This Is a Recession
Even the cheerleaders on CNBC are going to start having to use the "R" word. Yesterday, automakers announced their worst results since the depths of the 1993 recession. Not even Toyota was spared. This morning the Labor Department announced that last week's new jobless claims soared to 497,000, the most since the weeks after 9/11. And finally the crucial ISM manufacturing index slipped 4% (as against the expected 2%) for the month of September.
We need to be really clear. We have two problems--a credit crisis and a cyclical recession. The two are connected, but solving the credit crisis will not stop the recession. It will just keep it from turning into a depression.
This is why we can't spend the whole $700 billion on Wall Street. We need to keep some powder dry for the Rebuild America Plan.
Roubini forecasts "the mother of all bank runs" in Bloomberg radio interview
http://search.bloomberg.com/search?q=roubini+silent+run&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date%3AD%3AS%3Ad1&submit.x=0&submit.y=0&submit=submit
October 2, 2008 1:02 PM | Reply | Permalink
Good friend, in construction, additions, remodeling, has not had work since the spring. This was back when the housing slump was dismissed by conservatives as only affecting speculators. They were whistling past the graveyard, since my friend's client base is Chevy Chase, MD.
October 2, 2008 2:22 PM | Reply | Permalink
Funny thing about Toyota's losses.
Remember how, for like the past 20 years at least, the 'narrative' has been about GM's feet of clay and reliance on gas guzzlers for profits?
Well, now it's Toyota's American product spectrum that is pretty GM-ish. Look at their website - full of trucks. They recently made their Highlander SUV much bigger and went from a standard 4cyl engine to a 270hp V6 - this is their 'soccer mom' suv - far from their biggest truck.
Same situation with their new mega-size pickpup. It's actually BIGGER and heavier than comparable GM 1/2 trucks and gets worse gas mileage than GM because of that.
October 2, 2008 2:37 PM | Reply | Permalink
Been wondering about that. Even Volkswagen has produced *two* SUVs--with weird names, but I digress--and all of non-American-owned EuroAutoMakers have produced at least one, even Porsche.
I guess we 'Mericans were still buyin' 'em like there was no tomorrow.
Hmm, tomorrow today. Yesterday's long gone.
October 2, 2008 3:40 PM | Reply | Permalink
JohnMcCSF: Roubini's radio broadcast on Bloomberg was excellent; thanks for the link!
I like his idea to guarantee all deposits (not just $100K or $250K) for 6 months while you figure out which banks can be salvaged and which have to be closed.
Roubini's good.
October 2, 2008 4:17 PM | Reply | Permalink