US Wealth May Take 15 Years to Rebound

June 22 (Bloomberg) -- U.S. households may take as long as 15 years to rebuild wealth lost in the recession, said Columbia University professor Edmund Phelps, winner of the Nobel Prize in economics in 2006.

“The only way we’re going to get a healthy, full recovery is over a long period of time, involving households rebuilding their balance sheets and companies in trouble rebalancing their balance sheets,” Phelps said in an interview today with Bloomberg Television. “There’s no silver bullet that’s going to get us into good shape quickly.” (more)

FinWeek June 25, 2009

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Dow Industrials, Transports, S&P Close Below Key Moving Averages

Last week, we mentioned that technical indicators began to turn negative. Technical damage continued today as the Dow Jones Industrial Average, Dow Jones Transportation Average, and S&P 500 closed below their pivotal 50 and 200 day moving averages (first time since March), with all 3 averages registering an RSI sell signal. NASDAQ bucks the trend and remains above both critical levels. (more)

California Collapsing

Washington and Wall Street seem to be treating California as if it were a sideshow in the financial circus of these turbulent times.
It’s not.
California is home to the largest manufacturing belt in the United States and to Silicon Valley, the nation’s largest high-tech center.
California is America’s most populous state with 38 million people. Its GDP of $1.8 trillion is the largest in the U.S. Its economy is bigger than those of Russia, Brazil, Canada, or India. (more)

The U.S. and the U.K. Will Both Default on Their Debt by the End of Summer

As anticipated by LEAP/E2020 as early as October 2008, on the eve of summer 2009, the question of the US and UK capacity to finance their unbridled public deficits has become the central question of international debates, thus paving the way for these two countries to default on their debt by the end of this summer.

(1) At this stage of the global systemic crisis' process of development, contrary to the dominant political and media stance today, the LEAP/E2020 team does not foresee any economic upsurge after summer 2009 (nor in the following 12 months) (more)

Wall Street Journal, June 23, 2009

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