Is Roubini right on? Or is he becoming like the little boy crying wolf?
Subscribe to EF Hutton via EmailSource: Firedoglake
Showing posts with label stimulus. Show all posts
Showing posts with label stimulus. Show all posts
Thursday, February 19, 2009
Roubini on Housing, Stimulus and Banks
Dr. Roubini discusses the housing recovery plan, bank bailouts, and the shape of the coming recession. His comments on the stimulus package and housing plan are mostly negative.
Is Roubini right on? Or is he becoming like the little boy crying wolf?
Is Roubini right on? Or is he becoming like the little boy crying wolf?
Friday, February 13, 2009
Economy continues to worsen and so do forecasts
Economist forecast of GDP continues to worsen. This does not bode well for stocks near term. Has the market already discounted these forecast? This is a big question right now. The effects of the stimulus plan are not likely to help near term. Housing continues to worsen and the toxic time bomb of Option Arm mortgages is still hovering over the housing market and the economy. How high will unemployment rise? If it exceeds ten percent what effect will this have on investor psychology?
Economists' U.S. Outlook Dims
By KELLY EVANS and PHIL IZZO
Economists in the latest Wall Street Journal forecasting survey still mostly project growth in U.S. gross domestic product by the third quarter, but they largely agree that a 2009 "second-half recovery" -- a widely shared scenario until now -- is looking much less likely.
Recent data showing just how sharply growth in the U.S. and elsewhere has declined in the final months of 2008 have cast a deepening shadow over 2009.
As recently as September, economists on average thought the U.S. would see annualized GDP growth of 1.2% in the first three months of this year; now, they see a 4.6% decline. Forecasts for the April-through-June period have seen a similar shift, from a 1.9% growth forecast to now a 1.5% decline, based on the 52 economists who participated in the Journal's February survey.
The average forecast is for growth in the third quarter at 0.7%, less than half the rate expected last fall. The fourth-quarter picture has also darkened, but just slightly, to growth of 1.9% from 2.1% seen in November. Only five economists see growth declining through the fourth quarter of 2009; but they insist the consensus outlook right now, which says the recession will end in August as GDP returns to growth, is far too optimistic.
"The consensus is usually late to the party," said Brian Fabbri, chief economist at BNP Paribas, noting he was one of the few who forecast the current recession two years ago. Now, he is one of the five who sees GDP declining through the end of 2009, along with Joshua Shapiro, chief U.S. economist at forecasting firm MFR Inc.; Paul Ashworth of Capital Economics; Swiss Re chief economist Kurt Karl; and retired Vanderbilt University professor J. Dewey Daane.
"We're in trouble," Mr. Fabbri said. "We don't have sufficient economic plans at present to resolve the banking system or the financial crisis, and the stimulus package seems loaded for 2010." He added that the global nature of the downturn along with U.S. consumers' increased saving and lenders' tightened standards all stand in the way of a quick recovery.
A boost to the economy from the government stimulus package has been a key feature of most forecasts for a rosy finish to 2009, but economists in the February survey largely expressed disappointment with how the package is shaping up. Comments on the package's influence this year say it is "too late," "provides little boost," is "trivial," "too big," "too small" and a "colossal waste of money." Nicholas Perna of Perna Associates cautioned, "We're in danger of repeating Japan's mistakes," referring to that nation's policy errors during its "lost decade" of the 1990s.
About the Survey
The Wall Street Journal surveys a group of 55 economists throughout the year. Broad surveys on more than 10 major economic indicators are conducted every month. Once a year, economists are ranked on how well their forecasts have fared. For prior installments of the surveys, see: WSJ.com/Economist.
Forecasters also were asked how many jobs they expect the U.S. to lose in 2009, and the average response called for a loss of nearly 183,000 a month. But when asked how that would look absent the stimulus package, they saw a loss on average of about 271,000 a month. Employment often lags behind changes in economic growth, and if the labor market behaves as it has during the past two recessions, job losses and unemployment will likely rise for many months after GDP returns to growth. On average, economists see unemployment hitting 8.8% by December, from its current 7.6%.
Mr. Shapiro, who has been bearish on 2009 for months, sees unemployment hitting nearly 10% by year end and says he expects the economy to shrink through 2010. "We just think the enormity of the problem is not recognized by most people," he said. "If you look at the magnitude of this problem, the amount of debt relative to income, the credit and asset bubbles that have now reversed and it's only just started, why is it going to end two quarters from now?"
