Archive for category Finance
Zero jobs for August reported in Friday’s monthly jobs report has economists concerned that the U.S. economy may be entering into a second recession. The economy grew at a rate of 0.7 percent in the first half of 2011, marking the lowest rate of growth since the “Old Recession” ended in June 2009.
The Obama administration estimated Thursday that unemployment will average about 9 percent through next year. This compares to a rate of 7.8 percent when Obama took office. Lagging job growth has prompted some economists to believe the economy is headed into a “New recession”.
Hank Paulson, former Secretary of the Treasury under George W. Bush, spoke with Dreadmonger reporters today. “We just don’t think there is a new recession brewing, and, if there is, we don’t believe it will compare to what we went through in 2008 during the Great Recession.”
Yale economist and consultant to Dreadmonger, Dr. Paul Grunder indicated that he believed “This ‘New Recession’ as we have termed it, will exceed the depths seen in the so-called “Great Recession’ of 2008. We firmly believe that we have already entered a recessionary period and that it will be deep and protracted.”
In response, Secretary Paulson said, “There are some who, in trying to be ahead of some ill-conceived ‘curve’ of economic opinion, will say that we have entered into a recessionary environment. In reality, we are far from the state of affairs we saw in 2008 that precipitated what all will agree to be the most difficult economic challenge this country has faced since the ‘Great Depression‘. And that is precisely why we have dubbed this period the “Great Recession’.”
Dr. Grunder replied, “The self-aggrandizement evident in the characterization and handling of the 2008 downturn spawned a media circus and unnecessary fear-mongering that did nothing but prolong this period of weakness in the U.S. economy.”
“‘Period of weakness?'” Paulson replied, “That’s the most ridiculous understatement I have ever heard. The economy was teetering on the edge of oblivion and we pulled it back. Through herculean efforts, I might add.”
“These so-called ‘herculean efforts’ that some have cited,” said Dr. Grunder, “were merely exaggerated fluff for media consumption, no doubt prompted by some of the principal’s literary agents.”
“See this…” said Mr. Paulson, making a rude gesture, “this is where this Yale professor can stick his ‘exaggerated fluff’.”
Dr. Grunder responded, “Well, I guess that demeanor is good for ex-Wall Street execs attempting to sell books but, I don’t believe it adds much to the real and substantive discussion that is being undertaken by serious economists in this tenuous environment.”
Dreadmonger is unable to print Mr. Paulson’s response in this family friendly publication.
- Double Dip Recession Or Year 5 Of 2007 Recession? (ritholtz.com)
- Recession? No. We’re In The Second Great Contraction (businessinsider.com)
- Questions and answers about the August jobs report (sfgate.com)
LONDON (Dreadmonger) – Global stock markets tumbled again this week as officials from Morgan Stanley lowered their forecasts for global growth for 2011 and 2012. An unnamed Morgan Stanley official, in an exclusive interview with Dreadmonger’s London Bureau, said, “This really sucks. We are close to running out of adjectives to describe how bad this sucks. No doubt.”
The spokesman for the brokerage firm went on to say that increasing commodity prices, a weakened dollar, and continuing political and social tensions around the globe combined to paint a bleak economic outlook for the next two years.
The spokesman said that both the U.S. and European economies are “hovering dangerously close to recession.” As a result, the firm has cut its 2011 global gross domestic product growth forecast to 3.9% from 4.2%, and its 2012 estimate to 3.8% from 4.5%.
Paul Krugman, Nobel prize winning economist and op-ed columnist for the New York Times, commented, “To say that the ‘economy sucks’ doesn’t really capture the gravity of the situation. I think these guys need to go back to the OED or something. This came out of the London office, right? Pitiful, really, that the vocabulary coming from this eminent financial institution has devolved to street language. It embarrasses us all and coarsens the discussion.”
The Morgan Stanley spokesman further commented on Mr. Krugman’s statement by saying, “Well, you can tell Mr. Krugman that Morgan Stanley says he sucks, as well. He’s the Nobel Prize-winning economist, isn’t he? If we go back to his forecasts, of, oh, say 2007, what do we see? And, how’s that Keynsian stimulus program working out for you, Paul?”
Krugman responded by telling Dreadmonger reporters, “What, some low-level PR guy from this esteemed issuer of countless Mortgage Backed Securities, this company that JP Morgan refused to take for nothing back in 2008, thinks it is in his purview to smear me, a Nobel Prize-winning economist and op-ed journalist for the New York Times, with his punk-a** gutter-language? Not likely.”
Dreadmonger is unable to print the response from Morgan Stanley to Mr. Krugman in this family friendly publication.
Dreadmonger will continue to closely monitor the story and provide updates as they become available.
- U.S. ‘dangerously close’ to recession – Morgan Stanley report (money.cnn.com)
- Morgan Stanley cuts global growth outlook (marketwatch.com)