St Louis Loan Audit: Double Dip Recession May Happen
There has been the widely circulated point of view that the risk of the United States economy falling into a double-dip recession is rising and may be real.
Of course, the chances of this happening is only about a one-in-four chance according to a CNNMoney.com survey of top economists.
But in reality, this new percentage is way up from the 15 percent chances of this happening only months ago according to principal loan reduction experts.
Roughly two thirds of these economists agreed on the fact that a greater chance of this type of recession could happen with the mortgage crisis that continued through 2010.
Approximately three believe there is less risk than there was in the second quarter of 2010. Nine of the economists surveyed left their forecasts the same.
\”We have been talking about ongoing fundamental weakness and the possibility of a double-dip for at least nine months,\” said Bill Watkins, executive director of the Center for Economic Research and Forecasting, who puts the risk at 25 percent, as he did six months ago.
Three of the more bearish economists put the risk of a double-dip as high as 40 percent.
\”There are more and more indications that we have the potential for a double dip,\” said Kevin Giddis, managing director of fixed income at Morgan Keegan.
And consumer optimism is dying fast. Americans are more concerned about their jobs, the uncertainty about taxes and no longer confident that this administration can stop this crisis.
The stronger economic growth that began late in 2009 sputtered out in 2010. Hiring has slowed down at a terrible pace, as has consumer spending according to St. Louis home loan statistics.
The National Bureau of Economic Research (NBER), an independent group of economists charged with dating when recessions begin and end, declared that the Great Recession that started in December 2007 came to an end in June 2009.
But not all was optimistic. The same report said the economy is weak and that a second downturn is very much possible.
Thus, any future downturn of the economy would be a new recession and not a continuation of the recession as if that was any good news to those still facing foreclosure or unemployment. This is simply a financial technicality.
However, experts are quick to point out that double-dip recessions are pretty rare. The last recorded one occurred about 30 years ago in 1980 which was quickly followed by an even deeper downturn in 1981. Let\’s hope history doesn\’t repeat itself again.
To learn more about a FREE St Louis loan audit, stop by Floyd J. Tapia\’s site at www.StLouisMortgageGroup.com. Principal Reduction Program: Better than loan mods. Save your home with a foreclosure stop or if you are underwater. Call us at 314-334-0210 or 877-334-0210.
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