"To say 'off we go' in the second half of the year, I think that begs incredulity, I just don't buy it," he said. "It's a global thing, too; trade volumes are just cratering and our exports are getting pounded. There's nowhere to hide."
video
Forecasters: 2009 Economic Rebound Unlikely
2:27
WSJ.com Editor Phil Izzo speaks to reporter Kelly Evans about the latest economic survey forecast. Analysts believe a recovery is unlikely until after 2009.
But others are standing by their forecasts for a second-half recovery. Joseph Carson, an economist with AllianceBernstein, says uncertainty about government policy is holding back risk-taking behavior -- for now. "Once we get clarity on the fiscal and financial packages, those two things together could end up jump-starting the economy," he said. He forecasts GDP will decline at a 3% rate in the current three months, then return to growth by April and surge to a 5.7% annualized pace in the closing months of the year. Other bulls include Brian Wesbury of First Trust Advisors and James Smith, a professor at Western Carolina University, who both see GDP growing at a 4% rate by year end.
Write to Kelly Evans at kelly.evans@wsj.com and Phil Izzo at philip.izzo@wsj.com
More on All American Investor
"We're in trouble," Mr. Fabbri said. "We don't have sufficient economic plans at present to resolve the banking system or the financial crisis, and the stimulus package seems loaded for 2010." He added that the global nature of the downturn along with U.S. consumers' increased saving and lenders' tightened standards all stand in the way of a quick recovery.
Mr. Shapiro, who has been bearish on 2009 for months, sees unemployment hitting nearly 10% by year end and says he expects the economy to shrink through 2010. "We just think the enormity of the problem is not recognized by most people," he said. "If you look at the magnitude of this problem, the amount of debt relative to income, the credit and asset bubbles that have now reversed and it's only just started, why is it going to end two quarters from now?"
Subscribe to All American Investor via Email
By KELLY EVANS and PHIL IZZO
Economists in the latest Wall Street Journal forecasting survey still mostly project growth in U.S. gross domestic product by the third quarter, but they largely agree that a 2009 "second-half recovery" -- a widely shared scenario until now -- is looking much less likely.
Recent data showing just how sharply growth in the U.S. and elsewhere has declined in the final months of 2008 have cast a deepening shadow over 2009.
As recently as September, economists on average thought the U.S. would see annualized GDP growth of 1.2% in the first three months of this year; now, they see a 4.6% decline. Forecasts for the April-through-June period have seen a similar shift, from a 1.9% growth forecast to now a 1.5% decline, based on the 52 economists who participated in the Journal's February survey.
The average forecast is for growth in the third quarter at 0.7%, less than half the rate expected last fall. The fourth-quarter picture has also darkened, but just slightly, to growth of 1.9% from 2.1% seen in November. Only five economists see growth declining through the fourth quarter of 2009; but they insist the consensus outlook right now, which says the recession will end in August as GDP returns to growth, is far too optimistic.
"The consensus is usually late to the party," said Brian Fabbri, chief economist at BNP Paribas, noting he was one of the few who forecast the current recession two years ago. Now, he is one of the five who sees GDP declining through the end of 2009, along with Joshua Shapiro, chief U.S. economist at forecasting firm MFR Inc.; Paul Ashworth of Capital Economics; Swiss Re chief economist Kurt Karl; and retired Vanderbilt University professor J. Dewey Daane.
"We're in trouble," Mr. Fabbri said. "We don't have sufficient economic plans at present to resolve the banking system or the financial crisis, and the stimulus package seems loaded for 2010." He added that the global nature of the downturn along with U.S. consumers' increased saving and lenders' tightened standards all stand in the way of a quick recovery.
A boost to the economy from the government stimulus package has been a key feature of most forecasts for a rosy finish to 2009, but economists in the February survey largely expressed disappointment with how the package is shaping up. Comments on the package's influence this year say it is "too late," "provides little boost," is "trivial," "too big," "too small" and a "colossal waste of money." Nicholas Perna of Perna Associates cautioned, "We're in danger of repeating Japan's mistakes," referring to that nation's policy errors during its "lost decade" of the 1990s.
About the Survey
The Wall Street Journal surveys a group of 55 economists throughout the year. Broad surveys on more than 10 major economic indicators are conducted every month. Once a year, economists are ranked on how well their forecasts have fared. For prior installments of the surveys, see: WSJ.com/Economist.
