Industry NewsMarkets & Economy

Big chickens, Chicken Little come home to roost

Commentary: Is there such a thing as a 'Modest Depression'?

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News of a sharply weaker economy combined with policy vacuum to produce the lowest mortgage rates ever recorded, briefly 4.25 percent for the highest-quality loans (at rollout in 1944, the first GI loans were pegged at 4 percent, but with a couple of discount points). The 10-year T-note crossed under 2.7 percent, well into the range of the panicked winter, 2008-2009. All data were poor, notably new unemployment claims rising back toward 500,000 weekly, but the killer lay in trade statistics. Our June deficit vs. the world shot up by $10 billion to $54 billion. Gross domestic product is based in part on sales, but the "P" in GDP depends on whether Americans bought stuff produced here or overseas. Since we bought a great deal more from overseas than assumed in the original second-quarter GDP estimate of 2.7 percent growth, April-July GDP will soon be revised to only 1.0-1.5 percent. Guesses for the third quarter, with lousy momentum going in: zero to 1 percent. I...