Krugman: Rebound won't be quick

[heyheybooboo]

Rebound won't be quick
Don't be dazzled by ?glimmers of hope' Obama, some others are seeing.

1. Things are still getting worse. Industrial production just hit a 10-year low. Housing starts remain incredibly weak. Foreclosures, which dipped as mortgage companies waited for details of the Obama administration's housing plans, are surging again.

2. Some of the good news isn't convincing. The biggest positive news in recent days came from banks, which have been announcing surprisingly good earnings. But some of those earnings reports look a little ? funny.

3. There may be other shoes yet to drop. Even in the Great Depression, things didn't head straight down. There was, in particular, a pause in the plunge about a year and a half in ? roughly where we are now. But then came a series of bank failures on both sides of the Atlantic, combined with some disastrous policy moves as countries tried to defend the dying gold standard.

4. Even when it's over, it won't be over. The 2001 recession officially lasted only eight months. But unemployment kept rising for another year and a half. The same thing happened after the 1990-91 recession. And there's every reason to believe that it will happen this time too. Don't be surprised if unemployment keeps rising right through 2010.

I've never been a real 'rah rah' guy but I understand the need for Our Fearless Leaders to pump up our consumer driven economy. Two things in Krugman's opine jump out at me:

1) I've heard grumblings over the last 4-6 months that the commercial real estate 'foot' begins to drop in 2H09. Those 3-5 year commercial loans from 04-06 are coming due and folks are looking for refinancing of devalued projects in a depressed market with poor prospects for a quick upswing.

2) New Jobs - Where will they come from? We are losing 650k jobs a month and need to generate an additional 135k jobs a month to cover workforce expansion.

Add to that the need to reinvent corporate organizational development and operational goals.


Can someone find a few 'Rosy Scenarios' for us all ???