Recession is coming.... Alert to all

[Admin]

Recession is coming... make your own judgment, don't panic! Do what is wise. (example: 1980-82, 1991 recession , 2001-2002 recession and now officially on 08/Oct/2008 - tendative period 18 months).

A recession is a contraction phase of the business cyle or "a period of reduced economic activity.

The recession looks very eminent. It is really time to take pro active steps to avoid a painful time in the next two years which is how long the is expected to last.The United States is headed for a recession that will be "much nastier, deeper and more protracted" than the 2001 recession, says Nouriel Roubini, president of Roubini Global Economics.

10 reasons a recession is coming...

[LIST][*]The rapid deterioration of our Alliance Super Spender outlook for the first 90 days of 2008."[*] Our analysis of the latest labor statistics. [*]The continuation of the credit and housing bubble burst into 2009. [*] The likely spiraling negative impact of home prices dropping 10% or more and equities valuations from the recession on super-spender spending. [*] The "too little/too late to the party." [*] The historic low default rates of speculative grade bonds. [*] The profit recession in financial services. [*] 71% of ALL stocks are in a bear market already. [*]The key Institute for Supply Management index has contracted to 47.7%. [*] The reversion of all leading indicators of the economy into recession levels. [/LIST]

Suggestions:
1. Don't change jobs, as companies will retrench based on 'last in first out'.
2. Don't take any loans; buy homes, properties with loans, or even cash. Keep as much cash as possible.
3. Sell any stocks you can even at lower prices.
4. Take money off from Trust Funds.
5. Don't believe in huge sales forecast from customers, be extremely prudent, lowest inventories, reduce liabilities.
6. Don't invest in new capital.
7. If you are selling homes/ properties/ cars, do it now, when you can get good prices, they are going to fall.
8. Don't invest in new business proposals.
9. Cancel holiday plans using credit cards.
10. Pay off as much of personal loans, private loans, as debt collection will be hastened.

In general, be prepared for the worst. But always expect and hope for the best

Stay cool, wait, and if you took all of the above actions and more, you probably will be better off then many. This is not a rumor.

Bear Stearns is the first of many banking and financial institutions that will start falling in the not too future. If Bear Stearns can fall, so can JP Morgan, Citibank, HSBC, and the whole world. US economy falls, the rest will crumble. 'This is the biggest housing slump in the last four or five decades: every housing indicator is in free fall, including now housing prices.'

Europe may be a little stronger, but not China, another giant place!
India and other self economic countries will be the most protected, but not gullible.

Malaysia will see few significant impacts.

[Admin]

What is a Recession?

In economics, the term recession is generally used to describe a situation in which a country's GDP, or gross domestic product, sustains a negative growth factor for at least 2 consecutive quarters. I say generally because recession can be defined differently by different economists. Just as there is an agency to define the measure of inflation; the official agency in charge of declaring that the economy is in a state of recession is the National Bureau of Economic Research (NBER). NBER's definition of recession is a bit more vague than the standard one that was described above; they define recession as a "significant decline in economic activity lasting more than a few months". For this reason, the official designation of recession may not come until after we are in a recession for six months or even longer. Some economists also suggest that a recession occurs when the natural growth rate in GDP is less than the average of 2%. Typically, a normal economic recession lasts for approximately 1 year.

Causes of Economic Recession
This is another staunchly debated topic; but the general consensus is that a recession is primarily caused by the actions taken to control the money supply in the economy. The Federal Reserve is responsible for maintaining an ideal balance between money supply, interest rates, and inflation. When the Fed loses balance in this equation, the economy can spiral out of control, forcing it to correct itself. This is precisely what we have seen in 2007, where the Feds monetary policy of injecting tremendous amounts of money supply into the money market has kept interest rates lower while inflation continues to rise. This, coupled with relaxed policies in lending practices making it easy to borrow money; the economic activity became unsustainable resulting in the economy coming to a near halt. It is also said that recession can be caused by factors that stunt short term growth in the economy, such as spiking oil prices or war. However, these are mostly short term in nature and tend to correct themselves in a quicker manner than the full blown recessions that have occurred in the past.

Effects of a Recession
An economic recession can usually be spotted before it happens. There is a tendency to see the economic landscape changing in quarters preceding the actual onset. While the growth in GDP will still be present, it will show signs of sputtering and you will see higher levels of unemployment, decline in housing prices, decline in the stock market, and business expansion plans being put on hold. When the economy sees extended periods of economic recession, the economy can be referred to as being in an economic depression.




