Going back a year it would have been very hard to find more than a handful of economists who believe that a global recession would potentially drive down GDPs in most of the world’s largest nations.
The Fed’s notes on its last meeting released today show that the agency was more concerned about the situation than they might of let on.
In the last few days, more experts have been willing to venture unusually pessimistic opinions.
David Rosenberg of Merrill Lynch believes that the recession will not end this year and could go well into next year. According to Reuters, he said that "The housing and stock market slumps have wiped out $13 trillion in household wealth. That means Obama’s tax cut measures may wind up going toward rebuilding savings, which would provide scant immediate economic lift."
Carmen Reinhart, from the University of Maryland, was not willing to be outdone in the gloom department. He reckons that housing will not hit a bottom until the middle of next year and that unemployment will rise to 11%. Reuters reports that "The two emphasized that, despite the best efforts of governments and monetary authorities around the world to stem the crisis, policy measures can only do so much to contain the aftermath of the largest debt bubble in modern history."
That is probably enough bad news for today.
Douglas A. McIntyre