World economy talk

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this is the safe haven currency

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US gdp report 8:30

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US Q2 gdp 1.3% below expected 1.8%

Q1 gdp revised to .4% from 1.9%

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Double dip not far behind?

Recession risks up amid slow growth, debt standoff - Yahoo! Finance

WASHINGTON (AP) -- The economy is at risk of slipping into another recession.

It nearly stalled in the first six months of the year, the government reported Friday. Economic growth was feeble in the second quarter and practically non-existent in the first.

The new picture of an economy far weaker than most analysts had expected suddenly made a second recession a more serious threat -- and the threat will rise if Congress can't reach a deal to raise the government's debt limit.

"The only question now is, how much weaker could things get?" says Nariman Behravesh, chief economist at IHS Global Insight.


Joel Naroff of Naroff Economic Advisors says he's waiting until the debt-limit deadline passes to revise his economic forecasts for the rest of 2011. He knows he'll scale back his estimates. He just doesn't know how much.

If a deal isn't reached for another month, Naroff estimates there's an 80 to 90 percent chance that the spending cuts would tip the economy into recession. Even if there is a deal, it would likely trigger significant spending cuts that would slow growth, at least in the short run.

"You kick the federal government, and the economy is going to be doubled over in pain," Naroff says.

Federal Reserve Chairman Ben Bernanke and other economists have warned Congress against cutting too much too soon because the economy remains so fragile.

The economy needs to expand so it can create jobs for a growing population. It must grow at a 2.5 percent annual rate to keep the unemployment rate from rising and at a 5 percent rate to bring unemployment down significantly.

In a Twitter message, economist Justin Wolfers of the University of Pennsylvania's Wharton School said he thinks there's a 40 percent chance the economy has already been in a recession for the past four months.

Normally, when the economy is this weak, the government spends more and the Federal Reserve aggressively tries to stimulate growth. But President Barack Obama's $862 billion stimulus package of spending programs and tax cuts ran out last year -- and won't be revived by a Congress focused on cutting government debt.

And the Federal Reserve last month ended a $600 billion bond-buying program designed to jolt the economy by lowering long-term interest rates and lifting stock prices.

The Fed is keeping short-term interest rates near zero, and Bernanke this month said the Fed is prepared to do more if the economy remains weak. But the central bank has been more worried recently about a resurgence of inflation.

The private sector hasn't picked up the slack. The housing industry, which usually drives economic recoveries, is still depressed after home prices started tumbling in 2006 and 2007.

Americans are still carrying heavy debts, and what little gains they've made in wages have been eaten up by higher gas and food prices. Businesses, getting more work out of staffs downsized during the recession, are reluctant to hire until they're sure their sales will pick up.

"What business is going to hire into the unknown?" Naroff says.

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from the article above:

Normally, when the economy is this weak, the government spends more

my point exactly a few posts back

but there's a lot of talk about cutting spending

now isnt the time for the USG to cut spending

[Ry_Tower]

from the article above:



my point exactly a few posts back

but there's a lot of talk about cutting spending

now isnt the time for the USG to cut spending

Oo nga kasi hindi pa healthy economy nila at kelangan pa ng more jobs generation. Kaso mukhang madedelay talaga sila.

[tidus1203]

I am anti-Keynesian so IMO government spending doesn't work anyway to lift the economy meaningfully (as we have seen this past 2 years). Besides governments are epitomes of in-efficiencies and waste. Dapat gawin nila just give tax breaks to companies who HIRE. Tapos me being a supply sider I believe instead of raising tax rates, just increase the tax base...

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US 10 yr yield

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if the debt ceiling isnt raised, there won't be enough money to pay all USG obligations

JUST SOME

[ame]www.youtube.com/watch?v=1ivDoTd8Zm8[/ame]

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Wall St., Prepared for the Worst, in Wait-and-See Mode - NYTimes.com

Wall Street executives and traders will spend the weekend holding their breath

Contingency plans are in place, positions established and cash sidelined

Bank of America... commissioned a team to study the impact a default might have on customers and the broader economy

Other banks have dispatched executives to Washington to meet with members of Congress and regulators

some of the biggest dealers in Treasury debt — Goldman Sachs and JPMorgan, among others — spent Friday morning with officials at the Federal Reserve of New York

Some hedge funds are going to cash, parking money on the sidelines in case things go haywire

Others are keeping cash with their prime brokers