<<But that view isn't shared by some economists, who don't see a recession ahead and are more bullish about the economy. >>
that would be the same economists that have been consistently wrong about the US economy over the past decade.
<<there is no credit crunch. >>
bullsh*t. credit spreads are even higher than during the '98 crisis. that IS a credit crunch.
<<Lieser said the state "is performing
near the ceiling," so it won't fall back as far as the rest of the nation. >>
they couldn't be more WRONG! -g- California will be hit the hardest, precisely BECAUSE it has the biggest real estate and economic bubble to work through...and precisely because of the tech concentration there. and because of the huge surge in NG costs, and the attendant infrastructure breakdowns.
<<The good news, according to Leamer, is "the recession is a mild one>>
the recession isn't even here yet. how do they know it will be mild? imo the unwinding of the biggest credit/asset bubble of all time is highly unlikely to produce anything 'mild'.
<<and growth bounces back strongly in 2002 because of the underlying productivity
gains that have been powering growth since 1995.">>
this is a complete fallacy. firstly, what has happened is merely a change in the statistical methods for calculating productivity growth...no need to go into detail, the hedonic BS has been criticized at length here. what HAS driven the expansion though is completely out-of-control growth in credit and consequently money supply. it has very little to do with productivity, except that the productivity myth led the Fed astray, leading to their supporting the credit bubble at every turn, until it became 'too big to fail'.
now we have to hope that the Greenspan put is good enough...better to reserve judgment on that.
<<There is a reason for this wild ride," Leamer observed. "In the old economy, the assets were structures and equipment, which take time to build and which
have substantial salvage value. The time to build slows the ride up and the salvage value softens the downturn." >>
i agree 100% with that.
<<"With a less appealing climate for stock options next year, and probably slower growth in new jobs in computer services, average
compensation will likely drop, and will consist more importantly of regular wages." >>
again, i'm in full agreement. that will worsen the developing corporate margin squeeze a lot. the old bubble games with options are done for. |
