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The Bank for International Settlements says that we could be in for a deeper downturn than most people are expecting. They point to the credit crisis and rising inflation as the reason for their gloomy view.
"In the aftermath of a long credit-driven boom, it would not be surprising to see turmoil in financial markets, slowing real growth and temporarily rising inflation," the BIS said in its annual report.
"While difficult to predict, their interaction does appear to point to a deeper and more protracted global downturn than the consensus view seems to expect."
The Basel-based bank added that the current "consensus view is still that the global economy will slow only modestly further in 2008" and that growth continued to be strong in the euro zone, Japan, and major emerging market economies.
Often called the central bank of central banks, the BIS said during its last fiscal year central banks worldwide reacted to the financial and monetary policy situation differently, and that given their countries' different economic situations, a "one size fits all" monetary policy can't necessarily be predicted or suggested.
The bank said that with inflation rising, a global bias toward higher interest rates was probably appropriate. Higher interest rates can cool inflation, but run the risk of lower growth.
An article in Bloomberg suggests that today's stock market situation is more like 1974 than it is like 1994. Everything seems to point toward a significant downturn.
"Between inflation and the liquidity crisis, this is one of the toughest markets I've seen," said Dreman, who oversees about $15 billion in Jersey City, New Jersey. "But it's not a market you sell into. Any losses you take by being too early will be more than offset by buying cheaply."
Asian stocks were down again recently. Oil prices opened higher again today setting another new record.
The BBC reports that the Consumer Confidence Index is at a 16-year low. The index is currently at 57.2 - a fall from the 62.8 mark in April. The graph on the right from the Conference Board's release shows just how much the Index has fallen.
The Conference Board blamed the pessimism on the short-term outlook for the US economy as well as weakening business and job conditions.
The figures tell a similar story to the University of Michigan's Index, which hit a 28-year low in May.
"There is a fear the economy is in a recession or going into one and people may find their jobs in jeopardy," said David Coard from the Williams Capital Group in New York.
"When you talk to people on the street they seem to be really being squeezed at the pump and the supermarket while their income isn't keeping up."
Sadly, a turnaround in the short term is unlikely.
"Consumers' inflation expectations, fuelled by increasing prices at the pump, are now at an all-time high and are likely to rise further in the months ahead," said Lynn Franco, director of the Conference Board Consumer Research Center.
"As for the short-term outlook, the Expectations Index suggests little likelihood of a turnaround in the immediate months ahead."
Warren Buffett has also been gloomy on the economy lately saying that the recession will be "long and deep."