Morgan Stanley has issued a full recession alert for the US economy, warning of a sharp slowdown in business investment and a "perfect storm" for consumers as the housing slump spreads. In a report "Recession Coming" released today, the bank's US team said the credit crunch had started to inflict ...
12-13-2007, 04:02 AM
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| Banned  Progressive Philadelphia, PA 
| Morgan Stanley issues: "Full US Recession alert" Morgan Stanley has issued a full recession alert for the US economy, warning of a sharp slowdown in business investment and a "perfect storm" for consumers as the housing slump spreads. In a report "Recession Coming" released today, the bank's US team said the credit crunch had started to inflict serious damage on US companies. "Slipping sales and tightening credit are pushing companies into liquidation mode, especially in motor vehicles," it said. "Three-month dollar Libor spreads have jumped by 60 to 80 basis points over the last month. High yield spreads have widened even more significantly. The absolute cost of borrowing is higher than in June." "As delinquencies and defaults soar, lenders are tightening credit for commercial, credit card and auto lending, as well as for all mortgage borrowers," said the report, written by the bank's chief US economist Dick Berner. He said the foreclosure rate on residential mortgages had reached a 19-year high of 5.59pc in the third quarter while the glut of unsold properties would lead to a 40pc crash in housing construction. "We think overall housing starts will run below one million units in each of the next two years -- a level not seen in the history of the modern data since 1959," he said. Although the US job market has apparently held up well, an average monthly fall of 138,000 in the number of self-employed workers over the last quarter suggests it may now be buckling. "Consumers face what could be a perfect storm," said Mr Berner. The partial freeze on subprime mortgage rates announced last week by US treasury secretary Hank Paulson may help cushion the blow for some banks, but it could equally backfire by adding a "risk premium" that drives even more lenders out of the mortgage market. Like Goldman Sachs, and Lehman Brothers, the bank no longer believes Asia and Europe will come to the rescue as America slows. It has slashed its 2008 growth forecast for Japan from 1.9pc to 0.9pc, and warned that credit stress will weigh heavily on the eurozone. Mr Berner said US demand is likely to contract by 1pc each quarter for the first nine months of 2008, but the picture could be far worse if the Federal Reserve fails to slash rates fast enough. It is betting on a quarter point cut this week, with three more cuts by the middle of next year. "We expect the Fed to insure against the worst outcome," he said. Morgan Stanley is the first major Wall Street bank to warn that it is may now be too late to stop a recession, though most have shifted to an ultra-cautious stance in recent weeks. The bank at first treated the August crunch as a "mid-cycle correction", much like the financial storm after Russia's default in 1998. But the collapse of the US commercial paper market has now continued for seventeen weeks, suggesting a "fundamental deleveraging of the banking system." Mr Berner - known at Morgan Stanley as the "resident bull"- is one of the most closely watched analysts on Wall Street. While he began to turn bearish last April as the credit markets turned nasty, the latest report is written in tones that may is rattle the fast-diminishing band of optimists. Morgan Stanley issues full US recession alert - Telegraph Economists weigh in... Personal opinion is that this will either be an "official" recession...making all the factors...or it will be "unofficial" where the American public "feels" as though it's in a recession and wants change When the Democrats controlled Congress in 1992 and a Republican was in the White House...what did people do come election time? | ||||
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12-13-2007, 04:28 AM
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| Ron Paul 2008  libertarian Fuck Big Government
| I need to start stocking up on survival gear. The end is neigh! | ||||
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12-13-2007, 06:37 AM
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| Dirty Liberal  Democrat South Jersey
| aren't they the same gas bags that issued a full house sell order a few months back predicting a market collapse? | ||||
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12-13-2007, 11:15 AM
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| Deuteronomy 32:41  Paleolibertarian USA
| I wonder how much they made (or lost) on 9/12/2001 ? | ||||
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12-13-2007, 12:05 PM
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| One American Family at a Time.  Idealist The OC, California
| Is it bad that I hope there is a recession? I have wanted to own a home in SoCal, and for the past 6 years couldn't afford it and was smart enough not to buy into SubPrime lending. I am hoping this drag in the economy will be perfect timing to get my family a home of our own. | ||||
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12-13-2007, 01:06 PM
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| I wonder Independent San Antonio, Texas
| If there is a recession we should take it bravely and not try to force our way out of it by depending on borrowed money. The Chinese have been our bankers for a long time now with that giant trade deficit we have with them allowing them to buy up billions of dollors of our debt. What are they going to buy with all those dollors they are accumulating and add on the interest on our debt it is mind boggling. Even with a recession we would live good just not as good as we are now. We need to sacrafice but what politician is asking us to do that. They think that would kill their chances to be president maybe it would, but I want to believe the american people would rise to the occasion. We could continue to borrow but that cannot go on forever or tighten our belts and make it though a reccession. Last edited by Rouger2; 12-13-2007 at 01:39 PM. | ||||
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12-13-2007, 01:23 PM
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| Master Debator Election Moderator  Democrat Omaha, NE
| Originally Posted by IminWonderland Not bad at all. Local guy Warren loves it when recessions come about because everything is selling for cheap. He buys it, hangs on to it until we snap out of the recession, then makes a shit ton of money when things pick back up.
