Look Who's Talking. Practically Everyone.

• Print
• E-Mail

" The outlook for the U.S. economy will prove a hot topic when central bankers and economists gather tomorrow for the annual Federal Reserve conference in Jackson Hole, Wyoming. ``The economy has really shown one sign after another of weakening,'' Harvard University Professor Martin Feldstein said in an interview in Jackson Hole today."

" Citigroup Inc. economist Steven Wieting said in a report today that every U.S. downturn of the last six decades has been linked with a global slump. Economists at UBS AG led by Larry Hatheway this week cut their forecast for global growth next year to 2.9 percent from 3.1 percent, close to the 2.5 percent deemed a world recession."

"You don't know what is going to break loose," said former Fed Governor Susan Phillips. The theme of the Fed's Jackson Hole seminar this year, 'Maintaining stability in a changing financial system,' seems more like a prayer to the mountain gods than anything else."

"I have a feeling that it is far from over," said Barry Eichengreen, an economic historian at the University of California at Berkeley. Eichengreen and other experts see mounting credit woes for banks from credit cards and other consumer loans."

Not everyone shares the gloomy outlook. It's just that they are gloomy about different things.

"I don't mean to sound like Phil Gramm...but there has been a huge amount of financial market disruption and the actual impact on the real economy has been limited," said Adam Posen, deputy director of the Peterson Institute for International Economics. Gramm, a former senator, quit as a top economic adviser to Republican presidential candidate John McCain, after he said Americans were "whining" about the economy. So far this year, there hasn't been a negative gross domestic product number."

"And it is very easy to overstate the problems of the financial system, warned Minneapolis Fed Governor Gary Stern in a television interview earlier this week."

" If the dollar continues to weaken, then we may have seen a bottom in gold," said Dale Doelling, chief market technician at Trends in Commodities, in emailed comments. "The stock index futures most likely will break the July lows and this will be very supportive to bonds and the precious metals going forward."

For now, Doelling was unwilling to "sound the all clear" to buy gold, but pointed out that on Monday, traders will have a clearer picture of what lies ahead for the market."

"We suspect that with the dollar's advance on hold for now and energy prices moving higher ... metals will also push higher in sympathy over the next few days," said Edward Meir, an analyst at MF Global, in a research note.

"In addition, we suspect that there will be a good deal of short covering that could also aid the advance," Meir said. "However, this will be a rally in what seems to us to be a general drift lower, as the bearish macro background is still very much with us."