Forecasters also were asked how many jobs they expect the U.S. to lose in 2009, and the average response called for a loss of nearly 183,000 a month. But when asked how that would look absent the stimulus package, they saw a loss on average of about 271,000 a month. Employment often lags behind changes in economic growth, and if the labor market behaves as it has during the past two recessions, job losses and unemployment will likely rise for many months after GDP returns to growth. On average, economists see unemployment hitting 8.8% by December, from its current 7.6%.
Mr. Shapiro, who has been bearish on 2009 for months, sees unemployment hitting nearly 10% by year end and says he expects the economy to shrink through 2010. "We just think the enormity of the problem is not recognized by most people," he said. "If you look at the magnitude of this problem, the amount of debt relative to income, the credit and asset bubbles that have now reversed and it's only just started, why is it going to end two quarters from now?"
"To say 'off we go' in the second half of the year, I think that begs incredulity, I just don't buy it," he said. "It's a global thing, too; trade volumes are just cratering and our exports are getting pounded. There's nowhere to hide."
video
Forecasters: 2009 Economic Rebound Unlikely
2:27
WSJ.com Editor Phil Izzo speaks to reporter Kelly Evans about the latest economic survey forecast. Analysts believe a recovery is unlikely until after 2009.
But others are standing by their forecasts for a second-half recovery. Joseph Carson, an economist with AllianceBernstein, says uncertainty about government policy is holding back risk-taking behavior -- for now. "Once we get clarity on the fiscal and financial packages, those two things together could end up jump-starting the economy," he said. He forecasts GDP will decline at a 3% rate in the current three months, then return to growth by April and surge to a 5.7% annualized pace in the closing months of the year. Other bulls include Brian Wesbury of First Trust Advisors and James Smith, a professor at Western Carolina University, who both see GDP growing at a 4% rate by year end.
Write to Kelly Evans at kelly.evans@wsj.com and Phil Izzo at philip.izzo@wsj.com
More on All American Investor
- Ray Dalio on the current state of affairs in the market
- 15 Great Stocks From the Great Depression
- Roubini Predicts U.S. Losses May Reach $3.6 Trillion
- Six Errors on the Path to the Financial Crisis
- Don't Get Swindled by a Foreclosure Rescue Company
- Option ARM--The Toxic Mortgage
- Debt Binge--The Perfect Financial Storm
Tuesday, February 10, 2009
Doctor Doom and the Black Swan Discuss the Economic Crisis
Roubini and Taleb discuss the economic crisis
Follow EF Hutton on Twitter
Subscribe to EF Hutton via Email
Follow EF Hutton on Twitter
Monday, February 02, 2009
Worried about the Economic Stimulus Package--You will be after you read this
Ready for a stomach ache, here goes.
If you are interested in ascertaining the validity of this information and the source go to,The Mikwaukee Wisconsin Journal Sentinal: Milwaukee Public Schools may be in line for millions in stimulus package
Featured Articles
Milwaukee Public Schools would reap $88.6 million over two years for new construction under the economic stimulus package just passed by the U.S. House of Representatives - even though the district has 15 vacant school buildings, a large surplus of property and no plans for new construction.
The amounts for MPS are particularly eye-catching, and not only because they are the largest in the state. Enrollment is declining every year, and the last major wave of construction in MPS - the $102 million Neighborhood School Initiative launched in 2000 - resulted in projects that are underused, have not met enrollment projections or have closed. A series in the Journal Sentinel in August detailed how tens of millions of dollars in construction spending did not produce the expected results, and the project as a whole has not led to a higher percentage of students attending neighborhood schools.
If you are interested in ascertaining the validity of this information and the source go to,
Subscribe to All American Investor via Email
- The End of the Wall Street Boom
- Has Chinese reserve growth stopped?
- 15 Great Stocks From the Great Depression
- Roubini Predicts U.S. Losses May Reach $3.6 Trillion
- Six Errors on the Path to the Financial Crisis
- Don't Get Swindled by a Foreclosure Rescue Company
- Ray Dalio on the current state of affairs in the market
- Option ARM--The Toxic Mortgage
- Debt Binge--The Perfect Financial Storm
Tuesday, December 09, 2008
According to the story, Obama's Stimulus Proposal Lifts Infrastructure Stocks, which company does Tom Busby like?
