CNBC interview of Goldman Sachs economist Dudley (typical)
he represents mainstream financially biased economists
he says correctly that we have seen nothing like this economy in the post-war period
(translation: not a typical cycle, more like structural correction as in 1930)
he believes the decline in stocks will affect negatively business confidence, hiring, and capex spending
will affect state & local govts with revenue shortfall, tax increases, and spending declines
he seemed to think low inventory levels are important
(even though inventory ratios are unchanged since 2000)
in structural corrections, inventory levels are a curveball nonissue
he believes monetary and fiscal policy are favorable
i.e. the Fed low rates, and Govt spending
he therefore does not believe we will see a Double Dip recession
he doesnt believe the Fed will cut rates
not unless we have "a lockup in the financial markets" like in 1998 with LTCM
right now the Fed expects +3% GDP in Q3, Q4
sounds like the Wall Street party line
no mention of rising consumer debt levels, USdollar decline effects, historically high stock valuations, new trend unfolding to expense options and relax pension assumptions, accelerating bankruptcies, flattening money supply, and general deflationary forces, etc etc
and my favorite, no mention of the clear DoubleDip in first time unemployment claims
(first time ever since WW2)
and also, no mention of the massive breakdown in S&P Head & Shoulder bear pattern !!!
maybe he is unaware of the H&S breakdown ???? nahh
more eloquent but questionable and self-serving economic research
/ jim |
