If the culprit is the US recession, then this must be a nation of 1 billion Rip Van Winkles
Tell us then! What else would you call an investor who gloriously
blames this sudden Sensex fall on the imminent American recession? Yes, the news about the US slowdown had been filtering in since the past one year. But that was only a ‘slowdown’. Factually speaking, it was only on January 9, 2008, when for the first time ever in recent past, a most reputed securities firm [Goldman Sachs (GS)] shouted across fears of a possible ‘recession’ in the US. Goldman Sachs, in a research note, gave the massively unnerving statement that the US economy may already be in a recession, or will fall into one within three months. “The unemployment rate has now risen by more than 1/3 percentage points from the cycle trough. Historically, this has invariably been associated with recession, typically starting immediately and almost always within three months,” said Jan Hatzius, Goldman Sachs’s chief economist for America. This ‘recession’ call is now being mirrored by various other investment bankers as well (Lehman Bros., Morgan Stanley et al).
Recent US economic indicators have been vindicatingly pathetic – retail spending is at a nadir, housing indices are at multi-year lows, foreclosures are way up, unemployment has risen, and stock markets in general have been selling off (see charts for more details). And the fact that the trio of George Bush, Ben Bernanke and Henry Paulson ‘claim’ to have a plan (a $150 billion bailout proposal) has instead furthered the fears of the danger existing in the first place. But will this bailout package help? “It will be too late to prevent a recession as the recession likely started in the fourth quarter, and fiscal action will at earliest provide a boost in the second quarter, and probably not before the third quarter,” said Stefan Karlsson, Deutsche Bank Paris economist, to B&E. For that matter, in the sharpest cut since 1984, Ben Bernanke decided to cut the Fed rate by 75 basis points on January 22 citing “a weak economic outlook and increasing downward risk...” So far so good!
Tell us then! What else would you call an investor who gloriously
blames this sudden Sensex fall on the imminent American recession? Yes, the news about the US slowdown had been filtering in since the past one year. But that was only a ‘slowdown’. Factually speaking, it was only on January 9, 2008, when for the first time ever in recent past, a most reputed securities firm [Goldman Sachs (GS)] shouted across fears of a possible ‘recession’ in the US. Goldman Sachs, in a research note, gave the massively unnerving statement that the US economy may already be in a recession, or will fall into one within three months. “The unemployment rate has now risen by more than 1/3 percentage points from the cycle trough. Historically, this has invariably been associated with recession, typically starting immediately and almost always within three months,” said Jan Hatzius, Goldman Sachs’s chief economist for America. This ‘recession’ call is now being mirrored by various other investment bankers as well (Lehman Bros., Morgan Stanley et al).Recent US economic indicators have been vindicatingly pathetic – retail spending is at a nadir, housing indices are at multi-year lows, foreclosures are way up, unemployment has risen, and stock markets in general have been selling off (see charts for more details). And the fact that the trio of George Bush, Ben Bernanke and Henry Paulson ‘claim’ to have a plan (a $150 billion bailout proposal) has instead furthered the fears of the danger existing in the first place. But will this bailout package help? “It will be too late to prevent a recession as the recession likely started in the fourth quarter, and fiscal action will at earliest provide a boost in the second quarter, and probably not before the third quarter,” said Stefan Karlsson, Deutsche Bank Paris economist, to B&E. For that matter, in the sharpest cut since 1984, Ben Bernanke decided to cut the Fed rate by 75 basis points on January 22 citing “a weak economic outlook and increasing downward risk...” So far so good!
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ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
Top Articles on IIPM:-
'This is one of Big B's best performances'
IIPM to come up at Rajarhat
IIPM awards four Bengali novelists
IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
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Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...domain-b.com : IIPM ranked ahead of IIMs
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