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The Washington Times
For Congress, the outlines of the pending fiscal crisis are clear: Don’t do a thing, and watch the economy slip into a double-dip recession early next year. Or cancel the looming tax increases and spending cuts, watch the deficit rise, and push the government ever closer to a European-style debt crisis. That decision was put in stark terms Tuesday by the Congressional Budget Office, which in a new analysis said the [...] The head of the International Monetary Fund has warned that the eurozone crisis could prolong the UK’s recession while urging the Bank of England to take action to boost growth and reduce unemployment. In a report on the UK, the IMF warned that an escalation of the eurozone crisis would deliver a “substantial contractionary shock” to the UK economy, setting back progress made towards recovery. Britain entered a double-dip recession during the [...] The International Monetary Fund said Britain requires further monetary easing to boost the economy and Chancellor of the Exchequer George Osborne should consider budget stimulus including temporary tax cuts. “Fiscal easing and further use of the government’s balance sheet should be considered if downside risks materialize and the recovery fails to take off,” the Washington-based lender said in its annual review of the U.K. published today. “In particular, if growth does [...] The latest official figures expected this week for growth and price rises may show signs of ‘stagflation’ – a disastrous combination of economic stagnation and high inflation. Such a mixture of slump and rising living costs, coming soon after the first double-dip recession since 1975, would suggest there might be a return to the calamitous economic performance of the Seventies. It had been hoped that last month’s first estimate of growth in [...] The British government is making urgent preparations to cope with the fallout of a possible Greek exit from the single currency, after the governor of the Bank of England, Sir Mervyn King, warned that Europewas “tearing itself apart”. Reports from Athens that massive sums of money were being spirited out of the country intensified concern in Whitehall about the impact of a splintering of the eurozone on a UK economy that is [...] From Bloomberg: Spain is underestimating potential losses by its banks, ignoring the cost of souring residential mortgages, as it seeks to avoid an international rescue like the one Ireland needed to shore up its financial system. The government has asked lenders to increase provisions for bad debt by 54 billion euros ($70 billion) to 166 billion euros. That’s enough to cover losses of about 50 percent on loans to property developers and construction firms, according [...] By Jeremy Warner
With Europe plunging back into recession and unemployment soaring, Francois Hollande, Angela Merkel, the German Chancellor, has meanwhile continued to insist that on the contrary, Europe must persist with the hairshirt. What’s needed is political courage and creativity, not more billions thrown away in fiscal stimulus. Stick with the programme, she urges, as the [...] By Patrick Martin US economic growth slowed in the first quarter of 2012, with gross domestic product rising by only 2.2 percent, according to figures reported by the Department of Commerce Friday. The figure was well below the consensus forecast of 2.6 percent among corporate economists surveyed by Dow Jones Newswires. The figure suggests that job creation in the United States will remain in the doldrums, and that the unemployment [...] From Zero Hedge: Few have been as steadfast in their correct call that the US economy sugar high of the first quarter was nothing but a liquidity-driven, hot weather-facilitated uptick in the economy, which has now ended with a thud, as seen by the recent epic collapse in all high-frequency economic indicators, which have not translated into a market crash simply because the market is absolutely convinced that the worse things get, the [...] by Tim Price, Director of PFP Wealth Management and Sovereign Man contributor Guest Post: What Is The Consequence Of Printing Money That Nobody Wants? In a week that saw Britain slide into its first double-dip recession since 1975, we quite fittingly also saw evidence of the sort of insular bigotry and protectionist narrow-mindedness that one associates with that same ugly, painful decade, when Barry Sheerman, Member of Parliament, said: “I’m getting increasingly worried about the [...] Bill Gross of PIMCO spoke to Bloomberg TV’s Trish Regan this afternoon and said that he is doubtful of another round of quantitative easing in June, but “if we see some weak employment reports over the next two months, then QE3 is back on.” He also said that there’s a risk of a double-dip recession “if liquidity disappears.” April 25 (Bloomberg) — European lenders, more reliant than ever on emergency aid after borrowing $1.3 trillion from their central bank, may need additional cash infusions until policy makers stem the crisis engulfing Spain and Italy. After more than 30 bond sales in the first quarter, no bank has sold unsecured debt this month, and the cost of insuring against default has soared to levels last seen in January. Financial stocks, [...] Guardian Europe‘s sovereign debt crisis exploded back into life on Tuesday, with markets across the continent rocked by a wave of panic selling amid renewed fears about the impact of savage austerity measures in Spainand Italy. The mood of uneasy calm seen across Europe since the Greek bailout in February was shattered as financial markets took fright at evidence of a double-dip recession and growing popular opposition to welfare cuts and tax increases. Italy and [...] From this article, it also appears they are planning to close down American plants too and relocate to Eastern Europe and Asia: The Government has made a last-minute appeal to the car-maker GM not to close its Vauxhall plant in Ellesmere Port, Cheshire, in an attempt to prevent the loss of the 2,100 jobs there. Vince Cable, the Business Secretary, returned yesterday from a flying visit to New York, where he pleaded [...] NEW YORK (CNNMoney) — While most economists have stopped worrying that the U.S. will fall into a double-dip recession, one influential economist maintains his position that the nation won’t be able to avoid a new downturn. Lakshman Achuthan, co-founder of the Economic Cycle Research Institute, said on Friday that his research firm is sticking with the forecast it made in September: A new recession is inevitable, despite improvement in high-profile economic indicators, [...] Telegraph The fresh crisis in Britain’s factories dealt a blow to the Coalition, which has pinned its hopes for recovery on UK industry. Photo: REUTERS The UK shrank 0.2pc in the three months to December against expectations of 0.1pc, according to figures from the [...] How does the current recovery compare to those of the past? The following charts from the Council on Foreign Relations puts the current (un)recovery in context and despite some apparently bright news recently, the pictures underline the economy’s weakness since the NBER’s recovery began in June 2009.
