Pimco boss says US in recession

[chinthee]

By Matthew Garrahan in Los Angeles Thu Dec 20, 4:10 PM ET

Bill Gross, founder of Pimco, one of the world's largest fixed-income managers, sounded a downbeat note on the US economy by saying it has gone into recession.

"If I had to be bold I'd say we began a recession in December," he said in a Financial Times interview, in which he called on the Federal Reserve to bring interest rates down to 3 per cent. The recession would last "four to five months", he thought, but he added it would be prolonged if the administration and Congress failed to "take some rather unperceived and unforecasted measures in terms of fiscal stimulation".

Pimco boss says US in recession - Yahoo! News

[sabang]

If he's not technically right yet, he will be in the next quarter I reckon.
The question is how severe it will be- mild recessions aren't that bad.
But the real estate situation and it's effect on consumption might export this one far and wide.

[Sir Burr]

Technically, there has to be two consecutive quarters with negative growth to be called a recession.

[chinthee]

^Yeah, that's traditional economic wisdom, but I suspect one of the world's largest fund managers uses tools we didn't study or aren't privy to.

[sabang]

I noticed that the trade deficit with China hit a new high recently.
It will be interesting to see the retail sales figures for the Xmas season.

[chinthee]

Consumers don't agree evidently....

By MARTIN CRUTSINGER, AP Economics Writer 10 minutes ago

WASHINGTON - Consumers put aside worries about slumping home sales and soaring gasoline prices and headed to the malls in November, pushing spending up by the largest amount in 3 1/2 years.


The Commerce Department reported Friday that consumer spending surged by 1.1 percent last month, nearly triple the October gain. The gain reflected various promotional efforts by retailers such as heavy discounting and longer store hours at the start of the holiday shopping season

Consumer spending surges in November - Yahoo! News

[barbaro]

Technically, there has to be two consecutive quarters with negative growth to be called a recession.

This is correct.

When the big daddy of Pimco speaks, I listen. But people often don't agree on what is happening and what will happen.

I like to read Jim Rogers, too.

[Texpat]

I suspect one of the world's largest fund managers uses tools we didn't study or aren't privy to.

That's where you're wrong, Chinners. TD Issues is a meeting of some of the most informed and outspoken, business, military and government insiders the world has ever known.

We're among the world's top health care experts, bankers, lawyers and even a few shoulders to cry on. That's right, all those Princeton, Harvard, MIT, Oxford, Sandhurst, West Point grads working for their respective countries just wish they could join the ranks of TD Issues.

I've been told, on good authority, the United Nations routinely monitors our threads for insight and strategy on solving global peace and world hunger.

The recession would last "four to five months"

What shall we do?

It will be interesting to see the retail sales figures for the Xmas season.

Everything I've seen shows them down. (I'm a TD Issues member.)

[Butterfly]

I would question what Pimco boss is saying, he probably got stuck with some bad sub-prime assets, and is looking for the government to bail out the whole banking industry by hyping the fear of a recession with a few other bankers.

There might be a recession, but we can't tell or forecast it before at least another quarter. With the Clintons back in the WH next year, all this will be bad memories, and the economy will be back to its pre-2000 level before GW Bush fuck it all up.

[sabang]

Wall Street vaulted higher yesterday as upbeat corporate news and a stronger-than-expected report on US consumer income and spending helped the market shake off recession fears.

Robust earnings news from tech player Research in Motion (RIM) and a report of a possible cash infusion for troubled investment giant Merrill Lynch also helped fuel the so-called Santa Claus rally.....

On the economic front, a report showed US consumers shook off a slump in housing and tight credit and boosted spending by a stronger-than-anticipated 1.1 per cent in November.

The Commerce Department report also showed that personal incomes rose 0.4 per cent, a notch weaker than forecast.

"Consumers have not stopped spending and as long as income keeps growing, the economy can stay out of recession,'' said Joel Naroff, chief economist at Naroff Economic Advisors.
AFP

Wall Street surges after strong consumer data | smh.com.au

Will there or won't there be a recession?

I'm on balance of the opinion there will be, not necessarily severe. Actually, I don't even think it would be a bad thing. Sometimes a mild recession can rein in financial speculation and overborrowing, and prevent a severe recession or stagflation from happening later.

There are massive latent losses in the housing markets, and a lot of bad debt floating about. This has to have an effect on domestic consumption methinks.