US Manufacturing Activity Falls To 26-year Low
Monday, November 3rd 2008

A key index of the nation's manufacturing activity fell to a 26-year low, sliding into recession territory, according to a purchasing managers group.
The Institute for Supply Management's (ISM) said Monday that its manufacturing index tumbled to 38.9 in October from 43.5 in September. It was the lowest reading since September 1982, when the index registered 38.8. Economists were expecting a reading of 42, according to a survey conducted by Briefing.com.

Top Economists See US Recession Through 2009
Monday, November 3rd 2008

A survey of top economists released Monday shows that the vast majority of them believe the economy has fallen into a recession that will continue throughout all of 2009.
According to the National Association of Business Economists, 90% of the 102 members responding were more pessimistic about the economy than they had been in July.
The economists indicated that a recession is likely to continue at least through the end of next year, with 79% saying the economy will grow less than 1% and 38% saying the economy will shrink next year.

U.S. GDP Contracts .03%
Thursday, October 30th 2008

The economy suffered its biggest decline since 2001 in the third quarter, ushering in what may be the worst recession in a quarter century and boosting the chances of Barack Obama and his fellow Democrats in next week's elections.
Gross domestic product contracted at a 0.3 percent annual pace, less than forecast, a Commerce Department report showed today in Washington. The last major economic data before the election also showed that a record two-decade consumer spending boom ended last quarter as the credit crunch deepened.

Fed Cuts Rate to 1% to Avert Prolonged Recession
Wednesday, October 29th 2008

The Federal Reserve cut its benchmark interest rate by half a percentage point to 1 percent, matching a half-century low, in an effort to avert the worst U.S. economic downturn in the postwar era.

Stocks Face Worldwide Recession Fears
Friday, October 24th 2008

Stocks tumbled Friday, although they managed to close off session lows, as Wall Street joined a worldwide market slump on bets that a recession is imminent - if not already in place.
According to early tallies, the Dow Jones industrial average fell 312 points or 3.6%.
The Dow slumped as much as 504 points in the morning, but came back to within 112 points of breakeven in the final hours before falling back again.
The Standard & Poor's 500 index fell 3.5% and the Nasdaq composite slid 3.2%. All three indexes closed at fresh five-year lows.

World Bank Stocks Fall
Thursday, October 23rd 2008

Banks stocks fell worldwide on Thursday as concerns swelled that soaring loan losses, tight credit and deteriorating economies would overwhelm lenders' efforts to cut costs and preserve capital.
European bank shares tumbled to an 11-year low, and U.S. banks approached a 12-year low.
Goldman Sachs Group Inc set plans to cut 3,300 jobs, or 10 percent of its workforce, people familiar with the plan said, as the Wall Street stalwart copes with an expected downturn in trading and investment banking results.

U.S. Retail Sales Report "Simply Disturbing"
Wednesday, October 15th 2008

Economists say the results of the U.S. retail sales report were worse than already pessimistic expectations, and will put consumer spending on the path to shrinking for the first time since 1991."We have a recession on our hands," said Jennifer Lee, economist at BMO Capital Markets, who noted the 1.2% drop in the headline is the worst monthly fall since June 2004.

Fed Joins Worldwide Bank Emergency Rate Cut
Wednesday, October 8th 2008

The Federal Reserve, working in coordination with other central banks worldwide, enacted an emergency interest rate cut on Wednesday.
The Fed lowered its fed funds rate by a half percentage point to 1.5%. The central bank's statement said the move was necessary because of the worsening crisis in global financial markets.
"The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability," the Fed said.

Dow Hits 5-year Low After Fed Action
Tuesday, October 7th 2008

Wall Street's drubbing continued Tuesday, with a 500-point loss bringing the Dow's two-day slump to nearly 900 points, as the Federal Reserve's plan to loosen credit markets failed to temper investor pessimism.
Fed Chairman Ben Bernanke's dour economic outlook in an afternoon speech added to the day's weakness. And a report showed consumer borrowing in August fell for the first time since January 1998. The Dow Jones industrial average lost 508 points or 5.1%, closing at the lowest point since Sept. 30, 2003.

Dow falls below 10,000
Monday, October 6th 2008

Stocks tumbled Monday, with the Dow Jones industrial average falling below 10,000 for the first time in nearly four years, as European governments' rush to prop up failing financial firms underscored the global reach of the credit crunch.
Credit markets remained tight, with two key measures of bank jitters hitting an all-time high. Treasurys rallied, lowering the corresponding yields as investors sought safety in government debt. Gold rallied for the same reason. Oil dipped. The dollar was mixed versus other major currencies.

As current trends continue we can expect...
$5.00/Gallon Gasoline Nationwide in 2008
Major Stock Market Losses and Market Volatility & Credit Crunch
Record Numbers of Home Foreclosures Nationwide
Large Layoffs and Bankruptcies at Top U.S. Companies