CNBC Bonus Bucks Trivia Answers
CNBC Million Dollar Portfolio Challenge
Squawk on the Street
Question: According to the story, Obama's Stimulus Proposal Lifts Infrastructure Stocks, which company does Tom Busby like?
Answer: Microsoft
Worth Reading
Obama's Stimulus Proposal Lifts Infrastructure Stocks
INFRASTRUCTURE, STOCK MARKET NEWS, BARACK OBAMA, STIMULUS PLAN, ECONOMY, CONSTRUCTION, CATERPILLAR, MICROSOFT, GRANITE CONSTRUCTION, STERLING CONSTRUCTION, AECOM TECHNOLOGY, NORTHROP GRUMMAN
CNBC.com
With President-elect Barack Obama pledging to rebuild the economy from the inside out, infrastructure companies stand to reap a substantial bonanza.
Obama has promised a program not seen in half a century to shore up the national highway system, erect public buildings and reconstruct the nation from top to bottom.
A $136 billion infrastructure component is the keystone of a potentially $1 trillion Obama economic stimulus plan that moves beyond providing one-time rebate checks to taxpayers and escalates into generating employment and business opportunities for struggling companies.
Though he does not take office for more than a month, Obama's intentions already have had an impact.
Stocks surged Monday on the stimulus hopes, with big winners ranging from Dow component and construction equipment leader Caterpillar to a slate of Brazilian steel makers. Engineering firms also were big winners, while oil and mining shares helped boost foreign markets even before the Wall Street open.
"I applaud the president-elect. This is the right category of stimulus that the country needs," says Tom Busby, CEO at Day Trading Institute in Mobile, Ala. "I see benefits from this not only domestically but globally, so I think this is the right song to play."
A group of industries as diverse as builders to internet companies could benefit from the focus on rebuilding the national infrastructure, the focus of which will be both on construction and communication.
But while there's plenty of enthusiasm now, market experts are warning a cautious approach in which investors should nibble their way in and wait to see if Obama's plans will be realized under the economic constraints his administration will face.
"One of the things you have to consider is when fast money charts start chasing a stock or a group, the stocks go too far too fast," says Richard Sparks, senior analyst at Schaeffer's Investment Research in Cincinnati. "It's only with a little caution that I would say wade in. The market has been extremely volatile."
Where to Play
While Caterpillar has been one of the names most often mentioned to gain from the infrastructure focus, Sparks likes some of the smaller companies in the field.
Monday's surge brought some companies to near 52-week highs, and Sparks backs Granite Construction among them. The Watsonville, Calif.-based civil contracting business has doubled in share price over the past six weeks and is poised for greater gains.
Other stocks Sparks is watching include Sterling Construction , which also has doubled since Nov. 21, and Aecom Technology , which provides technical and managerial services to companies around the world and was trading in the $15 range as recently as late October.
For Investors
Video: Time to Buy Oil Services and Tech
Market Pros: Prepare for Depression and Deflation
Catch This Multi-Month Rally
In line with the technology theme, Busby believes Microsoft could be in an advantageous position not only because of the infrastructure play but also because of the close relationship between Obama and Microsoft leader Bill Gates.
And Busby also is playing Northrop Grumman , which is barely off its 52-week low but in a position, he says, to rebound because of the increased demand for engineering services.
But Busby also is an advocate of careful investing in the group.
He advises taking an initial step on Jan. 2 as the new year begins, then waiting 15 days to see if the position improves. At that point he would invest more, then wait until the end of the month to calibrate gains again. If the group is higher Busby advocates making a stronger move, but if the group falls he advises taking some off the table.
"Remember this economy is a big Mama, and you don't get a big Mama excited until you see big results," Busby says. "You want to go small until you've seen actual stocks tell you you've made good decisions before you commit."
A slew of other companies were rolling through Monday's gains on the infrastructure play.
Brazilian steel makers Siderurgica Nacional and Gerdau both rallied. In engineering, some of the big movers were Jacob's Engineering , Shaw Group and Fluor .
Busby also thinks green companies are likely to do well next year, but he advocates a stock-picker's approach rather than betting on entire sectors.
"I think you've got to be nimble. It doesn't happen overnight," he says. "I'd be very careful."
