Former FED CHairman says we are in a Recession

[Vteckidd]

SINGAPORE (Reuters) - Former Federal Reserve Chairman Paul Volcker said on Tuesday the U.S. housing sector faced more losses and the economy was in recession even as authorities moved to stabilize the financial system.
ADVERTISEMENT

Volcker said the priority for U.S. authorities in the credit crisis was to stabilize the financial system even though that meant heavy government intrusion.

"The first priority is to stabilize the financial system. It is necessary even though the cost involved is heavy government intrusion in markets that should be private," he said in a speech at a seminar in Singapore.

"House prices in the U.S. are still declining. There are still more losses to come there. The economy, I believe, is in recession."

Volcker is chairman of the board of trustees of the Group of 30, an international body composed of central bank governors, leading economists and private financial sector experts.

He is credited for battling double-digit inflation that flared in the 1970s.

He was chairman of the U.S. central bank between 1979 and 1987, before handing the reins over to Alan Greenspan, and oversaw a sharp increase in interest rates to quell the price pressures.

Volcker was asked by a member of the audience if the massive infusion of liquidity by the Federal Reserve could lead to inflation or stagflation.

"It's not going to be a problem in the short run. Inflation doesn't flourish in the face of recession," he said.

"It's something we have to worry about when we get out of this recession."

The United States has announced various measures to combat a credit crisis that emanated from the U.S. housing market and which has spread globally.

U.S. authorities are expected to announce plans later on Tuesday to pump $250 billion into the country's banks following similar concerted measures in Europe to revive money markets and stave off a global recession.

"I have been around for a while. I have seen a lot of crises but I have never seen anything quite like this one," Volcker said.

"This crisis is an exception. I don't think we can escape damage to the real economy."

(Reporting by Vidya Ranganath

[BobbyFresco]

Gah. No shit but man, this is ugly.

MrKidd, have you personally had losses in business bec of the economy or are you operating at the same sale levels as before?

[Vteckidd]

Gah. No shit but man, this is ugly.

MrKidd, have you personally had losses in business bec of the economy or are you operating at the same sale levels as before?

Well ill be perfectly honest, no my sales have not dropped yet. Ive been pretty steady if not increasing over the last 2 months.

Im in a decline versus MAys numbers, but may was a huge month for me, lots of new items out, etc.

I will say this, most people arent going to see an effect for a few months. If you have a job, and you are working hard, your money will stay the same, and gas prices are going down, items wont go up in price etc.

Where its really gonna hurt is 2-3 months down the road when then new unemployment numbers come out. Thats going to make people panic IMO.

The economy is shirinking, jobs have to be cut somewhere so eventually i think it will affect us.

Case in Point, Saturday i was driving down Barrett Parkway at 2pm in the afternoon. There wasnt 1 person at the dealership, not 1 person walking the lot looking at new cars, or used, and this is prob out of 12 dealerships including car max.

So if you work at a dealsership id be worried, they are going to start closing fast unless the credit problems get fixed soon.

Banks, pretty volatile to be working at right now.

[Alan®]

Well ill be perfectly honest, no my sales have not dropped yet. Ive been pretty steady if not increasing over the last 2 months.

Im in a decline versus MAys numbers, but may was a huge month for me, lots of new items out, etc.

I will say this, most people arent going to see an effect for a few months. If you have a job, and you are working hard, your money will stay the same, and gas prices are going down, items wont go up in price etc.

Where its really gonna hurt is 2-3 months down the road when then new unemployment numbers come out. Thats going to make people panic IMO.

The economy is shirinking, jobs have to be cut somewhere so eventually i think it will affect us.

Case in Point, Saturday i was driving down Barrett Parkway at 2pm in the afternoon. There wasnt 1 person at the dealership, not 1 person walking the lot looking at new cars, or used, and this is prob out of 12 dealerships including car max.

So if you work at a dealsership id be worried, they are going to start closing fast unless the credit problems get fixed soon.

Banks, pretty volatile to be working at right now.

I'm telling you the next bubble to burst will be the car bubble. People aren't buying right now as it is but watch early next year repo numbers will be through the roof. They are already high but they will get worse. I gaurante it.

[BanginJimmy]

This is common with the bursting of any bubble.

1. For years the housing market was rising at a dramatic rate, now they are flopping. Within a year housing prices will stabilize where they should be.

2. Oil futures, they drove up the price of oil to an unstable level and finally it crashed. There is actually a downside to the falling oil prices though. There are MANY reserves in drillable land that it is no longer profitable to drill. This will force the big oil companies to forgo any exploration on those reserves in favor of lower prices imports.

3. Vehicles, right now there is a run on smaller, more fuel efficient cars. Because of that many manufacturers are making drastic cuts and even cutting out completely their full size truck lines. Within a couple of years all those trucks on the road now will be getting too high in milage to be used and they will need to be replaced. This is cause a huge run on those and drive their prices through the roof as the manufactures struggle to re-tool and get the trucks to the lots.

[SRCRX]

Well ill be perfectly honest, no my sales have not dropped yet. Ive been pretty steady if not increasing over the last 2 months.

Im in a decline versus MAys numbers, but may was a huge month for me, lots of new items out, etc.

I will say this, most people arent going to see an effect for a few months. If you have a job, and you are working hard, your money will stay the same, and gas prices are going down, items wont go up in price etc.

Where its really gonna hurt is 2-3 months down the road when then new unemployment numbers come out. Thats going to make people panic IMO.

The economy is shirinking, jobs have to be cut somewhere so eventually i think it will affect us.

Case in Point, Saturday i was driving down Barrett Parkway at 2pm in the afternoon. There wasnt 1 person at the dealership, not 1 person walking the lot looking at new cars, or used, and this is prob out of 12 dealerships including car max.

So if you work at a dealsership id be worried, they are going to start closing fast unless the credit problems get fixed soon.

Banks, pretty volatile to be working at right now.

If you do not have alot of overhead, you might see things go up,
Because of your prices.

I work for an 12volt wholesaler and others around us are dropping off,
no one is walking in to stores and spending $$, I would say that
is what a Recession is.

[0p7!mu5]

my job is actually getting buisness and hiring strangely but thats because im in the medical supply buisness. Its been busy thanks to hurricane season and im tryin to help my roomates get a job there at the moment.

[0p7!mu5]

my job is actually getting buisness and hiring strangely but thats because im in the medical supply buisness. Its been busy thanks to hurricane season and im tryin to help my roomates get a job there at the moment.