The widespread stagnation in wages, rather than the level of unemployment, may offer a better explanation for the failure of economic growth to accelerate two years after the end of the recession. Workers’ ability to negotiate higher earnings won’t return until the job market strengthens, and flagging confidence has raised the risk that consumers may retrench. [Let us explain.] Words: 1018
Michael Spence, professor at New York University’s Stern School of Business and winner of the 2001 Nobel Prize in economics, believes there’s “probably a 50%” chance of the global economy slipping into recession. Noriel Roubini disagrees and says flatly that a recession is coming and that it is a mission impossible now to stop it. The Philadelphia Federal Reserve Bank places the odds at 85% of a recession. David Rosenberg, another very savvy economist, says that by 2012, the chance of a second recession is 99%. Peter Schiff, who with Roubini, correctly and accurately predicted the collapse on Wall Street and ensuing recession, thinks one is 100% certain. [Let's take a look at why they hold such views.] Words: 829
Many investors believe the market will rise if the economy is growing and sink if it’s shrinking but that is the wrong way to think about it. Instead, the real focus should be on whether the economy is growing at a slow pace or a moderate pace. Indeed, with 2% growth, the stock market could steadily fall. Yet with 3% Gross Domestic Product (GDP) growth, the market could surge. The difference between 2% and 3% may not seem like much, but it is. [Let me explain.] Words: 730
At times like these, it is hardly going out on a limb to say that we are headed for hard economic times. In fact, it seems like almost everyone in the financial world is either declaring that a recession is coming or is busy preparing for one. The truth is that bad economic signs are everywhere. Words: 1171
Robust economies utilize all spare capacity, or restructure it for better use. Having 17% of our able-bodied population sitting at home or working part-time at Cinnabon indicates that our present policies are weakening the economy — even if GDP is growing. There is no “jobless recovery,” only senseless cheerleading. Words: 699
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