Its how he got his billions. | ||||
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12-13-2007, 05:02 PM
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| Better Dead than Red  Democrat Where America Goes to Talk
| it's all good. this is cyclical, or clinton's fault... either one in all seriousness, i too hope to take full advantage of this though and look to purchase my first home... not fucking bad  | ||||
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12-13-2007, 05:13 PM
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| Dirty Liberal Democrat South Jersey
| Originally Posted by SoFlaJDM my brother is doing that right now. Since he isn't selling it makes him a strong buyer and you can make lowball offers and have people accept them. There are houses that have been sitting on the market for a year right now.
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12-13-2007, 05:34 PM
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| Better Dead than Red Democrat Where America Goes to Talk
| werd the market it horrible right now | ||||
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12-13-2007, 05:48 PM
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| Banned  Conservative Government is another way to say Better Than You
| While it's certainly slow, the prospect of a recession is not definite:
Either way the housing market is entering into a buyer's market. | ||||
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12-14-2007, 04:18 PM
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| Policy Wonk  Pragmatist NEIA
| This isn't cyclical. Junk economic policy had led directly to where we are right now. | ||||
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12-23-2007, 03:48 PM
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| Banned Conservative Government is another way to say Better Than You
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12-23-2007, 04:44 PM
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| Better Dead than Red Democrat Where America Goes to Talk
| morgan stanley>msnbc panel when did you start trusting those liberals at msnbc anyway? | ||||
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12-23-2007, 05:25 PM
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| Banned Conservative Government is another way to say Better Than You
| Originally Posted by SoFlaJDM Why?
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12-23-2007, 05:57 PM
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| Better Dead than Red Democrat Where America Goes to Talk
| Originally Posted by ballz2wallz why trust a source for the info that agrees with your agenda, then ignore the same source when it contradicts it?
is that where your debate style is headed? | ||||
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12-23-2007, 07:48 PM
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| Banned Conservative Government is another way to say Better Than You
| Originally Posted by SoFlaJDM When have I ever disagreed with them?
Or is that something you just want to claim cause it works for your arguments, despite the fact that this is not even the point of this thread, and you'd rather talk about something completely unrelated to the topic at hand? | ||||
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01-03-2008, 03:45 PM
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| Banned Progressive Philadelphia, PA
| After six years of uninterrupted growth, the outlook for the U.S. economy in 2008 has darkened considerably in just the past month. While many economists say it’s too soon to know whether a recession is coming, forecasters say the latest economic figures don’t look promising. “Obviously, the recession risk is rising sharply,” said David Wyss, chief economist at Standard & Poors. “We're getting to near even odds for recession in the first half of the year.” Economists: Recession odds rising - Eye on the Economy - MSNBC.com | ||||
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01-03-2008, 04:01 PM
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| Perpetual Noob Independent
| Must be Bush's fault. The 6 years of expansion were despite Bush, and the recession will be caused by Bush  | ||||
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01-03-2008, 04:04 PM
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| Better Dead than Red Democrat Where America Goes to Talk
| Originally Posted by Phantom he shares some of the blame at the very least, does he not?
are you saying his policies have nothing to do with the economy taking a shit? | ||||
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