“Everyone is entitled to their own opinion, but not their own facts.” Daniel Patrick Moynihan
I have been saying since February 17th that the US economy is heading for a hard landing, possibly a recession while Mr. Bernanke even after the collapse of world markets on February 28, 2007 tried to calm the markets by saying the economy is sound.
“The world is flat,” tells us Thomas L. Friedman. World markets (specifically China) are collapsing, and they have a great influence on our own economy in the United States. Besides, our own data points the economy in serious trouble.
“Global stocks slumped on Tuesday, with US and European markets driven sharply lower after Chinese equities plunged from record levels on fears of overvaluation, slowing growth and tensions over Iran. Wall Street suffered sharp losses, hampered also by signs of slowing growth in economic activity as durable goods orders fell 7.8 per cent in January.” Financial Times February 27 2007
“Government officials revised their estimate of the U.S economy's fourth-quarter growth sharply lower Wednesday, to a lackluster 2.2 percent annual rate from 3.5 percent, as initial estimates of U.S. corporations' inventory plans proved overly optimistic.” Chicago Tribune March 1, 2007”
Gold is trading at $668 an ounce, a sure sign of uncertainty.
"The US economy last year recorded its lowest rate of labor productivity growth in more than a decade, with growth in output per hour worked falling behind the EU and Japan. The fall casts further doubt on the ability of the Federal Reserve to cut interest rates as the US economy slows.
"Research to be published on Tuesday by the Conference Board, the international business organization, shows that US labor productivity in the whole economy grew by 1.4 per cent in 2006 as slower economic growth was combined with a rapid rise in employment.
"Gail Fosler, the chief economist of the Conference Board, told the Financial Times that the fall in productivity growth was unlikely to be cyclical and the result of weaker gains in services' industries, raising "concerns about the long-lasting productivity impact of information and communications technology". Financial Times on January 22, 2007
How about our trade deficit?
"The U.S. trade deficit widened to a record amount for the fifth straight year in 2006, as American purchases of Chinese goods and imported oil more than offset an increase in exports.
The housing market?
Americans bought far fewer new homes last month, according to government data released yesterday that showed sales fell at the fastest rate in 13 years. Sales of newly built homes fell 17 per cent as the backlog of houses standing empty remained stubbornly high, figures from the Commerce Department showed.