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Moreover, consumer spending is weak even with suspect upward revisions. In addition, "(n)ew mortgage and refinancing loan volumes fell 19% in Q2 to" a three-year low. Further, auto buying plans declined to a decade low, likely headed much lower as economic conditions deteriorate. Other big ticket buying plans also dropped to 2008-09 depths when the economy falling off a cliff seemed possible.
In fact, growth indicators overall are rapidly heading south at a time they're already woefully weak. There's no end to decline in sight. Remarkably, negative household assessments of government policy hit record lows, surpassing the depths of the early 1980s recession and Watergate.
As a result, Rosenberg called the US economy "recession-bound, expecting" even manipulated data to show negative Q 3 growth, followed by greater contraction in Q 4 and 2012 Q 1.
"(P)ractically every major variable is" negative. "We are past the point of no return....I can understand the innate need to be hopeful," he said, but it's impossible to dispute reality.
Weakness and imbalances are extreme. American and European sovereign debt are overextended and troubled. "Anyone who thinks this gets contained (especially in Europe) slept through the last financial crisis after Lehman failed."
And when weak economies beg for stimulus, austerity is force-fed, assuring far greater economic pain. It's coming, will deepen and persist because policy measures are opposite of what's needed.
Commenting on the August 4 market rout, Rosenberg said nearly always it signals downturns. Western economies are fundamentally weak. Unlike earlier times when the Fed could cut interest rates, it now relies on "untested methods to underpin investor confidence and the economy."
And if America's economy plunges, so do others even deeper. Hunker down believes Rosenberg and independent economists believing the worst is yet to come.
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