Back of the envelope analysis:UE rate is now 6.7%.Almost certain to rise over next couple of months.Probably at 7% early in '09.The most optimistic estimates have recession ending about halfway thru '09.Stimulus program heavy on public works will be slow to implement.In recent recessions, UE has continued to rise for at least a year afterward.So a fairly optimistic scenario would have UE rising to 8% by YE '09 and staying there for a year.
Look who's getting more and more optimistic. Bloomberg: The U.S. economy probably will emerge from the recession by September, Nobel Prize-winning economist Paul Krugman said. “I would not be surprised if the official end of the U.S... Read Post
Deflation is coming In going thru old research I found a note from Dave Rosenberg in March of '08, where he discusses Bernanke's decisions on rate cuts and points to his speech from 2002 on deflation as a road map for his options. A... Read Post
Is the Fed Getting Ready to Tighten? Officials say no. But there’s a lot of speculation that the rise in the discount rate presages further action. Let’s hope that this is wrong. It’s worth noting that after the 2001 recession, the ... Read Post