“In commercial real estate and leveraged buyouts, the bloodletting is yet to come,” Soros said in a speech in Europe.
These so-called economists — who are no better at predicting economics than weatherman can predict snow falls — call the recession over, but the recession won’t be truly over until people get back to work and the unemployment rate returns to ‘pre-recession’ numbers. Sure, the ‘Economists’ can call the recession over because they still have jobs and the graphs they look at all day show that technically the recession has ended, but we must remember that the majority for these ‘Economists’ didn’t have a clue what the economy was going to do before this started in Fall of 2008. Their facts and figures also do not largely take into account many factors like fuel, food, and other “peon” necessities.
We are going to grind along the bottom for several years before we see any real growth and we may well see contraction again in the next quarter. There are still a lot of mortgages — both residential and commercial — in the US coming up for renewal in the near future and the US governments spending means taxes will go up there as some point. Both the continuing collapse of the housing market and rising government debt will be a drag on the US economy and where the US economy goes, the world’s follows.
Soros: Major Bloodletting Ahead
Wednesday, November 25, 2009 5:10 PM By: Gene J. Koprowski
Billionaire George Soros believes a “bloodletting” may be in the offing for leveraged buyout firms (LBOs) and commercial real estate investors amid the worst economy in seven decades.
“In commercial real estate and leveraged buyouts, the bloodletting is yet to come,” Soros said in a speech in Europe, reported by Bloomberg News.
“These factors will continue to weigh on the American economy, and the American consumer will no longer be able to serve as the motor for the world economy.”
Bankers across the globe have accounted for $1.66 trillion of write downs and write-offs on bad loans since the start of the credit crisis in 2007.
Moody’s Investors Service reports that the global speculative default rate will peak at 12.5 percent this quarter as the U.S. and European economies struggle. The rate rose to 12 percent in the third quarter, up from 2.8 percent a year earlier, Moody’s reports.
That’s nearly 10 percent in just 12 months.
Soros reckons that, given these facts, the global economic recovery is “liable to run out of steam” and that a “double-dip” recession may emerge in 2011.
Others agree that a double-dip recession may hit soon, but for other reasons.
New York Times columnist Paul Krugman, a Nobel Prize winner, says that the double-digit unemployment rate is undermining confidence, and not just in the financial industry.