Wednesday, October 12, 2011

Double-Dip Recession Concerns Grow

Tim Iacono speculates on the likelihood of another U.S. recession by summarizing the latest round of economic reports from around the world. All eyes are focused on developments in the Eurozone and questions remain whether France and Germany can collaborate to stave off widespread collapse, but powerful performance in the stock market indicate investors have not lost all hope. Iacono believes U.S. unemployment represents the turning point of a possible recession and that the new numbers do not look promising. He also cites the Economic Cycle Research Institute’s recent report on the prospects of the U.S. and global economy, which places the U.S. on a path to a recession that can’t be diverted. For more on this continue reading the following article from Tim Iacono.

[Following are excerpts from the current issue of the Weekend Update at Iacono Research.]

The latest batch of economic reports from around the world have called into question what had been, in the late-summer up until about a week ago, a growing consensus that the U.S. and other important parts of the global economy are either about to enter another recession or, in the view of some, are already in a new recession.

While clearly affected by the latest moves by European officials to stem the sovereign debt crisis, last week’s impressive bounce for stocks and commodities was also influenced by a fading sense of imminent calamity for economic growth following an increasing number of comparisons between 2011 and 2008 in recent months.

It’s worth taking a closer look at the question of whether the world is now facing another recession – the likelihood and, more importantly, the severity – as it is of utmost importance for any investor. Was last Monday’s low for stocks and commodities an enduring low or will another economic contraction produce even lower price levels in the period ahead?

One thing is clear – the U.S. economy today is much different than it was three years ago and the soaring unemployment rate is a key reason why.

(Continue reading this article at Seeking Alpha.)

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