A Second Recession Looms

[Kathianne]

No hyperbole necessary, the tune is becoming clear. This current recession shows few signs of abatement, yet the results of 'stimulus' are becoming more ominous.


http://www.reuters.com/article/ousiv/idUSTRE52168Y20090302


U.S. rescue efforts may risk double-dip recession
Mon Mar 2, 2009 4:47pm EST
By Emily Kaiser - Analysis

WASHINGTON (Reuters) - U.S. companies, consumers and communities may grow so addicted to government financial help that cutting them off could trigger another recession soon after the current one ends.

Between the U.S. Federal Reserve's trillions of dollars in lending programs, the $787 billion stimulus package and $700 billion -- and counting -- in bank bailout funds, no one can accuse officials of soft-pedaling their crisis response.

But there is increasing concern that when the flow of public money subsides -- beginning next year when much of that stimulus package is spent -- the economy still won't be strong enough to stand on its own....

...The latest evidence of the government's ever-changing plans came on Monday when insurer American International Group Inc got its third bailout, each with different terms.

That did nothing to improve confidence on Wall Street, where investors dumped stocks amid fears that the financial crisis was worsening....

[Kathianne]

and related, won't be 'easy' to implement an 'exit strategy' from the private sector, though that may have been the goal?

http://www.reuters.com/article/ousiv/idUSTRE52168Y20090302?pageNumber=2&virtualBrandChannel=0



...Extricating the Fed and Treasury from other means of support won't be so easy.

"Major industries have become dependent on federal assistance, and they will be followed by cities and states bearing mind-boggling requests," investor Warren Buffett wrote in his annual letter to shareholders. "Weaning these entities from the public teat will be a political challenge. They won't leave willingly."

[sgtdmski]

I doubt seriously the current one will end, it will just continue until such time as the people in Washington see that throwing government money at the problem will not solve it. Either they will figure it out quickly or in two years when the people have a chance to vote again, the economy will be the major issue and after four years of controlling the Congress, the Democrats will see thier majority shrinking if not totally shrunk.

dmk

[Kathianne]

I doubt seriously the current one will end, it will just continue until such time as the people in Washington see that throwing government money at the problem will not solve it. Either they will figure it out quickly or in two years when the people have a chance to vote again, the economy will be the major issue and after four years of controlling the Congress, the Democrats will see thier majority shrinking if not totally shrunk.

dmk

Hey, welcome to DP! You've had some good posts! Scary chart:

http://polipundit.com/index.php?p=20721

Shows the markets since election day. Obama owns this.

[sgtdmski]

Hey, welcome to DP! You've had some good posts! Scary chart:

http://polipundit.com/index.php?p=20721

Shows the markets since election day. Obama owns this.

Thanks for the Welcome.

I have to agree, the market has seen a few ups since Obama's election but thus far it is way down, including below 7000 a scary thought, half of my 401(k) has evaporated.

So much for the faith, hope and change, so far all I have seem is doom, gloom and the market go boom.

dmk

[Classact]

I'd like to welcome you too! I think you post on another board that I post on, I use the username Zack there?

I'm retired and watch a lot of CSPAN and CNBC financial network and I'm guessing that a lot of housewives/husbands and shift workers are watching these shows. CNBC talking heads of authority all say the government needs to let the bad fail and then pick up the pieces and move forward. I think Obama will lose support more and more as days pass because both CSPAN and CNBC financial network expose Obama's agenda as one doomed into one of two alternatives... one continued recession or depression and two, hyper inflation as a result of US debt. The Cap-in-Trade tax will destroy America if all the carbon taxes aren't returned to the people because of increased costs of food, transportation and electric/heating/cooling expenses... Obama is relying on these taxes to fund his agenda and doing so will put us all on welfare with no one left to pay the tax.