It takes a Nobel Laureate to figure out the economy sucks?

[marmar]

from Bloomberg:



Nobel Laureates Say Credit Crunch Hurting Growth (Update1)

By Simon Kennedy

Aug. 21 (Bloomberg) -- Nobel Prize-winning economists Myron Scholes and Daniel McFadden predicted the yearlong credit squeeze will inflict more pain on the world economy and financial markets.

The crisis is ``not over and I'm not exactly sure when it's going to end,'' Scholes said today at a conference in Lindau, Germany, featuring 14 Nobel laureates in economics. McFadden said in an interview ``that as the crisis continues you will see a lot of business failures.''

A year since the U.S. housing slump sparked about $500 billion in credit-market losses for banks globally, the world's largest economies are all stumbling as rising borrowing costs combine with record commodity prices to sap growth. The U.S. is close to a recession and the euro-area and Japan contracted in the second quarter.

``The economy has really shown one sign after another of weakening,'' Martin Feldstein, the Harvard University economist, said in a Bloomberg Television interview in Jackson Hole, Wyoming, where he's attending an annual Federal Reserve conference. Feldstein said he is ``much more pessimistic than a year ago'' about the outlook.

Economists at Goldman Sachs Group Inc. today said that countries that account for half of the world economy face recession, while those at JPMorgan Chase & Co. estimate a global expansion of 1 percent this quarter, the weakest in seven years. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aTtYLhidMBuI&refer=home

[angstlessk]

1. where are all these 'losses' going? are the hedge fund managers and their

ilk simply transferring wealth from nations to persons? I know the money is not simply sent to a pyre to be burned...where is all this wealth being transferred to? Dubai? Saudi Arabia?

[Bonhomme Richard]

2. I have come to the conclusion that economist don't know..........

anymore than weathermen. Actually, I think that weathermen have a better track record at predicting.