Re: Who says we're not headed for a recession?

This guy should check his data before writing such nonsense. Go back to every recession we have had since, say 1950. What is the ocmmon thread? The common thread is, they were all caused by actions taken by the Federal Reserve Bank....

"jimstevens" <jimstevens@xxxxxxxxxxxxxxxxx> wrote in message news:il575312dpf28ias23bimh42lil5eranlf@xxxxxxxxxx
RWIN KELLNER
Signs of the times
Commentary: Who says we're not headed for a recession?
By Dr. Irwin Kellner, MarketWatch
Last Update: 8:51 AM ET May 22, 2007
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B133F9673%2D3DAC%2D4F02%2DA25B%2D2F5B1FD631F3%7D&siteid=nwtpm
HEMPSTEAD, N.Y. (MarketWatch) -- If it walks like a duck and quacks
like a duck, it must be a duck. Same goes for the economy.
The gross domestic product may be rising, but from all appearances,
the economy seems to be in a funk.

Both anecdotal and statistical evidence suggest that the slowdown
that's been in evidence for more than a year (see last week's column)
could worse before it gets better. See earlier column here.

People living in the "real" world think things just don't seem to be
right. While the University of Michigan's index of consumer sentiment
rose to 88.7 in early May from 87.1 in April, it's still well below
readings in the 90s posted every month from last October through this
February.

Blame it on four factors that affect everyone's lives: food, energy,
health care and housing.

I wrote back on April 17 that while the pundits may be fond of
removing food and energy from the price indexes to uncover what they
believe is the "core," or underlying, rate of inflation, consumers, as
the headline said: "...feel all inflation, not just the core number."

And as anyone who has purchased gasoline or food lately will tell you,
prices keep going up, up and away while their incomes remain stagnant.
Health care is another issue.

Employers seem to have gotten their arms around these costs. See May 8
column here.

But it's been largely at the expense of their employees, who have to
shoulder more of their health care costs, either through reduced
insurance coverage, higher premiums or both.

And while the popping of the housing bubble seems to have affected
mainly those on the low, or sub prime, end of the market, it has
actually hit many more families, since people can no longer count on
rising home values to add to their wealth -- not to mention to their
buying power.

Don't forget, the national savings rate's been negative for two years,
now, the longest skein since the Great Depression.
All this real world angst is showing up in some rather reliable
economic indicators.

For one thing, the yield curve's been negative for almost a year. In
the past, when short-term rates have been above long-term rates for
this long a period of time -- and by as much as they have been -- the
economy soon dived into a recession. See April 3 column here.

Then there are the leading indicators. When the 12-month percentage
change in the Conference Board's index is negative, it means a
recession is nigh -- at least that's what happened before every one of
the six previous recessions.

Guess what, the 12-month change in this index has been negative all
this year.

You say you want more evidence that bad times lie ahead? How about the
age of this expansion: it's now in its 66th month -- nine above the
postwar average. As you know, trees don't grow to the sky and people
don't live forever.

The economists who participate in the monthly Blue Chip survey think
there's only a 25% chance of a recession starting in the next 12
months.

If this doesn't scare you, wait until some magazine runs a cover story
proclaiming that a recession is nowhere in sight. End of Story

.

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