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« Parabola Hyperbole | Main | The Truth about Savings »

June 05, 2007

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Bill aka NO DooDahs!

http://theroxylandr.wordpress.com/2007/03/06/goldilocks-have-bad-productivity/
"Just relax and prepare yourself for the recession." - from 3 months ago.

http://theroxylandr.wordpress.com/2007/01/24/the-recession-call/
"Here I would like to join those very few who predict that a recession will happen sometimes this year." - from 5 months ago. LOL on the "very few" line, bears like to pretend they're all alone.

http://theroxylandr.wordpress.com/2006/12/07/about-first-day-of-recession/
Said we had 3 months before the recession, worst case, and that was 6 months ago. Later updated to say we wouldn't have a recession before April.

http://theroxylandr.wordpress.com/2006/08/01/bushnomics-heading-to-recession/
The title says it all, from 10 months ago.

Cheers!

Steve

theroxylandr,


Be honest. How long have you been saying that?

theroxylandr

I totally agree that yield curve will invert back before we get into recession. It could take another 2-3 months before that happens, it's not so fast.

So, if anyone think that we'll have a recession in just a few weeks - no, we will not.

oldprof

Barry --

The White House forecast for the year is now 2.3%. Since the first quarter is already in the books at .6%, that means the average for the rest of the year has to be almost 2.9% (the original forecast).

Let's put the question this way: If GDP growth rebounds during the rest of the year, making Q107 the low point of the cycle, most will say that growth is recovering. Would you still call it "decelerating"?

Any period that includes Q1 is going to look weak.....

Barry Ritholtz

It looks like the White House is joining those who see the economy decellerating: They just lowered their forecast for economic growth this year even as it slightly upgraded its outlook for unemployment.

Under the administration's new forecast, gross domestic product, or GDP, will grow by 2.3 percent as measured from the fourth quarter of last year to the fourth quarter of this year. That's down from a previous projection of 2.9 percent.

oldprof

Barry,

Thanks once again for stopping by to make sure that I reflected your viewpoint accurately.

I was really just trying to add a factor to your excellent list of fundamentals. Many investors see solid strength in the low jobless claims, unemployment rate, ISM manufacturing and services reports, and consumer confidence. The 1st quarter GDP and last quarter's railroad revenues are old news for bond traders.

So -- even if you are correct in your long-standing opinion about economic growth, the market is bigger than any single pundit.
Those who do not share your viewpoint about weak economic prospects for the US economy are undoubtedly among those selling bonds.

Thanks again,

Jeff

oldprof

Steve -

The mortgage and PCE chart was widely publicized by Doug Kass, but I get the feeling that he did not actually create it.

The chart used here also happens to come from Kass, but it is an example of something that many people do.

Thanks,
Jeff

RB

The inverted yield curve based on the Wright model using 90-day average of bond yields did not predict a recession.

Barry Ritholtz

This is a perfect example of why I do not think the economy is so robust:

Sector Snap: Rails Down on Freight News
http://www.chron.com/disp/story.mpl/ap/fn/4866624.html

Shares of the nation's largest freight railroad operators traded lower on Wednesday, after an executive at eastern carrier Norfolk Southern Corp. reported that its freight volumes so far this year are down nearly 4 percent.

Shares of Norfolk Southern fell $1.13 to $56.84 in midday trading, while shares of eastern rival CSX Corp. retreated 99 cents, or 2.2 percent, to $44.94. Shares of Union Pacific Corp., the nation's largest railroad, gave up $1.58 to $119.40 and shares of its rival in the west, Burlington Northern Santa Fe Corp., fell $1.72 to $91.18.

The activity came after Norfolk Southern Executive Vice President Don Seale told analysts earlier in the morning that economic headwinds continue to affect its freight volumes.

Seale said in a Webcast he agreed with popular sentiment that says the U.S. economy currently lies "somewhere between resumed growth and recession." He said freight volumes at Norfolk Southern so far this year are down nearly 4 percent.

Barry Ritholtz

Its not that I don't "like to acknowledge it," its that I simply do not find much strength in the US economy -- most especially when compared with Europe and Asia.

The 2nd Q looks better than Q1, but thats onluy by dint of the pathetic 0.15% growth for the Q (0.6% annualized).

We should see some inventory rebuild, and exporting manufacturers are doing well thanks to global demand and the weak dollar.

But Housing remains a drag, and as we have seen from the Retailers, consumers are starting to tire.

Steve

Was it Kass who made that mortgage tightening vs. PCE chart?

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