Saturday, September 26, 2009

Green Shoots



As has been expected this prolonged period of economic decline has been the most severe and the longest downturn in the last 80 years. Unemployment is approaching 10 %, the Federal deficit is setting new records and so is the projected national debt. But many economists, including Mr. Bernanke of the Federal Reserves have been talking increasingly about “green shoots”.
The fact of the matter is that there have been many “green shoots” sightings but most have proven to be almost as elusive as the UFO variety. Although home sales of both existing and new homes have been on the increase for a few months they seem to have stalled during August and durable good orders were below expectations. Add to the above the fear generated from what are the long run implications of the massive amounts of money that has been printed (read inflation and weak dollar) and the high prospects for a jobless slow rebound and the greenness of these shoots start to pale. They are not dead yet but the short term expectations should be tempered until the quality of the “sighting” improve.


I would be interested in your opinion of the movie "Capitalism: A Love Story" if you have seen it.

6 comments:

Elias Maus said...

I think our economy is in a really bad place right now. As a part of this I think that the unemployment rate was expected to be low but not as low as it is to be. People and company's were not prepared for letting go so many workers and others were not prepared for looking for a new job.

Jim said...

Recently, Ben Bernanke declared the recession to finally be over and the expected recovery of the economy is on the horizon. I cannot say that all is well though. Unemployment was just under 10 per cent in the month of August. The Dow is not flirting with the 10,000 mark, but can this been seen as the end of the recession and the official recovery of the market. I'm not quite sure. Benchmark averages of the Dow have are usually seen as more of a selling point for investors and with that will come another drop in the market. There is a very good chance that the market will not remain where it is now. A full economic recovery is still a very long time away in my opinion.

James Talamo said...

With unemployment reaching almost ten percent and with the competition from new industrialized countries the U.S is in desperate needs to find new opportunities for its people. I believe our ever expanding deficit is causing our recession to prolong and putting fear in our major businesses

TK said...

Unemployment is inevitable during the recession. However with the unemployment rate reaching 10%, it has been confirmed that the economy has definitely taken a turn for the worst. I do believe that it will strengthen by 2011, but we all must be patient. The economy, at this point, can't get any worse. The only obvious solution towards healing the economy is to continue the circular flow of money as well as keep looking for jobs.

Justyna Sokol said...

Regardless of what Ben Bernanke says, I believe our economy is not in a healthy state right now. Also, although him, along with other important figures in the economy, believe that the "Recession" is soon to be over, I disagree with them. Yes, the unemployment rate is decreasing once again, but the recession is still not prepared to give up. There are many new workers looking for jobs which are not growing and not appearing anytime soon.

David Walker said...

As the economy had a rapid decline in such a short time, it scared most people. Many were not prepared for the worst that came. As it seems the worst has already came people are prepared for the time when many jobs open up again and people can get back to work. It will be an exciting day when the unemployment rate reaches an all time low.