Double-dip recession fears are growing

I

irvinebullhousing_IHB

New member
A double-dip recession is a downturn that technically ends, but is followed by a fleeting period of growth and another period of economic declines.



How likely will this happen and what does it mean to residential real-estates from hitting the bottom time frame? Specifically in Irvine?



Do you think we will likely see a back to back recession? This last happened nearly three decades ago, with the economy coming out of a minor recession in early 1980 only to be followed by a far more pronounced downturn that lasted from the middle of 1981 throughout the end of 1982.



Of course, things are a bit different from the early 1980s. This recession can hardly be considered minor. So if growth resumes later this year, it's tough to imagine how the dip would be worse than the initial plunge.
 
We've built a house of cards in the last year. If we do double dip, it's very easy to imagine the second dip being worse than the first.
 
[quote author="irvinebullhousing" date=1250658589]A double-dip recession is a downturn that technically ends, but is followed by a fleeting period of growth and another period of economic declines.



.......



Of course, things are a bit different from the early 1980s. This recession can hardly be considered minor. So if growth resumes later this year, it's tough to imagine how the dip would be worse than the initial plunge.</blockquote>


That's a big IF, where is the growth? Or a better question will be where is the sustainable growth other than government stimulus and transfers? The fact is consumers (70% of US GDP) are not spending



*saving rate is on it's way to 10%,

*consumer credit continues to drop,

*banks are still not lending because of those toxic assets on their books (fxxk TARP)



So where the top line revenue growth of US companies are going to come from? Of course, Uncle Sam can keep printing money and rolling out more stupid programs like cash for clunkers to stimulate "growth" in different sectors, how about cash for PCs, cash for furnitures, cash for appliances...etc. By doing that, they are killing the dollar, but I guess we will be fine as long as Chinese keep buying our T-bonds, but the fact is Chinese, Russian and Indians are reducing their dollar exposure by purchasing hard assets.



I've mentioned it once in my other posts, Fed/Treasury is joggling two tasks at once, they are trying to keep the stock market and dollar from falling apart at the same time, and they will fail both.



I beleive we are looking at not just a double dip recession but a multi-decade long Japan like recession (only thing different is Japan has a much higher saving rate at the time their RE bubble bursted).



We need to get an independent Fed chairman like Paul volcker to raise the rates and clean up this mess so we can have a fresh start
 
In my mind a double (triple, quadruple?) dip recession should be considered a single long recession punctuated with one or more dead cat bounces. As you say, the recession is "technically" over when GDP turns positive; nevermind the previous and future quarters of decline. +1% GDP growth before the end of the year will be of little comfort to the 12% "technically" unemployed (nevermind the many more who aren't counted based on fudgy government definition). When the dollar crashes and causes a smaller trade deficit, or even a surplus, our GDP growth might be great, but we may not feel very happy about it...technically.
 
When I think about a double/triple dip recesion, I visualize a 'step down' jump, like this:



<object width="325" height="250"><embed src="http://www.youtube.com/v/youtube" type="application/x-shockwave-flash" width="325" height="250"></embed></object>



Either way, who cares? The trend is downhill.
 
[quote author="BondTrader" date=1250662533] We need to get an independent Fed chairman like Paul volcker to raise the rates and clean up this mess so we can have a fresh start</blockquote>


Volker broke the back of inflation, and at the same time, broke the backs of anyone who had a business with a large asset base and any level of leverage. The farm crisis of the early 1980's lies squarely on his shoulders.



I'm not saying he did the wrong thing - I'm saying that his actions were not without collateral damage.
 
[quote author="no_vaseline" date=1250726342][quote author="BondTrader" date=1250662533] We need to get an independent Fed chairman like Paul volcker to raise the rates and clean up this mess so we can have a fresh start</blockquote>


Volker broke the back of inflation, and at the same time, broke the backs of anyone who had a business with a large asset base and any level of leverage. The farm crisis of the early 1980's lies squarely on his shoulders.



I'm not saying he did the wrong thing - I'm saying that his actions were not without collateral damage.</blockquote>


Point well taken :)
 
Until the Federal Reserve is abolished. The one thing you can count on is all this debt is not going anywhere. The more debt. The more the Federal Reserve Member Banks make.

The Central Bank has enslaved us.



<object width="325" height="250"><embed src="http://www.youtube.com/v/youtube" type="application/x-shockwave-flash" width="325" height="250"></embed></object>
 
You must log in or register to reply here.
Back
Top