“We are certainly in a deflationary state,” said David Rosenberg, chief economist and strategist with Gluskin Sheff and Associates in Toronto. “Of that, there’s no doubt.”
“I think people still have no clue as to just how weak the economy is,” Mr. Rosenberg said. Remove the “impressive medication” administered by governments, and most economies are at a virtual standstill. The U.S. economy faces a decade of stagnation, he said.
[..]”deflation will last until we see the next secular trend of expanding household balance sheets, and that is some time away” Mr. Rosenberg said.
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Meredith Whitney:
Anyone counting on a meaningful economic recovery will be greatly disappointed. How do I know? I follow credit, and credit is contracting. Access to credit is being denied at an accelerating pace. Large, well-capitalized companies have no problem finding credit. Small businesses, on the other hand, have never had a harder time getting a loan.
Small business loans are hard to find, and credit-card lines (a critical funding source to small businesses) have been cut by 25% since last year.
[..] more than 32% of U.S. homes are worth less than their mortgages.
Small businesses primarily fund themselves through credit cards and loans from local lenders. In the past two years, credit-card lines have been cut by over $1.25 trillion. During the same time, 10% of all credit-card accounts have been cancelled.
