Robert Jung

It's July 2009: Where's That Promised Recovery?

Is it an L shaped recovery or the start of the next recession, Depression, or decession, what ever you want to call it? I am looking to the 30's and 70's for insight. I know history doesn't repeat, but it sure does rhyme. I'd appreciate your thoughts.


On Jul 01 11:41 AM Mad Hedge Fund Trader wrote:

> End of the year says Janet Yellen. I spent the evening with Dr. Janet
> Yellen, the president of the Federal Reserve Bank of San Francisco.
> She thinks that thanks to the government’s tax cuts and spending
> programs, we will be out of the recession by the end of this year.
> After massive inventory liquidation, the auto industry in particular
> is poised for a rebound. Financial markets are now in better condition
> than we imagined possible six months ago. However, the pace of the
> recovery will be frustratingly slow, and it could take several years
> to return to full employment. Since the majority of the Fed board
> members feel that inflation will be stuck at 2% for years to come,
> deflation presents a greater risk than inflation. We are not by any
> means out of the woods yet. Rising energy prices and interest rates
> are a potential drag on the economy. Commercial real estate is at
> the top of her worry list, as falling rents and capital values could
> create a downward spiral, further impairing the banks. China’s wishes
> for an alternate reserve currency are impractical. Answering questions
> as only a UC Berkeley professor can, she further confirmed my belief
> that we are looking at an “L” shaped recovery at best. However, she
> did pour some cold water on my idea that the TBT has further to run.
> “Inflation running up to untoward levels doesn’t make any sense,”
> she averred.