Double-DIP recession anyone?

Are you up for it? I'm guessing that would be the next most ridiculous question next to would you like to win the lottery? As a good part of the population tries to dig out from the recent recession in some way shape or form, there seems to be a partly cloudy or partly sunny forecast on the financial horizon as it applies. And just like which weatherman you listen to, it also applies to which financial prognosticator you listen to (especially in New England). According to Daniel Kruger who writes for Bloomberg.com, U.S. government bonds are signaling almost no chance of a double-dip recession even as stocks and commodities have struggled recently. The 2.34% point gap between yields on the 2 year and 10 year Treasuries is more than double the 20 year average and about the same as 2003 before the domestic gross product rose 3.6%. The yield curve suggests that growth won't slow to less than 1% and that there is only about a 12% chance of another recession in the next year. Conversely, U.S.Chamber of Commerce President Tom Donahue issued a warning at the beginning of this year that the U.S. faces a double-dip recession because of taxes and regulations under consideration by the Democratic Congress and President Barack Obama. Donahue states in an article written by Ian Swanson and published in (thehill.com,2010) "Congress, the administration and states must recognize that our weak economy simply could not sustain all the new taxes, regulations and mandates now under consideration. It’s a sure-fire recipe for a double-dip recession, or worse.” He also goes on to state “We are talking about a massive tax increase in a very weak economy — a tax increase whose clearly intended purpose is not to reduce the deficit, but to pay for more spending.” Donahue has also criticized President Obama and Democratic lawmakers for not doing more to create jobs. So what will it be only time will tell, but I will say that the time is drawing near and my opinion is that we are still in for some gloomy days, however I'm not quite sure that we will see a double-dip recession, but better bring an umbrella just in case.




References:

Kruger, D. (2010, July, 6). Treasuries showing 12% chance of Double-Dip Recession.
Retrieved on July 14, 2010, from http://www.bloomberg.com/news/2010-07-
07-05/treasuries-show-12-chance-of-double-dip-to-fed-as-yields-near-record-lows.html

Swanson, I. (2010, January, 12). US Warns of Double-Dip Recession Because of Dem Policies.
Retrieved on July 14, 2010, from
http://thehill.com/business-a-lobbying/75401-us-chamber-warns-of-double-dip-recession