11. CONNELL: THANK YOU. BURMAN AT WHITE HOUSE. THIS IS SO INTERESTING WE WANT TO GET IMMEDIATE ACTION. RATE CUT WHILE THE ECONOMY IS IN GREAT SHAPE. NUVEEN’S BOB DOLL JOINS US ON THAT. IT’S A GOOD QUESTION, BOB, TRADITIONALLY IF THINGS ARE GREAT MAYBE THAT IS NOT THE TIME TO CUT RATES, I GUESS THE ARGUMENT BASED ON INFLATION. WHAT DO YOU MAKE OF THIS, WHAT THE FED SHOULD DO?>>I THINK THE FED WHERE IT SHOULD BE. THE LANGUAGE CHANGED A LOT, LIKE NEVER HAVE A MEETING WITHOUT RAISING RATES IN THE FOURTH QUARTER. NOW THEY WILL NEVER RAISE RATES AGAIN, I’M EXAGGERATING. I THINK FED FUND RATE IS APPROPRIATE. WE HAVE NOMINAL GDP, REAL PLUS INFLATION RUNNING BETWEEN FOUR AND 5%. THAT PROBABLY MEANS WHERE THE FED SHOULD BE. WE NEED MORE TIME TO SEE HOW NUMBERS COME OUT. THE EMPLOYMENT REPORT TODAY WAS GOOD, IT WASN’T PERFECT. IT WAS GOOD ENOUGH SO. I THINK WE MOVE ON WITH THE FED KIND OF SITTING OFF TO THE SIDE. LET THEM SIT THERE FOR A WHILE. CONNELL: TO THE POINT ABOUT THE JOBS REPORT, BEFORE IT CAME OUT, AT LEAST IN MONTHS PRIOR THERE HAS BEEN DISCUSSION OUT THERE AND DEBATE WHETHER THE ECONOMY IS REALLY SLOWING, MAYBE EVEN HEADING INTO RECESSION. AS YOU SAY, EVEN IF IT WASN’T GREAT, IT DEFINITELY WAS GOOD IN MANY RESPECTS. THAT TAKES THAT TALK OFF THE TABLE, RIGHT? IS THAT FAIR, RECESSION TALK?>>I HOPE SO. I MEAN OUR VIEW ALL ALONG WAS, PROBABILITY OF RECESSION ANYTIME SOON, NOT PROBABLE AT ALL. SIGNS OF SLOWING, YES WE SEE THOSE. MAYBE TIME OF A ECONOMIC CYCLE MATURING SOME BUT NO SIGNS OF RECESSION. I THINK WE SHOULD LEAVE WELL ENOUGH LOAN. WE’LL GET CORPORATE EARNINGS HERE, WHAT COMPANIES SAY ABOUT THE BUSINESSES, WHAT IT LOOKS LIKE GOING FORWARD. A LOT OF CONCERN IN THE FOURTH QUARTER OF COURSE WAS RELATED TO THINGS OVERSEAS. CONNELL: RIGHT.>>THOSE WORRIES ARE STILL THERE SOME DEGREE. IN THE U.S. WE’RE DOING OKAY, THANK YOU. CONNELL: SOME OF IT COMES HERE I GUESS. YOU COULD PICK OUT MANUFACTURING WHICH WE SHOWED ON THE SCREEN WE DID SEE A JOB LAST MONTH IN MANUFACTURING EMMOMENT. THE ARGUMENT FROM THE PRESIDENT, MAYBE MORE SO FROM SOMEBODY LIKE LARRY KUDLOW, SAYING WE’RE NOT WORRIED ABOUT THE ECONOMY NOW. WE’RE WORRIED ABOUT THE FUTURE. SOME ON THE POLITICAL SIDE SAY MIGHT LOOK FOR SCAPEGOAT IF THINGS TURN SOUTH. IF YOU’RE NOT THAT SKEPTICAL, MAYBE THAT IS LEGIT WORRY. MANUFACTURING JOBS DECLINES LAST MONTH. MAYBE THAT IS THE ARGUMENT IN TERMS OF THE FEDERAL RESERVE. THINGS ARE OKAY NOW, BUT LET’S KEEP THEM OKAY?>>YEAH, LOOK, AS I SAID, IN MY VIEW IT WAS GOOD, NOT GREAT. THAT IS WHAT I WOULD PICK ON, MANUFACTURING EMPLOYMENT, RETAIL TRADE NUMBERS WERE NOT GREAT EITHER. CONNELL: YEAH.>>IT IS NOT A SIGN OF A PERFECT ECONOMY. WE DON’T WANT ONE GROWING SO STRONG WHERE INFLATION IS COMING BACK. INFLATION SETTLED IN. CONNELL: THAT IS TRUE FROM INVESTMENT POINT OF VIEW. YOU LIKE IT, GOLDILOCKS STYLE, BOB? WHAT YOU’RE TRYING TO SAY FROM INVESTMENT POINT OF VIEW?>>A BIT SO. I THINK THAT IS A LOT OF WHAT THE RALLY WAS, 20% MOVE UP FROM CHRISTMAS EVE WAS, WE’RE NOT GOING TO HAVE RECESSION. THE ECONOMY IS OKAY. WE ROCKETED PRETTY FAST BUT I THINK THAT IS WHERE WE ARE. NOW THE MARKET IS GOING TO NEED, OKAY, SHOW ME WHAT WILL HAPPEN FROM HERE. I HAVE RECOVERED FROM WHAT I

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8 thoughts on “Bob Doll on US economy: There are no signs of a recession”

  1. Democrats pray every day for a recession, only so they don't look like the complete worthless parasites that they are. :-/

  2. The U.S. economy is in the middle of a new land/property market cycle, a cycle that averages 18-21 years depending on the extent to which monetary policy provides a high or low level of credit for speculation in land and property. A strong indicator that the markets are heavily speculation-driven is the extent to which investors are involved in acquiring property with the intent of rapid turnover (i.e., flipping for quick gains).

    By lowering interest rates to rock bottom after 2008, the Federal Reserve prevented the nation's land markets from clearing the speculation-derived gains realized in the last cycle. Instead, property prices were propped up. Low mortgage interest rates were capitalized by market forces into even higher land and property prices than were reached in 2007. The result is that millions of households (and many businesses) are burdened with historically high levels of mortgage debt. Servicing this debt at low rates of interest is not the issue. Any interruption in income, employment or business revenue will result in huge numbers of mortgage loan defaults, with the incidence of loss per loan higher than was experienced with the collapse of the sub-prime mortgage market in 2008.

    I teach a semester-long course on "The State of the U.S. Economy and Society." The Powerpoint modules used in this course are available on SCI's website for anyone who has the time and interest to look at the situation in depth. The course modules can be accessed here:

    http://www.cooperative-individualism.org/state-of-the-u-s-economy-and-society.htm

    Edward J. Dodson, M.L.A., Director
    School of Cooperative Individualism
    www.cooperative-individualism.org

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