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Strategies & Market Trends : Technology Stocks & Market Talk With Don Wolanchuk -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (30194)	3/17/2008 1:09:18 PM
From: Chip McVickar	Respond to of 206823

bloomberg.com Harvard's Feldstein Says U.S. Economy in a Recession (Update2) By Matthew Leising and Steve Matthews March 14 (Bloomberg) -- Harvard University economist Martin Feldstein, a member of the group that dates business cycles in the U.S., said the nation has entered a recession that could be the worst since World War II. ``I believe the U.S. economy is now in recession,'' Feldstein, president of the National Bureau of Economic Research, told the Futures Industry Association conference in Boca Raton, Florida. ``Could this become the worst recession we have seen in the postwar period? I think the answer is yes. I would emphasize the word `could.' '' Feldstein's remarks represent the first time that a member of the NBER's business-cycle dating committee has publicly described the current downturn as a recession. The economy may not respond quickly to Federal Reserve interest-rate cuts, and a package of tax rebates and investment incentives will offer only a temporary boost, he said. Investors today raised their bets that the Fed will slash interest rates by a full percentage point next week after the central bank and JPMorgan Chase & Co. agreed to provide emergency funding to Bear Stearns Cos., the fifth-largest U.S. securities firm. Bush administration officials including Treasury Secretary Henry Paulson have avoided saying the economy is in a recession. ``We have slowed down very significantly,'' Paulson said in a National Public Radio interview yesterday. ``I'm not getting into'' whether it is a recession. The economy expanded 0.6 percent at an annualized pace last quarter, and economists surveyed by Bloomberg News this month predicted the pace will slow to 0.1 percent in January to March. Job Losses The U.S. unexpectedly lost jobs in February for the second consecutive month, a government report showed on March 7. A private report today showed consumer sentiment this month sank to a 16-year low. ``By almost every measure the U.S. economy is moving sideways or slightly down for the last few months,'' said Feldstein, who in January put the odds of a recession at more than 50 percent. The collapse of the market for subprime loans, those given to borrowers with the weakest credit, has cost global financial companies $195 billion in asset writedowns and credit losses since the beginning of 2007. The losses have caused liquidity in financial markets to dry up. Financial markets are exhibiting a pervasive ``unwillingness to trade'' and are suffering a ``loss of confidence'' about valuations of assets, said Feldstein, who is retiring as NBER president this year. Rate-Cut Odds Traders are betting there's a 50 percent chance the Federal Open Market Committee will cut its benchmark rate by a percentage point to 2 percent on March 18, according to trading in federal funds futures. That's up from a zero probability yesterday. The central bank has cut rates from 5.25 percent in August. ``Monetary policy is not likely to have the favorable traction in this slowdown that it has had in the past, in part because of what is happening in housing and in credit markets,'' Feldstein said. A fiscal-stimulus package will help growth in the second half of the year, though that is ``not very likely to do more than cause a pause'' in the downturn, he said. Revised Data Committee members say any formal determination of a recession may still be months away, in part because economic data is frequently revised. Feldstein said that while some data may be updated, it is ``very likely'' that reports will confirm a recession this year. The Cambridge, Massachusetts-based bureau defines a recession as a ``significant'' decrease in activity over a sustained period of time. The declines would be visible in gross domestic product, payrolls, production, sales and incomes. The committee says it usually determines a recession six to 18 months after one begins. It last declared a contraction officially in November 2001 that started in March of that year. The U.S. has had 10 recessions since 1945 that have averaged about 10 months each. The longest lasted 16 months in 1981 and 1982 when the Federal Reserve, under Chairman Paul Volcker, raised interest rates to as much as 20 percent to battle soaring inflation. ``Given the retrospective nature of our process, no determination of a peak in activity is likely in the next few months,'' Robert Hall, a Stanford University economist who leads the NBER's business-cycle dating committee, said March 7. ``There is a good chance that when all the data are in they will show that we entered a recession in the first months of 2008,'' Harvard University economics professor Jeffrey Frankel, another member of the committee, said in an interview on March 12. To contact the reporter on this story: Steve Matthews in Atlanta at smatthews@bloomberg.net Last Updated: March 14, 2008 17:10 EDT

To: Chip McVickar who wrote (30194)	3/17/2008 1:42:41 PM
From: catflu2™	Read Replies (1) \| Respond to of 206823

rsi "based" in jan...lowest reading in five years. records are meant to be broken however...

To: Chip McVickar who wrote (30194)	3/17/2008 2:09:53 PM
From: bearshark	Read Replies (2) \| Respond to of 206823

Well, I'll take the easy way out and say, I don't know. However, I'll give you what I'm pondering now. Short term, we could have a worthwhile intermediate bottom at the end of this week or sometime next week. That depends on whether we continue to go down this week. It would have been a sure thing if we hadn't had the bogus blip up last week. However, I have two problems now. The first is bubbles. The housing price bubble has been partially popped--I expect more to go. As ugly as today was, we may have seen the worst of the financial bubble blowup. That leaves us with the commodity bubble. You can do a quick check by looking at the differences between the NYSE move vs. the INDU move. Normally, they will be fairly close. However, when the NYSE is much lower than the INDU, you can assume that commodities are being hammered. Eventually, the dollar will turn up and make things worse. Take a look at the NYSE vs. INDU today. Now, ask yourself whether all markets will go up if the NYSE is going down due the the bursting of the commodity bubble. The second is the chart you posted earlier today. Let's assume that there is an inverted head and shoulders in the middle of that pattern. Patterns like that and triangles like to retest their apex or neck. Now, let's assume that there is such a thing as a bear market. If so, we are in the second leg down using Dow Theory. (Forget Russell.) Now, look at your chart and you will notice a lot of crap at the 11,000 level prior to the inverted head. That could be the end of the second leg down. The neck is somewhere around 10,500. That could be the bottom before you get Edson Gould's "sign of the bull." If you go back to October 2002, to March 2003, I think, you will see it. That's just what I'm pondering. Anyway, I'll trade the long side for change when I see an intermediate bottom, and keep 10,500 in mind--just in case. I have only one stock that I am keeping for any period of time.