Hard Times Get Tougher?

I am an Alternative Dispute Resolution (ADR) Professional in New Mexico, and I wrote earlier in the year on another blog about "the new normal" of low, slow growth.  Recently, the Chief Economist for the Bank of New York Mellon, Richard B. Hoey, suggested that the situation could now be quite worse.  



Mr. Hoey writes that "sustained global expansion at a moderate pace" is only "somewhat more likely than "full-scale recession."  Specifically, he opines that "[t]he risk of full-scale recession has been rising daily and we would now put the probability of a full-scale [and double dip] recession at about 20%."  


He identifies a number of changes, nationally and globally, that have recently occurred to account for this gloomy fortune:

• the U.S. debt ceiling bill only postpones the next debt ceiling battle until 2013;
• stalling of the U.S. economy in the first half of 2011, as evidenced by the recent revisions to the real GDP;
• shock to and loss of confidence in the U.S. and abroad from the disorderly debt ceiling battle;
• Standard & Poor's downgrading of the U.S. bond rating;
• the Federal Reserve's "toolkit" for handling monetary crises "is somewhat depleted," and it has announced the reserve rate is likely to remain "exceptionally low ... at least through mid-2013";
• financial troubles in Greece, Spain, Portugal and Italy and lack of unity of European policy makers regarding how to handle the stresses;
• decline of oil prices;
• widespread rise in fear of a full-scale recession, in U.S. and around the globe.

Although double-dip recessions are historically quite rare, Mr. Hoey notes that "the most recent recession was a balance sheet recession, which tends to be followed by vulnerable recoveries."  

This does not bode well in my experience as a foreclosure and family law mediator--foreclosures will likely continue apace if they don't increase, and families will continue to suffer stresses associated with low growth or recession. If you or your household are going through foreclosure of a family disputes in these tough times, and you are in need of sensitive and sensible mediation services, please contact Pilar Vaile, PC. at (505) 247-0802 or info@pilarvailepc.com.

Pilar Vaile

Pilar Vaile, PC.

Albuquerque, NM

Notes:

Compilation Source:  Richard B. Hoey, "Economic Update," Band of New York Mellon (Aug. 11, 2011).