Fed predicts economy will get worse

money.cnn.com...

NEW YORK (CNNMoney.com) -- The U.S. economy is likely to deteriorate further this year and unemployment will rise into 2010, according to the latest forecasts from the staff of the Federal Reserve.

This bleak forecast was presented to Fed policymakers when they met last month and lowered interest rates to near zero. Low interest rates are one key tool the central bank uses to try to spur economic activity.

According to the minutes from that meeting, the central bank is now predicting that gross domestic product, the broadest measure of economic activity will fall in 2009.

"I think that the Fed is really very scared right now -- like everybody else -- and they want to pull out all the stops," said David Wyss, chief economist for Standard & Poor's.

Several thoughts come to my mind. Among them is the fact that starting with Black Friday there was a very apparent "clamming up" by the stuffed suits in Washington and a virtual absence of any scathing rhetoric surrounding the recession. Small comments may have been made here and there, but even while they were meeting behind closed doors to discuss the fact that they believe this is going to get much worse, the message being sent to the American people was "get out there and take advantage of the sales to provide yourself a consumer's Christmas! Everything will be OK, we're fixing this." Seems like the people who have been concerned about their jobs or their abillity to get out of debt in the next few years were wise to scale back their consumerism this Christmas season.

I also am an ATS member, afterall, so I gotta take that cynical viewpoint towards the government on issues like this. That part of me aknowledges the fact that our government has conspicuously tried to keep their tone several notches more chipper and optimistic than the facts indicate the situation called for. They waited a year before even admitting that we were in a recession, now they are beginning to nudge us slowly towards acceptance of a "deep" recession... Could this actually be a depression? I mean just a few weeks ago the official government statement was that we were looking at a recession lasting into mid 2009. Now, without the markets doing much of anything worth noting, they're talking 2010... or later?

My final thought is related to the Fed chairman position. Considering the position is a puppet post anyway and the person sitting in it is more of a figurehead who makes statements based on what his overlords want, would it be possible for Obama to select someone a little easier on the eyes to replace Bernanke after he's sworn in? I'm really tired of seeing that Muppet with a Brillo pad glued to his face on every news report I read about the economy. I'm thinking it would be a great change of pace and good for morale if the next fed chairman was, say, Megyn Kelly or Victoria Silvstedt or hell, I'd even settle for Trish Stratus from the WWF... anybody whose face doesn't look like their neck just vomited.

Fed predicts economy will get worse

No way. They must be joking. Really?? How is that possible?

We're all pretty f@cked at this stage.. looks like its only gonna get worse as well.

My government is also feeling some severe aches and pains. The main problem with us is that we cant print as much as we want.

As long as you can keep your Job you should be ok. Just tighten your belt a bit.

Also, this means that the US will step out of the Global limelight and into one corner of a Quad Polar World dictated by economic AND military power.

Its kinda strange to see this transition coming, hopefully it doesn't end up a bloody mess.

Lol. Masters of the Obvious!! You don't need to be an economist or Einstein to see that it's going to get hella worse.

On a side note:

The sky is blue.

obama is going to give some tax cuts and money in people's hand's

he is only able to move/change within the constructs of a system with the financial system and corporate lobbyists at the top.......so he will give more money to people to ensure that people have the means to continue to pay the banks the (at least) interest on there mortgage debt.......i think tax cuts for business will help as well as cutting the capital gains tax and could help cushion the fall in this downturn and help keep things from getting bad enough where the foreign creditors will really stop supporting us via credit........also i think the FED via JP morgan is trying hard to save the FIAT money credability by surpressing the price of Paper Gold thru 70 billion worth of SHORT positions in the Gold futures/derivatives market.

Enjoy life in the USA if you still can while it lasts, there is soo much uncertainty and although they may be able to pull some sort of rabbit out of a hat (and avoid a depression) they may not.....(and there agenda is not to save main street it is to save the Wall street /corporate plutocracy gang........

[edit on 6-1-2009 by cpdaman]

the Fed should know, they are instructing the banks which are the lubricant for the dollar-multiplier effect to be tight & stingy with their loans & credit supply.


If a timely natural disaster hit in California and in Michigan,
where 100s of thousands of homes worth 100s billions of dollars,
are in danger of foreclosure or are already owned by the banks...
then some sort of coming-together may take place,

right now, the general public is very distanced from the elite bankers & banking system.
If, the gov't has the HARP technology to prompt earthquakes, now would be the time for the 'big-One' in L.A. to happen. Because there are a small city worth of empty houses sitting there, uninsured no doubt..
which will be needing tobe demolished & carted away after the 7.9 earthquake happens.
But then again, maybe the Fed, and its servant banks are not ready right now for the master clean-up to take place.


Up in Michigan, & Detroit in particular, the vacant house & factory might not get hit by a earthquake, but maybe something like the Eve of Halloween torch parties that Detroit was famous for?

i just feel somethings in the works, intended to unite the citizenry and tackle the job situations... and it isn't a Obama led stimulus package.

Here's a tip for the fed and everyone else in government right now.

It's going to get worse because you idiots are making it worse. Stay the hell out of it and we'll fix it ourselves!!

It's really quite simple.