The Oil Drum

It goes without saying that the home equity loan is going extinct. But how far down are we from 2004, when those loans pumped close to a trillion $ into the US economy? And what was the multiplier effect of each of those borrowed $ in further economic activity? If each loaned $ created $3 more in GNP that year, then won't we soon be seeing a $4 trillion reduction in the (inflation-adjusted) GNP? Is there any place left where we can (foolishly) make up the loss?

The damn rating system that they have created here is for beans.

I'm not sure what to make of it either, but I respect their desire to address the high number of comments.

I'd like us all to allow them some space for experimentation. If this doesn't work, they'll yank it and try something else. No need to be mean to people who are volunteering their time to give you a space to have your say.

-André

Yes, of course. Thank you for the pic.

"It doesn't seem to have a very good track record of forecasting recession on its own."

Note flat line until we invade Iraq. The final straw. Price of bunker fuel becomes unmanageable.

"this is turning into a comedy skit."-Dr Housing Bubble

“We shouldn’t, in a sense, be surprised when the data are, are, soft,” Swagel managed to say.

Does the economy need another stimulus package?

“I-it seems, you know, it seems like that’s, that’s enough, uh, enough.”

What might trigger another round of economic stimulus?

“I don’t, I guess I don’t have an answer, I mean, you know, beyond saying we look at all the data and, um — so, my usual line.”

(On the 127 000 jobs lost last month.) 62k + fake BLS Birth/death #'s.

"This is actually becoming a comedy skit. How long can we keep telling Americans the economy is fine without being chased out of Washington with a revolution?".

While the discussion on that is still raging, it does look like monetary deflation being masked by commodity price inflation.

The real question is how will gov't reacts to deflation. Obviously if the economy were permitted to run its natural course, it would be deflation, but rarely does this happen.
I believe that the gov't will put out all stops to prevent deflation. If that trigglers hyper-inflation so be it.

Last week Steve Liesman (CNBC economist) said that if he was given a choice of deflation or hyperinflation. He would choose hyperinflation as the lesser of two evils. I personally would prefer deflation. Hyper-inflation always results in deflation in the end, and creates even worse misery. Pay now, or pay much greater later.

http://www.bad-money.com/ (Kevin Philips)
"Wall street has privatized the profits, but socialized the risks". I couldn't put in any better. The financials rack in the profits creating bubbles, but when the bubble pops and profits turn to loses, they go to the Fed and Congress and demand that they pick up the pieces at the taxpayer expense. What a racket!

It doesn't seem to have a very good track record of forecasting recession on its own.

Any other indicators one should be looking at?

off the top of my head. usually decline in home sales, decline in home values and some other indicators like car sales. links are always changing though. here is a quick search of calculated risk.

Recession: CRE and PCE
http://calculatedrisk.blogspot.com/2008/02/recession-cre-and-pce.html

Recession: Mild or Severe?
http://calculatedrisk.blogspot.com/2008/01/recession-mild-or-severe.html

New Home Sales: Cliff Diving
http://calculatedrisk.blogspot.com/2008/01/new-home-sales-cliff-diving.h...

Some "capital goods" are at the personal level.

Insulation & better windows, high efficiency appliances (including heating & cooling), bicycles that will last generations, high efficiency and fairly small in-fill housing near transit, etc.

Alan