Over the past several months Wall Street experts have been debating whether or not America is headed to a recession, and according to a new CNN poll, a large percentage of Americans think that the country has already entered a recession.Concerns over a possible recession have been lingering for most of the year, as housing prices have steadily fallen, while prices for gas and food continue to rise. But the sentiment really started to take hold this summer as the subprime mortgage meltdown started to spread. These concerns are only going to grow today after a weak Bank of America Corp (NYSE: BAC) earnings release.
As the weak housing market continues to deteriorate CNN finds that nearly half of all Americans are now under the impression the country is already in a recession. According to its recent poll, 46 percent of U.S. residents believe the country is in a recession, with 51 percent thinking we have not.
The report also showed that black Americans are taking a much more pessimistic stance on the current economy. CNN shows that 69% of all black Americans feel the country is in recession, while only 42% of white Americans think this is the case.
I found an article from today's Los Angeles Times that took a poll of leading Wall Street chief executives, and it shows that the percentage of executives who think a recession is coming has been growing as well. It shows that the Financial Services Forum semiannual survey illustrates that leading executives now see a 37% chance of a recession hitting the economy in the next 12 months. The last time this group was polled was back in April, when the same executives cited only a 24% chance of the dreaded "R" word hitting the country.
An article from IndiaDaily points to the record lows for the dollar, and weak Bank of America earnings as a signal that America has already fallen into recession. It points to lower home sales, lower car sales, and rising unemployment.
Earlier this week, former U.S. Federal Reserve chairman Alan Greenspan stated that he thinks there is a definite possibility of a recession looming, but put the odds at less than 50-50. Greenspan warned that:
"It's fairly apparent that even though the credit crunch is easing, its residual ... is going to slow this economy down to a certain extent, and indeed, you can see it, not in the third quarter data, but almost certainly going to see it in the coming quarter."What do you think? Has the country already entered into a recession? If not, do you think a recession is on the horizon?
[Photo: jenn_jenn]
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer
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Reader Comments (Page 1 of 1)
10-18-2007 @ 3:19PM
The_Village_Idiot said...
I think it's already here.
10-18-2007 @ 4:30PM
steveinDenver said...
If everybody thinks and acts like there's going to be a recession, then we'll probably have one. Never mind a steadily growing and stable economy. Never mind competitive interest rates. Never mind spectacularly low unemployment. Never mind that the federal deficit is going down...even in a time of war!!...thanks to exploding tax revenue. Never mind that the impact of this silly "subprime crisis" on banks seems to have been eaten by them already...in 1 quarter!; and that housing is quite strong in most municipalities that don't have other economic problems. Ignore the new records being set by the DOW and other markets! Never mind the facts, dammit!!! Lets have a recession!!! THE SKY IS FALLING!!! THE SKY IS FALLING!!!
10-18-2007 @ 4:51PM
RL Flamisch said...
Steve in Denver......your right, everyone who wants a job has one and can someone tell me why when the news talks about this housing recession where prices have fallen 2-3% nobody mentions how in most of these places the same house appreciated 100% over the past 5 years. I read the party is over, no more using the home as an ATM, did every single person run out and extract all there home equity over the past 10 years?? I know I didnt and I'm sure there are millions out there like me. I understand the banks may suffer, like bank of america who only made 3 billion instead of 5 billion this quarter(poor bastards) as some of these loans adjust but hey the people losing houses are investors who took on multiple risky mortgages, I've yet to see any families standing on the street corner cause they lost there house cause their ARM adjusted, mainly because if it is their primary residence, not an investment, they can protect themselves with something called bankruptcy, sure the banks get stuck and thats awful but hardly armageddon. But your right hell with the facts, the sky is falling, I work I pay my mortgage, but boy is it bad out there, I just watched 60 Minutes and boy its pretty bad!
10-18-2007 @ 4:57PM
Tom said...
Dollar is weakest in decades, oil is way over $85, mortgage/credit problems are bombing banks, housing market continues to fall, grocery and energy prices are up sharply, a huge illegal alien problem, inflation is rising, medical costs are soaring and manufacturing jobs are going overseas...
...and we have a $12 BILLION A MONTH war that we can't seem to win.
Isn't the current administration is doing a fine job?
10-18-2007 @ 4:59PM
steveinDenver said...
R L Flamisch
You hit the nail on the head about the housing component. I've been in the building and real estate business here in Denver for 30+ years, and in the particular area I'm building in now properties have appreciated 20+% over the last year. When I prove this to people they are astounded and always react with "but the papers and TV are saying its bad!!!"
10-18-2007 @ 8:36PM
JohnLasVegas said...
Wow, you sure can tell who is Republican and Democrat in their responses. Tom, you're right... the 12 billion/month war is enough to drain our coffers. I feel we have many improvments to make before the government bails these people out... that's just more money in the red! I'm comfortable in my life and job and don't feel like a recession is here but can sense there is a change in the air. I work for Toyota and sales are strong but slowly dipping just a tad bit. Overall, recession is relative... some people are getting hit left and right and other peoples lives aren't changing a bit. We have to understand, that our country is huge and saying a blanket statement like "our whole country is in a recession" is false, and only parts or some people are in a recession.
10-19-2007 @ 9:24AM
silvio said...
we have to remember about the baby boomers that are no longer making the economy grow but depending on the social security. We are getting close to the edge where a big boom is going to happen.
10-19-2007 @ 4:43AM
Patricio said...
Steve and RL are correct, we have just moved from Miami to Seattle - Miami is in a recession, and our house is still on the market. But they have caused their own crisis through over building, speculation, sky high taxes, and outrageous homeowners insurance. Seattle's market, like Denver is still appreciating. Let's not look at the economic facts as stated. Let's try and create a recession through the media for political purposes. I am still looking for a Republican and Democrat in Congress with the political courage to propose another Graham-Rudman act - then you'll see the dollar strengthen again once we cut out the excess earmarks...
10-21-2007 @ 3:12PM
WhoseAskingU said...
Well 3rd and 4th quarter profits don't look good. The dollar is dropping in value. Oil is spiking. Homes are losing value. Many consumer's are over extended and lost equity so spending should slow significantly. Unemployment and layoffs are increasing. Subprime is not contained. So I say we're already in a recession or atleast heading that way. Depends on where you live in some areas like Michigan I think they are in recession already. The boom areas of California, Florida, Arizona and Las Vegas, probably think they are in recession right now too.