The Federal Reserve has issued its latest Beige Book ahead of the next FOMC meeting.  It shows more pain and more suffering ahed, just like the rest of the economic data we have seen.  The report puts the likelihood of any near-term recovery as very low.  Only two of twelve districts did not see significant deterioration. Significant recovery is not expected until late 2009 or into 2010.

Consumer spending remains slow and there is an exceptionally sluggish auto market. Housing price decreases have not slowed with many markets continuing to see double-digit drops.  Mortgage demand is depressed and consumer lending is down while unemployment is up and wage pressure is muted.  The weakness is being seen even in health care now.  Spending is lower in restaurants, entertainment, travel and retail businesses.  There is more data we could lump in here, but we will spare you the blow by blow recession.  It is becoming too easy to see depression in this recession.

There is one way to think of this positively.  You have to print out your charts and turn them upside down.  It will look like a huge move up that way.

Jon C. Ogg
March 4, 2009