Macroeconomic Advisers On Possibility Of Double Dip

I found this June 10 blog post, titled "The Chances of a 'Double-Dip' are Essentially Nil" by Macroeconomic Advisers to be notable.

Of course, I am not in agreement with those that believe any material further economic weakness will be avoided.  However, many economists feel differently; as I have noted in the post of June 14 concerning the latest Wall Street Journal Economic Survey, "The economists in the survey put the odds of a double-dip recession at 19%.”

Some of my other thoughts on the idea of a "Double-Dip" scenario can be found at this March 8, 2010 post.

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SPX at 1087.62 as this post is written

The "Double-Dip" Scenario

Lately there have been an increasing number of people citing the possibility of a "double-dip" recession. Much of this scenario is predicated upon the belief that as government stimulus spending fades, so too will economic activity.

This March 5 article from CNBC.com summarizes some of the opinions regarding the double-dip reasoning and possibilities.

I find these worries about a "double-dip" recession interesting for many reasons. Perhaps chief among these reasons is that even among those who think a "double-dip" recession is likely, these people don't seem to believe that any further economic weakness will be worse than that which we experienced during the trough set in late '08-early '09.

I'm not sure for the reasoning behind this belief; and I have seen none offered. However, per my previous posts I don't believe this is a logical conclusion.



SPX at 1138.70 as this post is written

Another Forecast Mentioning "Double-Dip" Possibility

Goldman Sachs yesterday came out with a new forecast on the S&P500 price as well as operating earnings, as seen on CNBC.com here:

http://www.cnbc.com/id/31774313

I found the following phrase interesting; as this is another forecast that mentions the possibility of a "double-dip" recession in the future:

"Goldman's current economic view is for below-trend growth through 2010, and it believes the risk of a "double-dip" recession is still significant."

Also in the story it mentions that Goldman raised its operating earnings estimate on the S&P500 to $52 (from $40) for 2009 and to $75 (from $63) for 2010; and its S&P500 price target for year-end 2009 to 1060 from 940.

SPX at 951.13 as this post is written