In a recent presentation in Orlando, Christopher Thornberg noted the likelihood of a double dip in 2011. Thornberg famously predicted the real estate bubble, disastrous downturn in California and the high probability of recession in 2008. He is a former economist at UCLA and currently works at Beacon Economics, the firm he founded. I relied heavily on Thornberg’s analysis in helping to side-step the housing debacle and I have found his research to be not only straight forward, but well reasoned.
Thornberg says the economic recovery is mostly government induced and could lead to a double dip as the government steps aside and attempts to hand over the baton to the private sector. In the presentation Thornberg noted the continuing concerns:
- The bad news: we haven’t completely fixed the problems, instead the economy is being driven by government policy
- The worse news: government policy is causing its own set of problems: namely public debt and the potential for inflation
Thornberg says 2010 is likely to be a good year for the economy, but as the stimulus wears off the true colors of the private sector will shine through and result in a double dip. On the bright side, Thornberg notes that export growth is likely to remain strong and businesses are well positioned. Unfortunately, in the long-run, he says the following 7 negatives are likely to outweigh the few positives:
- Consumer weakness will likely continue
- Businesses are a wild card
- Housing bounce won’t last
- Banks not out of the woods yet
- Commercial trouble to continue
- Significant chance of a double dip
More Here..
- Higher Rates coming down the pike
There are no jobs, so there is no need for as many banks, so if banks collapse, they succumb to creative destruction. No big deal. We have more than enough houses and buildings in the US. They're worth is the wholesale cost of the material. Nothing more. The lending bubble just benefited the banks, and they're going, so housing doesn't count.
ReplyDeleteBusiness? if there are no jobs, we only need "i owe my soul to the company store." IOW, we can use some new measures: how many students completed their homework, learned a blue collar skill, how many completed a health science degree, the only demand-side jobs left in the US.
Love this "double" dip talk. The "first" dip has yet to reach bottom. Billions in stimulus debt only just slowed the decline, by 2012 it's over the cliff again.
ReplyDeleteI agree with most of that but everything I am looking has it starting in Q3 of 2010 and being official in Q4 as a double dip after Q2 barely has like a 1% GDP growth rate....then the Depression will start soon afterwards officially...
ReplyDeleteI see it hitting sometime in late Q1 2011. In 2010 the gov't still has stumulus $ to spend but when it runs out, that when things will hit the fan.
ReplyDeleteYeah yeah yeah
ReplyDeleteBlah blah blah
Oh great - another world class analyst
Just what we need - another blabber mouth to inform us that we are going to implode ----
Sometime ! yeah; no shit Sherlock.
So finally the EA has admitted that there is a recovery. As for there to be a double dip there must be a recovery first.
ReplyDeleteCan someone briefly explain what a "double-dip" is?
ReplyDeletean alleged recovery that winds up falling through the floor.
ReplyDelete@7:15
ReplyDeletedouble-dip recession:
An extended decline in economic activity following an aborted recovery from a previous recession. A relatively weak economic recovery sometimes causes investors to worry about the economy entering another recession.
6:42 is right, the EA kept telling us we are in a depression and now he post this article about possible "double dip"....so we are in a recovery.. Fuck you EA
there is no such thing as double dip, it is a depression plain and simple, the media, govt and people are too afraid to say what it really is and that is pathetic
ReplyDeleteYou are right 8:17 there is no double dip, it is recovery, recovery, recovery all the way through and then economic boom imminent....
ReplyDeleteEA you are a confusing personality. What double dip? does that mean we are in a recovery???????????????????.....this blog is a scam just to get donations....EA can you just bend over I have a big donation for you.
ReplyDeleteMaybe a double dip in the Stock Market. Were still in the process of the first recession.
ReplyDeleteSeems like perhaps Marx’s falling rate of profit caught up with capitalism again and now there is a round of overvalued or fictional capital destruction and crisis.
ReplyDeleteEA isn't claiming anything; he's just posting the article that others write. Gosh, you Americans aren't very smart are you.
ReplyDeleteActually, if it dips again in 2010 or 2011 it will be a TRIPLE dip. The recovery from the Dotcom bust was a farse so 2008 was the major double dip. It is fine with me, I will like the USA better as a third world country anyway.
ReplyDeleteCORRECT!! TRIPLE DIP!! The 2001 crisis never did fully recover before the "great recession" began late '07. And problems STILL EXIST!! Simulus funds, and unemployemt benefits extension are the ONLY reason it has not been as bad as the 1930's YET! BUT, this is now putting the gov't and all in EVEN MORE DEBT!! BEWARE, the unemployment is now counted differently than the 1930's! so the "10.1 percent peak" is not actual, if counted in similar manners as the past actual unemployment is about 18-20 percent in late 2009/early 2010! Recovery peaked in april 2010, now we are "ON OUR WAY" into the "third dip", BUT this one is gonna be FAR WORSE!! Prepare for THE SECOND GREAT DEPRESSION!!
ReplyDeleteyou have been lied to all your life by greedy politians now were are all figuring it out so when it all hits the fan it will be because of the crap going on in the whitehouse other countries angry with us over being lied to so the people in the u.s. pay the price if war happens when all the lieers are safe in the white house why we are being killed o well what can we do realy nothing.........
ReplyDeletepeople are hungry lost everything are homeless and its going to get worse as you know while the president and all that are in the whitehouse are all eating steak seafood sitting in a/c and relaxing there not feeling are pain being in the street being hungry stinking i remember hearing this a while back the politians dont care about you rather your hungry or not homeless or not life goes on day after day regaurdless the only person that cares about you is you and i now see its true new jobs being created where?????????
ReplyDeleteIts now a suckers rally/yuppies rally.
ReplyDelete