Seems this guy is saying there is a possibility.


WASHINGTON -- Former Treasury Secretary Lawrence Summers said the threat of a recession in the United States is the greatest since the Sept. 11, 2001, terrorist attacks.

"I do not think we yet would have a basis for making a prediction that there will be a recession, but I will say that the risks of recession are now greater than they've been any time since the period in the aftermath of 9/11," Summers said yesterday on ABC's "This Week" program.

Summers, who served under President Bill Clinton, said it would be "premature to judge this [subprime mortgage] crisis over," in part because "we can't yet know that there aren't more shoes to drop in the financial area."


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I think we are overdue for one myself. Economic conditions are a bit to rosy .IMO.

If it weren't for the feds manipulation of the markets I'd say we would already be headed for one.

You are right. And I like pointing that out to others that this is NOT a free market econ0omy. If it were the Fed should not be involved in it, in any way.

According to the figures we are doing well as an economy. This is why you have to be an excellent manipulator of stats to be a good economist.


The US economy grew at an annual rate of 4% in the second quarter, a better performance than first thought.

Revised figures from the Commerce Department showed the economy fared much better than its initial forecast of a rate of 3.4%.

The rise, eclipsing the 0.6% growth seen between January and March, was due mainly to strong business investment.

But analysts believe the credit worries caused by the US housing slump will limit growth for the rest of 2007.


STORY

The economy grew but unemployment rates are going up. I've been reading a few reports that suggest that due to this latest credit problem that corporations may be faced with layoffs due to the tightening of credit. I look for a bit of a downturn in economic numbers myself in the next quarter.

Yep one company, has laid off 99% of its employees and there has been 40,000 total jobs lost because of the credit thing.

Another factor is this isn't just a U.S. problem. It's a global problem with the banking industry.

That is becdause these large hedge funds are funded internationally and they are feeling the crunch. Never fear the govt will step in and save the day for the wealthy investors.

There is only so much the feds can do with helping, short of a bailout which they have decided against so far. The housing lenders will need to do their part also. Americans living on credit is coming back to haunt them and I have no sympathy for them.

I love the weay they pickk and choose the data. OK, the average family income rose , but the individua's income dropped--and what do they report on? The family income because it is some good news. This is why I do do not like the economic reporting, it gives an unclear pic of the economy.

This is the speech delivered to the Fed meeting in Wyoming.


I'm pleased to have this opportunity to summarize what we have been hearing and reading at this conference and to offer my own thoughts about some of the implications for economic policy.

The housing sector is now at the root of three distinct but related problems:

First, a sharp decline in house prices and the related fall in home building that could lead to an economy-wide recession;

Second, a subprime mortgage problem that has triggered a substantial widening of all credit spreads and the freezing of much of the credit markets;

And, third, a decline in home equity loans and mortgage refinancing that could cause greater declines in consumer spending.


LINK

Seems the world is paying the price for the US bullsh*t.


The mismanagement of money and credit has led to financial explosions over the centuries. The causes, cures and consequences of such financial catastrophes are most often repetitive. Indeed, such financial collapses are usually the result of the unbridled greed and cupidity of financial operators and of the lack of necessary supervision by public institutions designed to protect the public and the common good. For example, after the October/November 1907 financial crisis in the United States, the idea initially advanced by banker Paul Warburg to establish a partially private and partially public Federal Reserve system of banking was finally adopted, in 1913. The Fed thus became the lender of last resort for banks that find themselves in an illiquid position. It is only after the stock market crash of 1929, however, that the Security and Exchange Commission (SEC) was established, in 1934.

But even with institutions and regulations in place, when they are inoperative, corrupt or ill-adapted, financial crises can still occur. And the current financial crisis is there to remind us of this fact.


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I believe more economic indicators are due out shortly so the jury is still out on how bad things are. Everything I've been reading suggest at least a mild recession is in the cards.

Markets are high again. WHY? Government intervention, it continues to prop up the system that is failing. Checking futures gold is up to $733 an ounce, oil is at $80+, markets are sliding and yet the markets are up. All the news suggest inflation should return. This is a paradox created by govt bail outs. But can it last?

It seems there are a lot of folks trying to make it look like everything is just fine. It will only last as long as the feds prop up the markets.IMO.