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US Recession Fears: UN, Banks, Goldman Sachs Echo Merrill Lynch
Via NY Transfer News Collective * All the News that Doesn't Fit
Earlier article: Jan 8, 2008
Cra****ng Economy: Merrill Lynch Admits US in "Recession"
http://blythe-systems.com/pipermail/nytr/Week-of-Mon-20080107/073857.html
BBC - Jan 9, 2008
http://news.bbc.co.uk/2/hi/business/7179298.stm
Goldman Sachs sees US recession
The investment bank Goldman Sachs has predicted that the US economy will
go into recession in 2008.
Its forecast follows comments from Merrill Lynch, which said that the US
economy is already in recession.
Goldman Sachs said that the slowdown would force the US Federal Reserve
to reduce interest rates to 2.5% from the current level of 4.25%.
But a survey of 62 economists by the Bloomberg news agency suggested the
slowdown might not lead to a recession.
Taking the mid-point of the economists' predictions for US growth in the
first six months of 2008 gave an average figure of 1.5%.
Prepare yourselves
"It's soft economic activity that feels like a recession, but we
probably won't have one," Bloomberg quoted Mickey Levy at Bank of
America as saying.
In a note to client entitled "Prepare for recession", Goldman Sachs cut
its forecast for US growth this year to 0.8% from 1.8% and said that
gross domestic product would decline in the second and third quarters of
the year.
It predicts that US unemployment will rise from the current 5% to 6.5%.
Last Friday's labour market figures, which showed the jobless rate
rising to 5%, set stock markets falling around the world and were
described by Merrill Lynch as the final proof that the recession had
started.
It recommended that investors should reduce holdings in the financial
sector and information technology and opt instead for healthcare stocks.
***
ABC (Australia - Jan 10, 2008
http://www.abc.net.au/news/stories/2008/01/10/2135259.htm
Banks, UN warn of impending recession
ABC news Australia
Another big investment company in the US is warning of an impending
recession in the American economy, while the United Nations (UN) has
warned US economic problems could trigger a world recession.
Goldman Sachs says the American housing and credit woes suggest the US
economy "is falling into recession".
In a research note to clients the investment giant says it expects
economic activity to contract modestly this year, followed by a gradual
recovery next year - and it says the weakening economy will force the
Federal Reserve to lower interest rates to 2.5 per cent by the third
quarter.
Earlier this week Merrill Lynch said a recession was a present day
reality for the world's biggest economy.
UN warnings
Meanwhile, the United Nations has warned of "clear and present dangers"
of the world economy coming to a near standstill this year because of US
housing and credit problems and the weak dollar.
In an annual re****t, the world body forecast global economic growth at
3.4 per cent for 2008, only slightly lower than last year, but said that
under a pessimistic scenario, if US difficulties were acute, it could be
just 1.6 per cent.
The bursting of a housing bubble in the United States last year and a
crisis over subprime mortgages has caused uncertainty across financial
markets around the world, said the World Economic Situation and
Prospects 2008.
The US problems "could trigger a worldwide recession and a disorderly
adjustment of global imbalances," the re****t said.
"The recent global financial turmoil has heightened these risks and
shown them to be clear and present dangers."
- - ABC/Reuters
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