According to recent estimates by Goldman Sachs, the US economy is already at stall speed, with GDP growth for Q4 expected to be an anemic 1%. Any further cuts to growth beyond this due to the fiscal cliff in 2013 would cause a recession.
But we also know two things based on the recently released ISM manufacturing numbers upon which Goldman's downgraded growth expectations for Q4 are based. First, as I outlined in a post for silver and gold members, the fiscal cliff has already negatively impacted new orders. The reason the ISM manufacturing survey was negative had much to do with poor numbers for new orders and employment, both of which were affected by caution associated with the fiscal cliff. Output was higher in November than October. Second, as Goldman pointed out, all of the inventor...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.