BBC: The US Recession has arrived

Merrill lynch is apparently speaking to BBC, but not to the American media. It must be Merrill lynch that is causing the blackout of news on the American Recession, because I'm sure that the competent newspersons in the American media would be all over the story if Merrill Lynch had also told them.

And what did Merrill Lynch tell BBC?

The feared recession in the US economy has already arrived, according to a report from Merrill Lynch.

It said that Friday's employment report, which sent shares tumbling worldwide, confirmed that the US is in the first month of a recession.

Its view is controversial, with banks such as Lehman Brothers disagreeing.

But a reserve member of the committee that sets US rates warned that it could do little about the below-trend growth expected in the next six months.

"I am concerned that developments on the inflation front will make the Fed's policy decisions more difficult in 2008," Charles Plosser, president of the Federal Reserve Bank of Philadelphia said.

He was referring to the problems faced by the US Federal Reserve, which might want to cut interest rates to avoid a recession, but is worried about inflationary factors such as $100-a-barrel oil. [Snip]

Merrill Lynch said that the figures showing the jobless rate hitting 5% in December were the final piece in that puzzle.

"According to our analysis, this isn't even a forecast any more but is a present day reality," the report said.
[Highlighting mine - Editor WTF-o]

There are disagreements, of course. The consensus view is that, while a recession is possible, we aren't there yet. Merrill has a response to that also:

Merrill said that the current consensus view on Wall Street that there is a good chance of avoiding a recession is "in denial".

The consensus opinion is that of financial market makers who earn a living by selling stocks and bonds. That selling activity will drop sharply when the customers for their services realize that the economy isn't going to bail out bad investment decisions, but the salesperson they are talking to will get the commission as soon as the deal is made. The salesperson doesn't want his customers thinking that the economy is going bad. Thus the consensus opinion is that "We aren't in a recession now, and if there is one later it will be short and mild."

The surprise is that Merrill Lynch dares speak of it.