The x-axis shows the number of months since the end of the recession. The dotted lines are composites of prior recoveries representing the weakest and strongest experiences [...] From Telegraph: The Organisation for Economic Development and Cooperation (OECD) is predicting that the economy will shrink, the Government was warned on Thursday. Whitehall sources said the forecasts suggest that growth would be negative during the first six months of next year due to the euro crisis. The prediction, to be published on Monday, is the first from a respected forecaster to indicate that Britain faces a double-dip recession. The preliminary findings of the [...] ONLY ON BLOOMBERG TELEVISION: Pacific Investment Management Co.’s Chief Executive Officer Mohamed A. El-Erian told Bloomberg TV’s Betty Liu and Dominic Chu this morning that U.S. economic conditions are “terrifying” as the nation struggles to recover from recession. El-Erian also said the odds of the U.S. returning to recession are as high as 50%. **SEE BELOW FOR TRANSCRIPT.** **BLOOMBERG TELEVISION** On the U.S. going into a double-dip recession:
“I am worried. We’ve had [...] Published: Sunday, 13 Nov 2011 | 1:09 PM ET The window of opportunity to save the euro is rapidly closing, as the sovereign debt crisis erodes the solvency of Europe’s banks and drives up borrowing rates for even once rock-solid countries like France. On Saturday, the crisis swept away another leader, when Prime Minister Silvio Berlusconi resigned after 17 years of dominance in Italian politics to the jeers and [...] From Telegraph: The EU-IMF bail-out machinery would require an extra €250bn or more to stabilize eurozone debt markets, forcing Germany and EU’s creditor states to vastly increase rescue commitments. The report, due Friday, said a double-dip recession would lead to a downgrade of “one or two notches” for France, Spain, Italy, Ireland and Portugal, both because of tumbling tax revenues and the extra costs of propping up banks. The scenario looks increasingly likely [...] By Phil Izzo Americans’ access to basic necessities is at recession-level lows, according to a poll released by Gallup. Gallup’s Basic Access Index score fell to 81.4 last month — on par with the 81.5 measured in February and March 2009. The polling firm’s index looks at 13 basic necessities that includes health, food, shelter and safety from crime. Access to health care and food are down the most since September [...] Tonight, October 11th at 8pm ET, Bloomberg Television will present the first economic debate of the primary season, presented by Bloomberg and The Washington Post in partnership with WBIN-TV and host Dartmouth College.
With the nation facing sustained high unemployment as well as concern over deficits, weak growth and a possible double-dip recession, the Bloomberg/Washington Post debate will devote the entire program to a substantive exploration of the candidates’ specific plans [...] FOX Business: The Power to Prosper.DJIA-DI,USD,NORM Wall Street celebrated Columbus Day with a 330-point buying binge on the Dow as traders around the world breathed a sigh of relief that European leaders pledged to bolster their banks and the markets look ahead to the start of earnings season. Today’s Markets The Dow Jones Industrial Average soared 330.06 points, or 2.97%, to 11433.18, the Standard & Poor’s 500 jumped [...] From FT: The Chinese government will boost its stakes in the country’s largest banks, as it attempts to shore up slumping financial stocks and to restore investor confidence. Central Huijin, the domestic arm of China’s sovereign wealth fund, will purchase shares in Agricultural Bank of China, Bank of China, China Construction Bank and Industrial and Commercial Bank of China, the official Xinhua news agency announced on Monday. Xinhua [...] Next Tuesday, October 11th at 8pm ET, Bloomberg and The Washington Post, in partnership with WBIN-TV and host Dartmouth College, will present the first debate of the 2012 campaign focused solely on the economy. With the nation facing sustained high unemployment as well as concern over deficits, weak growth and a possible double-dip recession, the Bloomberg/Washington Post debate will devote the entire program to a [...] By Greg Robb WASHINGTON (MarketWatch) – President Barack Obama on Thursday cast his jobs bill as insurance against a double-dip recession and urged Congress to pass the measure swiftly. “If we don’t take action, we could end up having more significant problems that we have now,” Obama said at a news conference. Obama said the European debt crisis posed a serious threat to the recovery. [...] By William L. Watts FRANKFURT (MarketWatch) — Europe faces a rising risk of a double-dip recession amid deteriorating business sentiment in European markets and an expected slowdown in U.S. economic growth, Standard & Poor’s Ratings Services warned Tuesday. “We now estimate the probability of a new recession in western Europe next year at about 40%, although in our baseline forecast we continue to anticipate sluggish [...] Bloomberg The rout that erased $2.9 trillion from U.S. equities has pushed valuations in the Standard & Poor’s 500 Index 25 percent below the average level from the last nine recessions, even as profit estimates fall. Companies in the benchmark gauge for American equities trade at 10.2 times 2012 forecast earnings, compared with the average in economic contractions since 1957 of 13.7, according to data compiled by Bloomberg. At the same time, [...] |
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