A double dip recession is certainly feasible

Some economists look for the most positive signs, and others watch for one of the most negative signs. Recent data from the economy indicates a double dip recession, where the economy begins to improve after a fall, then plunges again before settling, is more likely than previously thought. Many think the fallout can be just as global as the last major plunge, as European analysts also as those on Wall Street acknowledge it might happen. Post resource – A double dip recession is possible by Personal Money Store.

Moody’s warns second slide possible

Moody’s, the credit rating agency, has put the chances of a second dip at 25 percent, up from their previous estimates of 20 percent, in a report by Moody’s Analytics. They have predicted real estate prices in a double dip recession will fall one more 20 percent, as outlined by the Wall Street Journal. The real estate market should stabilize in 2012, should that happen. The economy may also shrink a further 5 percent, as outlined by Moody’s.

Federal Reserve doesn’t see rainbows either

The Federal Reserve isn’t really calling for the bubbly to be broken out yet either. After a meeting Tuesday, the Federal Reserve stated that the economy overall had not grown as fast as hoped, and that recovery would take longer than envisioned, as outlined by CNN Money. The Fed did not address the possibility of a double dip recession, but did announce it would keep the federal funds rate at or near 0 percent and purchase further Treasury securities.

Doom and gloom across the globe

If a double dip recession happens, it could be global in scope. There could be effects of a double dip felt across the Atlantic as well. The trade deficit is widening, meaning American industries are exporting and selling fewer goods. That is less cash from foreign markets coming in. The trade deficits along with a troubled housing market do not make great bedfellows for economic recovery.

Find more data on this subject

Wall Street Journal

blogs.wsj.com/developments/2010/08/11/moodys-odds-of-a-double-dip-increasing-prices-could-fall-20/

CNN

money.cnn.com/2010/08/10/news/economy/fed_decision/index.htm