two years, and the financial sector will undergo “massive consolidation,” two leading Wall Street strategists said Wednesday.

The fallout from deteriorating subprime mortgages and the broader housing and credit crisis will eventually lead to a healthier market—but not until after a prolonged purging process, Jack Malvey, Lehman Brothers Holdings’s chief global fixed-income strategist, said in New York.

“We’re going through a tough spell with regard to credit,” Malvey said at a Securities Industry and Financial Markets Association conference.

The “subprime debacle” due to years of excess and easy credit will be followed by years of tight credit, Malvey said.

Fed sees the light

Posted by patriot on May 21st, 2008

Well, duh. Central planners can be real dough-heads sometimes…

The Federal Reserve sees worse economic problems ahead, according to new forecasts from the central bank released Wednesday.

But even so, the Fed may be reluctant to cut interest rates any further than it already has, the minutes from its last meeting show. (The minutes were also released Wednesday.)

The Fed lowered its economic growth forecast for the year. At the same time, it raised its projections for inflation and unemployment. The combination of slowing growth and rising prices created a difficult situation that made the Fed’s latest decision to cut rates on April 30 a “close call.”

JPMorgan Chase CEO: Recession Just Beginning

Posted by Charlie Kilo on May 14th, 2008

Its just beginning:

JPMorgan Chase & Co.’s chief executive said Monday that while the crisis in the credit markets appears to be three-quarters over, he believes a U.S. recession is just beginning.

“Even if the capital markets crisis resolves, it does not mean that this country will not go into a bad recession,” said CEO James Dimon, whose bank saw its first-quarter profit fall by half due to the recent collapse of the U.S. mortgage market. “The recession just started.”

“We don’t know if it’s going to be mild or severe,” he continued, speaking at a conference in New York hosted by Swiss bank UBS AG. “We’re thinking there’s a third of a chance that it’s going to be pretty bad … closer to the 1982 recession than the very mild recessions we had in 2001 and 1990.”

Buffett: recession may be worse than feared

Posted by Charlie Kilo on April 28th, 2008

According to the world’s richest man, its bad out there and getting much worse:

Warren Buffett, the world’s richest person, said on Monday the U.S. economy is in a recession that will be more severe than most people expect.

Buffett made his comments on CNBC television after his Berkshire Hathaway Inc (BRKa.N) (BRKb.N) agreed to invest $6.5 billion in the takeover of chewing gum maker Wm Wrigley Jr Co (WWY.N) by Mars Inc in a $23 billion transaction.

“This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think,” Buffett said. “This will not be short and shallow.

“I think consumers are feeling gas and food prices,” he added, “and not feeling they’ve got a lot of money for other things.”

Greenspan, on CNBC: U.S. in recession

Posted by Charlie Kilo on April 9th, 2008

Thank, Alan for the heads up. I wonder if he knows that people are already calling it the “Greenspan Recession”:

Former Federal Reserve Chairman Alan Greenspan said on Tuesday the U.S. economy was in recession, and said it would be appropriate to tap public funds to resolve the mortgage-related crisis that has helped pull the economy under.

In an interview with CNBC television in which he defended his chairmanship of the U.S. central bank against charges that his policy missteps had laid the groundwork for the current crisis, Greenspan said Fed decisions on his watch were rationally constructed based on evidence at the time.

“I have no regrets on any of the Federal Reserve policies that we initiated back then because I think they were very professionally done,” Greenspan said.

It is unfair to hold his Fed to task for the housing bubble or the current crisis in credit markets, because global market forces were at work to keep long-term interest rates low, not just Fed policies that brought short-term U.S. interest rates down to multi-decade lows, he said.

“Clearly, certain of our anticipations of what would happen as a consequence of those policies were off but there’s no way of avoiding that,” he said.

Translation: “its not my fault!”

Fed admits the obvious

Posted by patriot on April 8th, 2008

Well, duh. Oh, but they call it a “downturn” instead of a recession Good play on words.

Some members of the Federal Reserve are worried about the possibility of a “severe and protracted downturn” in the U.S. economy that could last into next year, according to the minutes of the central bank’s latest meeting released Tuesday.

The Fed said its staffers now expect the nation’s gross domestic product (GDP) to shrink in the first half of this year, the clearest signal yet from the central bank that its members think the economy could be close to entering a recession — if it hasn’t already. Many Fed policymakers indicated that a downturn in the economy in the first half of the year “now appeared likely.”

Confidential Document Said To Warn of Conflict or Revolution Ahead for America

Posted by Charlie Kilo on April 4th, 2008

Conflict and Revolution

Wars and rumors of war, anyone?

WMR (waynemadsenreport) has learned from knowledgeable sources within the US financial community that an alarming confidential and limited distribution document is circulating among senior members of Congress and their senior staff members that is warning of a bleak future for the United States if it does not quickly get its financial house in order. House Speaker Nancy Pelosi is among those who have reportedly read the document.

The document is being called the “C & R” document because it reportedly states that if the United States defaults on loans and debt underwriting from China, Japan, and Russia, all of which are propping up the United States government financially, and the United States unilaterally cancels the debts, America can expect a war that will have disastrous results for the United States and the world. “Conflict” is the “C word” in the document.

The other scenario is that the federal government will be forced to drastically raise taxes in order to pay off debts to foreign countries to the point that the American people will react with a popular revolution against the government. “Revolution” is the document’s “R word.” The origin of the document is not known, however, its alarming content matches up with previous warnings from former Comptroller General David Walker who abruptly resigned as head of the Government Accountability Office (GAO) in February of this year after repeatedly publicly warning of a “financial meltdown” disaster if America’s $9 trillion debt was not addressed quickly. Financial experts have warned that the national debt, corrected for inflation, could reach $46 trillion in the next 20 years. A month earlier, Walker warned the Senate Banking Committee about the reaction of creditor nations in Asia and Europe if the U.S. did not address its debt problem.

Job loss continues to soar

Posted by patriot on April 4th, 2008

The writing on the wall continues to say recession:

U.S. employers slashed jobs for the third straight month in March and unemployment rose to a nearly three-year high, offering the latest signs that the economy has fallen into a recession.

The Labor Department’s much anticipated report showed a net loss of 80,000 jobs last month. That marks the third straight month that jobs have fallen - the longest period of decline since early 2003.

Economists surveyed by Briefing.com had forecast that payrolls would fall by 50,000 in the latest reading.

The new report also pegged job losses in January and February at 76,000 each month.

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