The Recession is Over! At least the Latest Survey of Professional Forecasters Thinks So...

"The Survey of Professional Forecasters is the oldest quarterly survey of macroeconomic forecasts in the United States. The survey began in 1968 and was conducted by the American Statistical Association and the National Bureau of Economic Research. The Federal Reserve Bank of Philadelphia took over the survey in 1990.

The Survey of Professional Forecasters' web page offers the actual releases, documentation, mean and median forecasts of all the respondents as well as the individual responses from each economist. The individual responses are kept confidential by using identification numbers." - quoted from the Federal Bank of Philadelphia


"From the forecasters' perception, it looks like the recession may be over" - Tom Starks, Manager of the Philadelphia Federal Reserve Research Department

* * * * * * * * * * * *

According to the survey results, here's what we can expect in the upcoming months:

1) Forecasters See Improved Prospects for Growth, But A More Sluggish Labor Market

They expect a jump in GDP% to go from .4% from last year 3rd quarter to 2.4% in 2009; Unemployment is expected to hold steady, and total payrolls will be down slightly representing lower pay per person due to salary cutbacks, etc.

2. Little Change in the Outlook for Inflation Beyond 2009

The forecasters are raised their estimates for headline and core inflation in 2009. Comparing 4th quarters, headline and core CPI inflation will average 0.7 percent and 1.7 percent, respectively, in 2009. These are up from the previous estimates of 0.4 percent and 1.3 percent in the last survey. Similarly, headline and core inflation in the price index for personal consumption expenditures (PCE) will average 0.9 percent and 1.4 percent, respectively, in 2009, marking upward revisions from 0.6 percent and 1.3 percent previously.

3. Lower Risk of a Downturn in the Current Quarter

According to Tom Stark, Manager of the Philadelphia Federal Reserve Research Department, the forecasters reduced their estimates of a downturn from 1 out of 2 times to 1 out of 4 times.

Other Key Notes from Survey

Job Losses are expected to "lag" behind the economic recovery. They are expected to fall from the current rate of 415,000 losses per month to 25,000 per month in 2010.


To view the entire report of the Survey of Professional Forecasters and to listen to Kathy Dibling and Tom Stark of the Philadelphia Federal Reserve explain the results of the "Survey of Professional Forecasters" - 3rd Quarter 2009.

Click Here for the brief interview and to see the entire report

Fed Officials Warned Against "Timidity"

Article found as reported by the Wall Street Journal's Blog:


By Maya Jackson-randall
JACKSON HOLE, Wyo. — While U.S. Federal Reserve officials will need to be careful not to raise interest rates too soon, the central bank can’t be timid once it actually moves into a tightening phase, according to University of California, Santa Cruz Professor Carl Walsh.

In a paper prepared for a two-day Fed conference here, Mr. Walsh argued that the U.S. must avoid the mistake of the Bank of Japan in lifting rates too soon. The way to do that is to keep rates low past the point at which the economy’s equilibrium, or natural, real rate of interest has risen above zero, he said.

However, once the Fed does start raising the federal-funds rate out of its current record-low range near zero, “it should be increased quickly,” Mr. Walsh argued. “There is no support for raising rates at a gradual pace once the zero rate policy is ended.”

Mr. Walsh is one of several key speakers at the Kansas City Fed’s two-day symposium in Wyoming. Central bankers and academics have gathered here from around the world to discuss monetary and fiscal policy this weekend. A common theme at Friday’s session was that while there are encouraging signs in the economy, the crisis is not over.

Mr. Walsh wrote about a variety of hot-button economic issues in his paper, intended for presentation to a group of academics and international finance officials, and at points criticized the Fed. For instance, Mr. Walsh noted that the Fed has promised to keep rates low for an extended period while also promising to keep inflation stable. That policy seems to be the wrong approach when rates are in a range near zero, Mr. Walsh argued.

He also criticized the Fed’s move to purchase long-term U.S. debt, a unique program the Fed announced earlier this year as a way to help bring down borrowing costs amid signs the economy was deteriorating further.

“If purchases of long-term debt are effective in stimulating aggregate demand, there remains the question of why they should be carried out by the central bank,” he said. “These operations shorten the maturity structure of the Treasury’s outstanding debt.”

He added that the Treasury Department itself can alter the composition of outstanding publicly held debt. “There is no reason this should be done by the central bank,” he said.

Additionally, Mr. Walsh voiced concerns about the Fed’s plans for withdrawing from its costly programs to stem the financial crisis. He noted that one of the ways the Fed plans to tighten is by raising the interest rate paid on bank reserves. In principle, the Fed could drop using a target federal-funds rate as a policy instrument and replace it with a policy that focuses on the rate paid on reserves — something that may be less politically supportable, according to Mr. Walsh. If the Fed plans to make such a change, it will need to communicate it clearly, he added.

“Markets, and the public, appear to understand monetary policy decisions under a regime of targeting the funds rate,” Mr. Walsh wrote. “While a channel system may allow better control of the funds rate, there are potential pitfalls in using the rate paid on reserves as the main instrument and the focus of communications.”

