Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: bobby beara who wrote (67749)	1/26/2001 3:43:03 PM
From: Crimson Ghost	Read Replies (3) \| Respond to of 99985

Respected Levy Institute predicts "long and severe recession" THE UNDERESTIMATED RECESSION WILL BE LONG AND SEVERE Mount Kisco, NY, January 26, 2001— Recession, which began in November, will not end, at the earliest, until 2002 and will have unfortunate consequences that will last for years, according to the latest issue of The Levy Institute Forecast and Macroeocnomic Profits Analysis. The “underestimated recession” is a product of long-developing imbalances between the size of the economy and the magnitude of its debt and fixed assets, asserts the Levy Institute Forecasting Center, which publishes the monthly report. “The current situation also has a particularly threatening feature: the pathologically inflated corporate equity market,” notes the Levy Forecasting Center. The economy’s total asset value relative to income is much greater than on the eve of the 1989-93 period of financial trouble, when the 1980s real estate bubble was coming undone. The economy’s vulnerability to a stock market decline is unequaled in U.S. history, according to the Levy Forecasting Center. “Overall, the present situation involves the most formidable financial dangers since the 1930s.” Since recessions are always at least several months old before they are commonly recognized, it is not surprising that debate is underway about whether the economy is experiencing a soft, bumpy, hard or crash landing. The Levy Institute Forecasting Center invokes a metaphor it coined in the 1950s, to describe the transition from prosperity to recession: “When a long train rounds a curve, the locomotive completes the turn while the caboose is still traveling in the orginal direction. Similarly, some economic activities have begun to contract while others are still expanding.” David A. Levy, director of the Levy Institute Forecasting Center, reminds readers to “Respect the danger of the developing financial and economic storm.” ***************************** The Levy Institute Forecasting Center’s list of 10 developments to watch in the early ‘00s: 1. 2001 profits decline will be steep. 2. Recession and financial crisis abroad will last longer and be more severe than in the US. 3. Economic woes in countries such as Japan, China, and Russsia may have political consequences. 4. As the recession deepens, the record US trade deficit may impact trade and international relations. 5. The recession will have a domino effect that will cause a 2-3-year long credit crunch. 6. Modest deflation in goods and services prices may develop by 2002. 7. Interest rates will plunge. 8. Federal fiscal policy, especially income tax rules, may have a major effect on the economy of 2002. 9. The timing and extent of the consumer pullback will affect the depth and duration of the recession. 10. People may discover that the Fed is not omnipotent. ### In this month's Levy Institute Forecast... The Levy Institute Forecast, formerly known as the Industry Forecast, was established in 1949 by Jerome Levy and S Jay Levy and has been published since January 1, 1991 by The Jerome Levy Economics Institute of Bard College. The Levy Institute Forecast is produced 12 times per year by David A. Levy, S Jay Levy, and the research staff of the Levy Institute Forecasting Center. The Levy Institute Forecasting Center 69 South Moger Avenue, Suite 202 Mount Kisco, New York 10549 Research: 914-666-0641 Circulation Specialist: Sandra Larkin, 1-888-244-8617 (toll free) Press Contact: Martha Cid, 212-481-7000 (Ext. 165) cid@levy.org · FORECASTING CENTER · FORECAST · MEMBERS AREA · HISTORY · · PRESS RELEASES · PROFITS · STAFF · INTERNSHIPS · FELLOWSHIPS · LEVY INSTITUTE · Copyright 2000 The Levy Institute Forecasting Center. All rights reserved.