If you read my earlier piece today on positive GDP growth and you regularly follow this blog, you may have found my post a little optimistic in comparison to my normal economic outlooks. I’m now writing to allay your fears. Thanks to our good friends at MSNBC, I’m more pessimistic then ever.
They quoted a Goldman-Sachs analyst:
“The risk of renewed home price declines remains significant,” he wrote in a research note last week. "And our working assumption is a further 5-10 percent decline by mid-2010.”
Now I expected and have predicted a double dip for a while, but 5 -10 percent by mid-2010? That’s quite a contraction that they are predicting in three quarters. Especially since the last two quarters has held around a 1% decline.
4 comments
I didn't find any optimism in the news that GDP grew. It was on a sugar high from cash for clunkers, and the real news will be in the fourth quarter. Unemployment is still rising, the dollar is falling, and signs of inflation are showing. Goldman-Sachs is consistent with the belief that home values will continue to decline through 2011, and most Americans will be upside down.
October 29, 2009 at 5:26 PMBill - I agree, I wrote my first post ahead of the analysts and media. I didn't expect everyone to down play the GDP growth.
October 29, 2009 at 11:07 PMMy only disagreement is over inflation. Inflation is coming, but I think deflation, aka deepening recession is more likely at the moment.
I didn't find any optimism in the news either. The only numbers that went up were the government dollars being spent. All other aspects went down or were flat. There may not be any job growth for more that a year. There was nothing in this report to make me feel optomistic in the least.
October 30, 2009 at 10:15 AMI didn't find any optimism in the news of GDP growth either. It was all government created and a bunch of fakery in my opinion, So, its worthless since it won't last. The private sector didn't grow and thats what counts. Plus, consumer spending decreased. People have less to spend so that makes sense.
October 31, 2009 at 12:31 PMPost a Comment