Everyone Agrees: Worst. Economy. Ever.
Consumers retrench, economy contracts, gloom and doom spread.
According to economists surveyed by Bloomberg, "The drought in consumer spending may be the worst ever."
Meanwhile, Best Buy (BBY) CEO Brad Anderson, after reporting disappointing earnings and offering a dour forecast for profits going forward, said "Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen."
Not to be outdone, Jeffrey Frankel, of the National Bureau of Economic Research told Bloomberg Monday, "We're in for a pretty serious recession - there's a chance it'll be the worst postwar recession."
As data from last month begins to trickle out, it's becoming clear the global economy basically shut off at the end of September, and went on outright hiatus during October. Despite massive, coordinated efforts by the world's central bankers and lawmakers, fears of a worldwide economic slowdown are becoming a reality.
Circuit City (CC) filed for bankruptcy protection Monday, retail-sales data is bleak, and regulators shut down 2 more American banks over the weekend. Las Vegas Sands (LVS) is fighting for its survival and facing a cash crunch; most agree General Motors (GM), Ford (F) and Chrysler won't survive without a federal bailout.
Commodity prices are tumbling and miners, steelmakers and industrialists are scrambling to adapt to the rapidly shifting economic landscape.
What many once believed would be contained to the small, esoteric world of subprime mortgage-backed securities has spread like wildfire, as years of lax lending and easy credit is being unwound in a manner of months. Firms are slashing jobs at an astounding rate, policymakers still can't seem to get a handle on the housing mess and the effects of the financial crisis are rippling through the global economy.
Estimates for economic growth over the next 6 months are abysmal at best, as American consumers lead the trend towards thrift - both voluntary and involuntary. Most economists agree the holiday shopping season will be the worst in years, and the US economy could contract by as much as 3%.
Gloom and doom are ubiquitous.
What's notably missing -- and this should be considered marginally positive -- is hope. Hindsight often tells us that when the news is at its worst, expectations at their lowest, and when fear trumps rationality at every turn, the worst may be over.
Unfortunately, we've heard that story before. It has yet to come true.
This May, in an ominous prediction, Ellen Hughes-Cromwick, chief economist at Ford and president of the National Association of Business Economists, offered that the entire US economy will "slowly return to health" this year.
Ms. Hughes-Cromwick may have been just a bit premature in her rosy outlook.
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