Mr. Walsh also touched on the issue of whether the Fed should be in the business of popping asset-price bubbles such as the recent real-estate bubble and the technology stock boom years prior. While these distortions generate economic inefficiencies, it doesn’t mean that its best to use monetary policy to address them, said Mr. Walsh.

“Ideally, a time varying fiscal tax/subsidy scheme would be a more appropriate policy,” he said. Still, if regulations or subsidies are not enough to mitigate troubles, “central banks cannot ignore financial frictions and financial stability,” he said.

There is little doubt that the U.S. made a mistake by allowing the bubble in housing prices to continue, Mr. Walsh said.

“Monetary policy may also be a blunt instrument for dealing with asset price bubbles, but allowing bubbles to continue and then to burst imposes a tremendous cost on the economy,” he said. “Undoubtedly, future policy makers will be more willing to risk undertaking policies to deflate incipient bubbles, through the difficulty of identifying them with certainty will always remain.”

For a link to the Wall Street Journal's Blog, click here.

Shaquille O'Neal Helps to Debut the World's First E-Fuel MicroFueler

Written by Joanna Schroeder

Published on July 30th, 2009


Who needs a gas station to fill your tank with ethanol? Not you. GreenHouse has just announced the E-Fuel MicroFueler, a portable in-home micro-refinery system that turns organic waste into ethanol. The first installation of the E-Fuel MicroFueler was in the home of none other than basketball great Shaquille O’Neal, who lives in Pacific Palisades a subdivision in LA.

The E-Fuel MicroFueler coverts the organic waste into ethanol for about two-thirds the cost of gasoline. The final product is E100 (100 percent ethanol) which burns cleaner emitting significantly less emissions into the air. The only vehicles designed to run on E100 are the IndyCars which in 2007 became the first motorsports league to sanction a renewable fuel.

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So how does it work? The size of an appliance, it produces the ethanol by converting carbohydrate waste products into sugar. You can use spent beer yeast, algae and non-food based cellulose feedstocks. Once the conversion to ethanol is complete, the system pumps it directly into your car while your car is sitting in the driveway. Not sure where to get your raw material to produce ethanol? No worries. The GreenHouse team delivers raw material and maintains the home-based unit as part of its service package. Whew. And I thought I was going to have to start brewing beer at home to get the bi-products I needed to make ethanol.

For people afraid that it is too “toxic” for your home, GreenHouse claims it is completely safe to produce and pump at home and the only bi-product in distilled water.

It should be noted that O’Neal is an investor in GreenHouse. “Once I saw the GreenHouse business plan, I was committed to GreenHouse and the E-Fuel solution,” he said.

Now, let’s take a moment to reflect on producing E100. In the states, it is not a legal fuel nor are there any cars that can run on E100 (unless you converted your car yourself). The closest you get is a flex fuel vehicle which can run on E85, straight gasoline or any blend in between. So I wonder what vehicle you are to put the fuel in….

Greenhouse’s mission is to bring green technology to peoples’ home and to businesses and is the exclusive distributor of the MicroFueler in Southern California and Arizona.The company is gearing up for commercial distribution by the end of 2009 and is already taking orders.

“With the launch of the first operational MicroFueler in Los Angeles, GreenHouse is making consumer-use of E-Fuel 100 an option for people who want to gain control over vehicle fuel costs and take active steps towards improving the environment,” said GreenHouse CEO, Chris Ursitti.

GreenHoue has partnered with notable companies including Karl Strauss Brewing Company, Gordon Biersch Brewing Company, and Sunny Delight to convert 29,000 tons of liquid waste into fuel using the MicroFueler process.

In a nutshell, this process turns beer into fuel. So now what am I going to drink when I watch the Laker’s game?


Check out the video of the World's First Home User

Land Trade with Mexico and Canada Down 35%

Land transportation trade between the U.S., Canada and Mexico in May was down 35.4 percent from May 2008, the largest decline from the same month of the previous year on record, according to the Bureau of Transportation Statistics of the U.S. Department of Transportation.

Surface transportation trade landed at $47.9 billion, making May the fifth consecutive month with a year-to-year decline greater than 27 percent. May imports from Canada and Mexico to the U.S. dropped 38.1 percent from May 2008, while exports from the U.S. slipped 32 percent.

The value of U.S. surface transportation trade with Canada and Mexico decreased 3.7 percent in May 2009 from April 2009.

Surface transportation consists largely of freight movements by truck, rail and pipeline. About 88 percent of U.S. trade by value with Canada and Mexico moves on land.

The value of U.S. surface transportation trade with Canada and Mexico in May was down 9.9 percent compared to May 2004, a period of five years, and up 16.1 percent compared to May 1999, a period of 10 years. Imports in May were up 12 percent compared to May 1999, while exports were up 21.2 percent.

U.S.-Canada surface transportation trade totaled $29.2 billion in May, down 40.3 percent compared to May 2008. The value of imports carried by truck was 35.7 percent lower in May 2009 compared to May 2008, while the value of exports carried by truck was 33.4 percent lower during this period.

U.S.-Mexico surface transportation trade totaled $18.6 billion in May, down 26 percent compared to May 2008. The value of imports carried by truck was 23.4 percent lower in May 2009 than May 2008 while the value of exports carried by truck was 21.1 percent lower.