The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

Did Somebody Say ‘Double Dip’?

Posted on | June 25, 2010 | 8 Comments

Oh, yes they did!

Could a double dip in the housing market be on the way? That’s what influential banking analyst Meredith Whitney told CNBC’s Squawk Box yesterday.


Market analyst Barry Ritholtz explains:

The assumption has been that if we can modify mortgages or voluntarily refrain from foreclosures, the [residential real estate] market will stabilize. Through a combination of mortgage mods and buyers tax credits, the government has managed to — temporarily– create artificial demand and keep more supply off of the markets.
But as we have seen, that fix was at best temporary.
One of the things that Markets are best at is price discovery — the determination of a price for a specific item through basic supply and demand factors. Without the heavy hand of the government intervening, the residential real estate market is about to experience what price discovery is all about . . .

Jeff Cox of CNBC:

A slew of troubling market factors have collided to send investors looking for safety amid concerns that the economy may slip back into a deeper recession.
Fears of a double-dip have lingered throughout the recovery but have intensified recently as the economy shows little signs of robust improvement and Wall Street has witnessed a sharp trend higher in bond investing.

Ambrose Evans-Pritchard:

“We’re heading towards a double-dip recession,” said Chris Whalen, a former Fed official and now head of Institutional Risk Analystics. . . .
“The US recovery is in imminent danger of stalling,” said Stephen Lewis, from Monument Securities. “Growth could be negative again as soon as the fourth quarter. There is no easy way out since fiscal stimulus has already been pushed as far as it can credibly go without endangering US credit-worthiness.”

Brent Arendt:

Household debts are at record levels. We have begun a national process of paying down debt that will last for a generation, for the simple reason that it has to. Recent data suggest a rising risk of a double-dip recession, including the collapse of home sales and an ominous downturn in some forward-looking indicators.

Obamanomics isn’t working and the stock market is starting to notice:

Dow Jones industrial average lost around 145 points, or 1.4 percent. The S&P 500 lost 18 points or 1.7 percent and the Nasdaq composite lost 37 points or 1.6 percent.
Stocks fell after reports showed a still-tough environment for the manufacturing and labor markets and one day after the Federal Reserve sounded a cautious tone on the economy.
The Fed issued a cautious growth outlook Wednesday on the back of the day’s weak May new home sales report.

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Category: Economics

Comments

8 Responses to “Did Somebody Say ‘Double Dip’?”

  1. KingShamus
    June 25th, 2010 @ 11:52 am

    Strangely, golf courses in the Washington DC metro area are experiencing booming business.

  2. KingShamus
    June 25th, 2010 @ 7:52 am

    Strangely, golf courses in the Washington DC metro area are experiencing booming business.

  3. Joe
    June 25th, 2010 @ 5:56 pm

    I love watching CNBC at the gym. While Megyn Kelly and the girls at Fox are great…the women of CNBC are just downright sexy.

    It is like NBC gave all its mojo to CNBC and MSNBC…well it is the red headed step child of the family.

  4. Joe
    June 25th, 2010 @ 1:56 pm

    I love watching CNBC at the gym. While Megyn Kelly and the girls at Fox are great…the women of CNBC are just downright sexy.

    It is like NBC gave all its mojo to CNBC and MSNBC…well it is the red headed step child of the family.

  5. Estragon
    June 25th, 2010 @ 7:30 pm

    The EU is on the verge of collapse as German and French and UK taxpayers realize they don’t want to have to pay for the excesses of Greece, Spain, Portugal, and Italy, but with a unified currency they are stuck with doing so, and no way to truly force those welfare states to straighten up and manage their own finances.

    The dollar is only as strong as it is because the euro is under such pressure.

    Bush’s tax cuts are set to expire, creating in effect a huge tax increase as of January 1, 2011. Add to that all the wild spending by Obama, Pelosi, and Reid since The One took office, and we have a fiscal train wreck of our own coming down the tracks full throttle with no brakes in sight.

    China has been overstating their own growth forever, and has severe problems of their own in the domestic economy – which is essentially a kleptocracy dominated by the PLA. They could get away with grand theft as long as the export economy kept growing like gangbusters, but that is no longer the case.

    This might well be less the “second leg of a Double-Dip” and more the “introduction to Armageddon.”

  6. Estragon
    June 25th, 2010 @ 3:30 pm

    The EU is on the verge of collapse as German and French and UK taxpayers realize they don’t want to have to pay for the excesses of Greece, Spain, Portugal, and Italy, but with a unified currency they are stuck with doing so, and no way to truly force those welfare states to straighten up and manage their own finances.

    The dollar is only as strong as it is because the euro is under such pressure.

    Bush’s tax cuts are set to expire, creating in effect a huge tax increase as of January 1, 2011. Add to that all the wild spending by Obama, Pelosi, and Reid since The One took office, and we have a fiscal train wreck of our own coming down the tracks full throttle with no brakes in sight.

    China has been overstating their own growth forever, and has severe problems of their own in the domestic economy – which is essentially a kleptocracy dominated by the PLA. They could get away with grand theft as long as the export economy kept growing like gangbusters, but that is no longer the case.

    This might well be less the “second leg of a Double-Dip” and more the “introduction to Armageddon.”

  7. Obamanomics: Still Not Working : The Other McCain
    June 29th, 2010 @ 12:41 pm

    […] due a sharp drop in consumer confidence. This is being interpreted as a strong indicator of a double-dip recession.Timely advice from Rick Santelli:Somehow, this video also seems timely: var […]

  8. Ezra Klein Admits: ‘It Won’t Work’ : The Other McCain
    July 16th, 2010 @ 12:38 pm

    […] referring to a phrase that describes the economy falling back into recession.Wow, who could have anticipated a double-dip recession? How could anyone have foreseen the failure of Obamanomics?“The unfortunate truth, as sober […]