© 2008 CNBC.com
URL: http://www.cnbc.com/id/28112475/
CNBC Million Dollar Portfolio Challenge
Squawk on the Street
Question: According to the story, Obama's Stimulus Proposal Lifts Infrastructure Stocks, which company does Tom Busby like?
Answer: Microsoft
Worth Reading
Subscribe to EF Hutton via Email
Obama's Stimulus Proposal Lifts Infrastructure Stocks
INFRASTRUCTURE, STOCK MARKET NEWS, BARACK OBAMA, STIMULUS PLAN, ECONOMY, CONSTRUCTION, CATERPILLAR, MICROSOFT, GRANITE CONSTRUCTION, STERLING CONSTRUCTION, AECOM TECHNOLOGY, NORTHROP GRUMMAN
CNBC.com
With President-elect Barack Obama pledging to rebuild the economy from the inside out, infrastructure companies stand to reap a substantial bonanza.
Obama has promised a program not seen in half a century to shore up the national highway system, erect public buildings and reconstruct the nation from top to bottom.
A $136 billion infrastructure component is the keystone of a potentially $1 trillion Obama economic stimulus plan that moves beyond providing one-time rebate checks to taxpayers and escalates into generating employment and business opportunities for struggling companies.
Though he does not take office for more than a month, Obama's intentions already have had an impact.
Stocks surged Monday on the stimulus hopes, with big winners ranging from Dow component and construction equipment leader Caterpillar to a slate of Brazilian steel makers. Engineering firms also were big winners, while oil and mining shares helped boost foreign markets even before the Wall Street open.
"I applaud the president-elect. This is the right category of stimulus that the country needs," says Tom Busby, CEO at Day Trading Institute in Mobile, Ala. "I see benefits from this not only domestically but globally, so I think this is the right song to play."
A group of industries as diverse as builders to internet companies could benefit from the focus on rebuilding the national infrastructure, the focus of which will be both on construction and communication.
But while there's plenty of enthusiasm now, market experts are warning a cautious approach in which investors should nibble their way in and wait to see if Obama's plans will be realized under the economic constraints his administration will face.
"One of the things you have to consider is when fast money charts start chasing a stock or a group, the stocks go too far too fast," says Richard Sparks, senior analyst at Schaeffer's Investment Research in Cincinnati. "It's only with a little caution that I would say wade in. The market has been extremely volatile."
Where to Play
While Caterpillar has been one of the names most often mentioned to gain from the infrastructure focus, Sparks likes some of the smaller companies in the field.
Monday's surge brought some companies to near 52-week highs, and Sparks backs Granite Construction among them. The Watsonville, Calif.-based civil contracting business has doubled in share price over the past six weeks and is poised for greater gains.
Other stocks Sparks is watching include Sterling Construction , which also has doubled since Nov. 21, and Aecom Technology , which provides technical and managerial services to companies around the world and was trading in the $15 range as recently as late October.
For Investors
Video: Time to Buy Oil Services and Tech
Market Pros: Prepare for Depression and Deflation
Catch This Multi-Month Rally
In line with the technology theme, Busby believes Microsoft could be in an advantageous position not only because of the infrastructure play but also because of the close relationship between Obama and Microsoft leader Bill Gates.
And Busby also is playing Northrop Grumman , which is barely off its 52-week low but in a position, he says, to rebound because of the increased demand for engineering services.
But Busby also is an advocate of careful investing in the group.
He advises taking an initial step on Jan. 2 as the new year begins, then waiting 15 days to see if the position improves. At that point he would invest more, then wait until the end of the month to calibrate gains again. If the group is higher Busby advocates making a stronger move, but if the group falls he advises taking some off the table.
"Remember this economy is a big Mama, and you don't get a big Mama excited until you see big results," Busby says. "You want to go small until you've seen actual stocks tell you you've made good decisions before you commit."
A slew of other companies were rolling through Monday's gains on the infrastructure play.
Brazilian steel makers Siderurgica Nacional and Gerdau both rallied. In engineering, some of the big movers were Jacob's Engineering , Shaw Group and Fluor .
Busby also thinks green companies are likely to do well next year, but he advocates a stock-picker's approach rather than betting on entire sectors.
"I think you've got to be nimble. It doesn't happen overnight," he says. "I'd be very careful."
© 2008 CNBC.com
URL: http://www.cnbc.com/id/28112475/
Subscribe to:
Posts (Atom)