Wednesday, January 6, 2010

US Financial Crisis Far From Over, Economists Say

This Reuters article, published at CNBC, cites major economists who argue that the recession is far from over. I agree. Why?

Mortgage delinquencies continue to rise.

Commercial real-estate is going under, fast.

Residential and commercial construction are down significantly from 2007.

States, cities and counties are going to have to make more cuts because sales taxes, income taxes, and corporate taxes continue to be down significantly from last year and even further down from 2007. Cuts will raise unemployment.

Retail sales figures from XMas show fewer sales than last year, although sales were for higher profits so retailers may be more profitable than last year. Go into a retail store and look at their inventory. Most stores are very bare.

Temporary sales people hired for the holidays will be let go.

The WSJ reported 1/6/2010 page C1 that "the nonmanufacturing sector comprises 88% of the economy."

The US has outsourced manufacturing.

The FIRE economy is still in distress.

How can the recession be over? What is going to drive economic "recovery"?

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