U Shaped or Double Dip – Economic Risks Are Rising

U.S. Growth Outlook:  Still Anemic and U-Shaped but Risks of a Double-Dip Recession Are Rising
by Nouriel Roubini
A slew of poor economic data over the past two weeks suggests that the U.S. economy in 2010 is headed for – at best – a U-shaped recovery. The macro news, including data on consumer confidence, home sales, construction [...]

Paul Krugman says, We’ll be Repeating the Great Mistake of 1937

That 1937 Feeling
By PAUL KRUGMAN
Published: January 3, 2010
Here’s what’s coming in economic news:  The next employment report could show the economy adding jobs for the first time in two years. The next G.D.P. report is likely to show solid growth in late 2009. There will be lots of bullish commentary — and the calls we’re [...]

Wave of Debt Payments Facing U.S. Government

WASHINGTON — The United States government is financing its more than trillion-dollar-a-year borrowing with i.o.u.’s on terms that seem too good to be true.
But that happy situation, aided by ultralow interest rates, may not last much longer.
Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that [...]

Peter Boockvar Says, We have an “Illusion of Prosperity” – U.S. Economy to Lag Rest of the World

“It’s dangerous to be short this market,” says Peter Boockvar, equity strategist at Miller Tabak.Despite a penchant for bearishness, Boockvar says the rally can continue as long as the Fed keeps rates at zero.”When you cut rates to nothing you’re encouraging people to take risk,” Boockvar says. “As long as asset inflation is [the Fed's] [...]

James Galbraith Says, “A Truly Extraordinary Slump” – No Recovery

Disappointing reports this week on housing starts and foreclosures, as well as the index of leading economic indicators, have cast a bit of a pall on the “robust recovery” story, putting a crimp in the stock market’s ascent in the process.University of Texas professor James Galbraith was never a believer in the V-shaped recovery and [...]

A Big Crisis is Coming with America’s Weak Dollar Policy

The Dollar Index hit yet another 14-month low early Monday after a Chinese central bank official urged the PRC to diversify its reserves into more euro and yen. A stronger-than-expected GDP report in South Korea also put pressure on the greenback as traders expect other central banks to follow Australia’s lead and raise rates while [...]

John Mauldin Tax Hikes Will Kill the Recovery Which Isn’t Real Anyway

The economic recovery currently underway is a statistical mirage, based on easy year-over-year comparisons and inventory rebuilding, John Mauldin, president of Millennium Wave Securities, tells Henry in the accompanying video.The unemployment rate is closer to 12% when you include people who’ve been dropped from the survey and the “underemployment” rate – people working part-time vs. [...]

Why Our Massive Debt Will Kill Us in the End

Now that the worst of the recession is over, Americans are waking up to the fact that we’re borrowing nearly $1.5 trillion per year. Instinctively, this worries us.But why?What’s really so bad about piling on debt in excess of 10% of GDP every year?Japan has been borrowing through the nose for years, and Japan, well… [...]

Stephen Roach says, U.S. Consumer Deleveraging is Just Beginning

Stephen Roach: “The market is in for a rude awakening,” said the chairman of Morgan Stanley Asia, whose grim outlook seems to remain constant wherever he’s domiciled. “This will be an usually weak recovery,” Roach said. “The damage done to the system [will be] lasting – we are not even close to healing. It’s [...]

Here We Are Again – We Reached Dow 10,000 in March of 1999

Peter Boockvar, equity strategist at Miller Tabak, points out a lot has changed since the Dow first broke the magical 10,000 barrier in March of 1999.  While most other assets have gained value, the Dow is stuck in the mud.  Worse yet, we’re not even close to break even if you factor in the fact [...]