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Media Still Insists We Are In A Recession

Hope springs eternal in the breasts of our media.

One sample from Reuters:

Former Fed chief says U.S. now in recession

SINGAPORE (Reuters) – Former Federal Reserve Chairman Paul Volcker said on Tuesday the U.S. housing sector faced more losses and the economy was in recession even as authorities moved to stabilize the financial system.

Volcker said the priority for U.S. authorities in the credit crisis was to stabilize the financial system even though that meant heavy government intrusion.

“The first priority is to stabilize the financial system. It is necessary even though the cost involved is heavy government intrusion in markets that should be private,” he said in a speech at a seminar in Singapore.

“House prices in the U.S. are still declining. There are still more losses to come there. The economy, I believe, is in recession.”

Volcker is chairman of the board of trustees of the Group of 30, an international body composed of central bank governors, leading economists and private financial sector experts.

He is credited for battling double-digit inflation that flared in the 1970s.

He was chairman of the U.S. central bank between 1979 and 1987, before handing the reins over to Alan Greenspan, and oversaw a sharp increase in interest rates to quell the price pressures…

“It’s something we have to worry about when we get out of this recession.” …

“I have been around for a while. I have seen a lot of crises but I have never seen anything quite like this one,” Volcker said.

“This crisis is an exception. I don’t think we can escape damage to the real economy.”

And another from the Agence France-Presse:

Recession fears overshadow markets upsurge

BERLIN (AFP) – Gathering storm clouds cast a pall Tuesday over efforts to combat the global financial crisis despite an upsurge in markets, with two of Europe’s biggest economies said to be on the brink of recession.

While stock exchanges enjoyed sharp rises off the back of stimulus packages and pledges to shore up banks in Europe worth more than a trillion euros, downbeat data highlighted how the turbulence had affected jobs and growth.

A downgraded forecast from the Bank of France, which predicted growth would drop to minus 0.1 percent in the third quarter, showed the country was heading into recession after a 0.3 percent contraction in the previous three months.

And a group of leading economic think-tanks in Germany said that Europe’s biggest economy was likely to grow only at around 0.2 percent in 2009.

“In the autumn of 2008, the German economy is on the brink of a recession,” the six institutes wrote in their latest economic outlook.

Germany’s closely watched ZEW economic indicator also plunged by 21.9 points in results gathered in the heat of the international financial crisis.

In London, figures from the continent’s other major economy showed Britain’s inflation rate surged to a 16-year high point of 5.2 percent in September.

The figures took the shine off bounces in stock markets which all lapped up announcements Monday from countries in the single currency eurozone that they would make a total of 1.8 trillion euros available to shore up banks…

Banks and other financial institutions across the world have been hit by bad debts stemming from the granting of so-called subprime loans to house-buyers in the United States who subsequently defaulted…

It’s funny though, since the Dow and other market’s have recouped some of their recent losses our media has started to soft-pedal their Depression talk.

Of course just give them a few days and it will be back.

After all, they have got to get Mr. Obama elected. And they don’t care what they have to do or say to accomplish that noble feat.

This article was posted by Steve on Tuesday, October 14th, 2008. Comments are currently closed.

9 Responses to “Media Still Insists We Are In A Recession”

  1. 1sttofight says:

    The truth is, the tree killing paper news media is in a depression. Bleeding subscribers at an alarming rate along with ad revenues, laying off employees by the thousands.

  2. EvaTheFrisbeeDog says:
  3. EvaTheFrisbeeDog says:

    Volcker is an Obama supporter, of course he going to say that.

    What we just experienced is a financial crisis brought on by TOO MUCH REGULATION (Are you listening John McCain?). The fundamentals of the underlying economy are sound.

    The Fed’s infusion of liquidity, the change in mark-to-market accounting rules, and the suspension of IRS rules that tax US multinationals when they use their own money held off-shore in lieu of short term commercial paper will undoubedly help.

    Now follow this closely:

    Roughly 4% of the $10.5 trillion mortgage market is in default, which includes 25% of sub prime that is in foreclosure. If a foreclosed mortgage can be liquidated for 50 cents on the dollar by selling the underlying real estate, and only 4% of mortgages are in default, then mortgage backed securities (MBS) should be priced close to 95% to 97% of their face value. Of course specific tranches may be valued lower, but across the entire mortgage market, 95% to 97% are currently performing. Yet, Merrill Lynch sold their MBS portfolio at 22 cents on the dollar. Complete idiots! Now they’re part of BofA.

    In my humble opinion, the market is not reacting rationally. It may be that many traders just don’t understand these complex instruments, and it doesn’t help that Wall Street is in New York, a market that has underperformed pretty much the rest of the country with the exception of most of California and parts of Nevada, Arizona, Florida, and Ohio. The atmosphere in Manhattan is toxic and contagious, and this bleeds into the markets.

    Once the market figures this out, and they may have already, it’s gonna come back.

  4. Odie44 says:

    From the same Fed Chief who oversaw the blatant fraud and meltdown of our markets.

    I don’t have the energy to even explain what a true reccession is…

  5. Odie44 says:

    When in doubt – leave it up to financial “experts” to do a few things: 1) pile up excuses, that were evident before the meltdown. France and Germany have been in a recession for 8 straight quarters, 2) consideirng the actual defaulted subprimes is eclipsed 10 fold by piggy backing “investment vehicles” – they knew damn well the result. For every $1 in subprime losses, secondary and tertiary instruments equal $10 of losses. 3) markets don’t go up infinately, in fact the must go down and level off. 4) greed is not good Mr Gecko.

  6. 1sttofight says:

    Have yall ever noticed how many times economist have been mistaken in their forcasts?

  7. Odie44 says:

    Economists dont have a clue, because if they did – we would proactively anticipate these things and act accordingly. I think the ignorance of the SEC and NASD is far worse – it is their job to regulate and oversee the markets – yet stand around looking foolish as the trillions of dollars get “lost” , each 10 year scandal (S&L, dot.com, etc) – then in a verbose moment – attempt to reassure people with the same empty oversight AFTER the fact.

    Ironically – for every “sell” there is a “buy” and vice versa. Money just doesnt magically disappear – but when you allow people to naked sell short – its a phantom transaction that should never be allowed in the first place.

  8. Lipstick on a PIAPS says:

    There is an old adage in Wall Street that the stock market prices in what they think will happen 6 months ahead! So if the market fell to 7900 the lowest since 2003 during the launch of the Iraq war are they pricing in an Obama victory?!? 6 months from now would be April 2009, Taxtime for the US. Things that make you go hmmm………………. LMAO.

  9. BillK says:

    Note the phrase the MSM is using more and more lately – “it certainly feels like a recession.”

    They use it in news stories, happy banter between anchors and in print pieces when talking to “people on the street.”

    It’s the usual “OK, the technical term doesn’t apply, so we’ll just make sure people believe it’s true.”

    Stop for a moment and ponder – a phrase I’ve heard several times is people saying they were going to buy something and have the money, but they don’t know if they should because others are hurting.

    Given consumer spending is the majority of our economy, you see how the media can now create recessions at will.


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