Goldman Sachs, Merrill Lynch: Recession in 2008 unavoidable

[BSD]

"CBS/AP) The biggest investment bank on Wall Street has a grim prediction about 2008: a recession is definitely on the way.

Goldman Sachs on Wednesday said it believes the housing slump and recent credit market turmoil will spill over into the broader economy this year. And, by the time it's all over, economists believe the Federal Reserve will cut interest rates to 2.50 percent from its current 4.25 percent."

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"Goldman Sachs sees US 'falling into recession

WASHINGTON (AFP) - Investment giant Goldman Sachs said Wednesday the US economy is in recession or will soon be in a downturn stemming from housing and credit woes.
"The recent data suggest that the US economy is falling into recession," Goldman Sachs economists said in a research note.

"We expect economic activity to contract modestly through late 2008, followed by a gradual recovery in the course of 2009."

Goldman's views came two days after Merrill Lynch said a recession was "a present-day reality" for the world's biggest economy.

Goldman Sachs said it expects the Federal Reserve to cut interest rates aggressively, bringing the federal funds rate from 4.25 percent to 2.5 percent by late 2008.

Goldman Sachs cut its 2008 growth forecast for the US to 0.8 percent from 1.8 percent, and sees a US recession during the year with gross domestic product declining in the second and third quarters."

Continued...

 

[TWI]

I bet they will be buying the dip they are creating.
Certainly when this hit the wires yesterday commodities took a hit and I lost some cash.
Still, all bodes well for precious metals.

 

[fibonelli]

An engineered depression?

"..............The Establishment's strategy appears to depend upon the sequence:

* The rapid decomposition of the FRN (Federal Reserve Note) - which the Establishment doubtlessly understands it cannot prevent, but which it expects to be able to employ to its political advantage - will create economic chaos and social unrest.
* Economic chaos will rationalize replacement of the FRN by the Amero; and acceptance of the Amero by common Americans will grease the skids for absorption of the United States into the North American Union.
* The social unrest attendant on economic chaos will serve to excuse the imposition of a para-militarized police state on Canadians, Mexicans, and Americans alike. And thus,
* The dark nature of the North American Union - a hemispheric totalitarian state run in the interests of supra-national big business and high finance - will finally meet the light of day, when it is too late for common people to do anything about it except to wonder why they never did anything about it........................".

The Silver Bear Cafe

 

[BSD]

Here is a nice explanation of the sub prime crisis in graphics:

BBC NEWS | Business | The US sub-prime crisis in graphics

 

[JTrader]

I bet they will be buying the dip they are creating.
Certainly when this hit the wires yesterday commodities took a hit and I lost some cash.
Still, all bodes well for precious metals.

Absolutely. As recessions/depressions bite, precious metals prove to be the safest place to invest.

Personally i like the thought of a shoe box under my bed .

 

[JTrader]

Interesting that cable has eased of in recent weeks back below $2.
This is not a sign of $ regaining strength - both currencies are getting weaker - due to global inflation.

 

[TWI]

Certainly not. It is just that financial services make up such a large slug of the UK economy that the banking crisis is gonna hit cable really hard even against the monopoly $.