When everyone and their papas are convincingly talking about recession it makes me think about how the media and the general public kept talking about every market dip in the last 2 years, and yet, the market kept on going, up not down. I am not suggesting that Mr. Greenspan is wrong at this point, I am just saying I am not ready to believe we’re up for a recession YET… Still have to see it more to believe.

I read this interesting post from Douglas A. McIntyre at 24/7 Wall St and here are some his points I like the most:

  • The Fed has to be getting nervous. Who wants to see a blood bath on their watch? The agency has the chance to reduce rates again in January. If things are looking bad, they could go a half a point. They could also take the inter-bank lending rate down more aggressively and "open the window" further for big money center banks that may need the cash at year-end.
  • China also has to worry about a sharp downturn in the US. The central government has as much as admitted that an American flu would give China a cold. The Chinese government might decide to make an adjustment to the yuan, as the US Treasury has been begging for. Even a modest adjustment could make a difference. A reset back toward $.12 per dollar on the exchange is certainly possible.
  • US GDP was stronger than expected in Q3, so it has some momentum. A little more gas might keep it running.

Please read Dougla’s article here.