While the rest of the world was being put to sleep…ooooops….. I mean “mesmerized” by electoral developments in New Hampshire, David Rosenberg was busy writing the next President’s script. Rosenberg, the widely respected chief national economist at Merrill Lynch, is the author of a report announcing that a recession “has arrived”.
And though our worsening economic woes are hardly news to even the most brain dead among us , it should give greater urgency to whomever comes out of New Hampshire with an eye on the hot seat of empire this November. This is, in no small part, because they will likely have to take immediate, urgent measures to deal with the cloud of recession descending on the U.S. This BBC story highlights a report by financial giant Merrill Lynch, which states that a recession “has arrived”.
Instead of waiting for slothfully slow and arcane body known as the National Bureau of Economic Research to officialize this predictably bad economic news, Merrill fired off a warning that has global markets scurrying for cover.
Meanwhile, the rest of we humans remain vulnerable to the showers of acid economic rain: rising oil prices, the sub-prime mortgage crisis and a flaccid dollar (On the D train yesterday, I sat next to some shopping bag-bearing Brits I jealously watched as they gabbed about the jumbo jet-fulls of goods just purchased here in the new Tijuana of the Hudson, NYC).
After Iowa and New Hampshire, I’m pretty charisma’d hoped and change’d out and am instead staring at the tea leaves and tatters of Wall Street in search of what the future holds.
Recession in the US ‘has arrived’
The feared recession in the US economy has already arrived, according to a report from Merrill Lynch. It said that Friday’s employment report, which sent shares tumbling worldwide, confirmed that the US is in the first month of a recession.Its view is controversial, with banks such as Lehman Brothers disagreeing.
But a reserve member of the committee that sets US rates warned that it could do little about the below-trend growth expected in the next six months.
It also objected to the use of euphemistic terms for the state of the economy.
“To say that the backdrop is ‘recession like’ is akin to an obstetrician telling a woman that she is ‘sort of pregnant’,” the report said.
There were further signs of the housing slowdown that has sparked off the problems in the US economy in home sale figures.
Pending sales of existing homes fell 2.6%, according to the National Association of Realtors, which saw its pending sales index drop to 87.6 in November, 19.2% below the point it was at a year ago.
The figures were better than expected, however, because October’s index reading was revised upwards from 87.2 to 89.9.