Reality Comes to Wall Street
The evidence of an impending U.S. recession has been building for months, but most of the Wall Street crowd has been ignoring (or denying) it.
Still, there have been some exceptions. One is Merrill Lynch economist David Rosenberg, who seems unusually attuned to reality for someone on the payroll of a firm that is in the business of selling hopes and dreams.
In "Merrill: Recession Is Already Here," my friend Barry Ritholtz at The Big Picture highlights a report (and a chart) detailing Mr. Rosenberg's latest call on the economy.
Telegraph:
The US has entered its first full-blown economic recession in 16 years, according to investment bank Merrill Lynch.
Merrill, itself one of Wall Street's biggest casualties of the sub-prime crisis, is the first major bank to declare that a recession in the world's biggest economy is now underway.
US Treasury Secretary Hank Paulson has admitted that the US economy faces severe challenges David Rosenberg, the bank's chief North American economist, argues that a weakening employment picture and declining retail sales signal the economy has tipped into its first month of recession.
Mr Rosenberg, who is well-respected on Wall Street, argues: "According to our analysis, this [recession] isn't even a forecast any more but is a present day reality."
That's a slight overstatement. What I believe Rosenberg is saying is that, based upon the unemployment data, a recession is now unavoidable.
Dow is down 600 points since the beginning of the year. 2008 is just over a week old and we're already seeing the curtain down on the three-ring circus known as Wall Street. Mike, any thoughts/predictions as to how far you see the market falling this year? Did I hear correctly when CNN stated that Countrywide may have forged bankruptcy documents? I do not expect 2008 to be a very prosperous year(except for the select few who are really running this show).
Posted by: Bruce | January 08, 2008 at 05:25 PM