Second Recession This Summer?

[Slamz]

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• Achuthan denies that he is taking a bearish view of the economy, saying that when others worried about a double-dip recession risk in the fall of 2010, he saw no signs of a downturn at that time.
  
  But more than 50 years of economic data followed by his firm has shown him that when underlying growth slows to this degree, a recession always follows.

CNN calls it "double dip" but Achuthan says it's not a double dip -- it's just a second recession (we got out of the last recession, albeit not to the degree some had hoped).

[Vanraw]

Could happen, might not :-) ... Some of these guys are like sooth sayers. Every once in a while they are right...

Consumer confidence is great, but durable goods, and housing cost are still trying to get back on their feet.

If gas goes to $5 I would place bets on a recession. If not I think its going to be an ok year. That means its all about Iran, in my opinion.

Watch for Obama to release oil reserves to try and help control cost if Iran keeps heating up.

Also I think oil might become the next bubble. Alot of money in oil right now just stock piling it in the form of futures in the hope of an Iran crisis.

[amins]

Out of curiosity, does anyone believe we're in a bubble?

Possibly even 2?

1) Bonds.
2) Commodities.

[Slamz]

I still claim there's a "government bubble" that may pop.

$15 trillion GDP
$1.5 trillion government deficit that, in my opinion, is being used to prop up the economy

If, for any reason, we are forced to balance the budget, then that's a pretty huge amount of money to suddenly take out of the economy. If there is a second recession then that's certainly not going to do the deficit any favors. I believe the idea is we slowly back off the deficit spending as the economy recovers and I dunno what the plan is if there's a second recession. Considering how high our deficit spending already is, I have to imagine that "increased deficit spending" is off the table for dealing with another recession. What are we going to do? $3 trillion yearly deficit? I can't imagine.



Although I guess "bond bubble" and "government bubble" is the same thing. If people suddenly lose interest in buying US government bonds then our ability to do all this deficit spending will crash and take the economy with it.

[Vanraw]

Out of curiosity, does anyone believe we're in a bubble?

Possibly even 2?

1) Bonds.
2) Commodities.

They are both the same thing right? I mean QE caused them both. For sure Commodities, caused mostly by QE. Bonds sort of a inverted bubble....

I think commodities are a time issue (except for oil), meaning time will correct it. When i think of a bubble, i think of something that will colapse. I dontnthink we are going to see a massive deflation cycle.

[amins]

I could see a pull back in the bonds, w/ overeaction & speculation involved fueling your Oil & Gas (energy too maybe?) spike this summer.

[Breand]

commodities are not in a bubble...the indexes would be much higher if they were. Bonds...maybe. To me the most obvious bubble is the student loan market.

[Vllad]

From a Surface perspective this summer is cranking out the volume. Their is no recession looming. Volume is too big.

[Vanraw]

Yea thats what it looks like to me too. Interesting stuff on the shipping front though. I was concerned with UPS warnings.

GDP has growth, though slow, so recession at leaset in the next 2 quarters is unlikly.