Talk about your party pooper! Like a disgruntled waiter spitting in the champagne back in the pantry, The NY Times editorial this morning, Hold the Champagne, approaches parody status in its attempt to find the cloud on the silver lining of the economy's good performance.
The Times began by comically scolding investors for "almost certainly overreact[ing], pushing up stocks and bonds as if all was right with the economy" in reaction to the news that inflation had been lower than expected. And if anyone should know about stocks going down, it's the folks at the NY Times who have watched the Times' own share price droop steadily downward over the last year.
The Times then kvetches that Wall Street "doesn’t seem to be considering . . . the possibility of problems for which the Fed has no good answers." Come on, guys, look on the dark side!
The Times rubs its hands at the prospect of a big housing downturn, citing the union-funded Economic Policy Institute to the effect "that housing-related jobs accounted for 15 percent of the nation’s job growth in 2005. Consumer spending could also be affected, via higher unemployment, less home-equity borrowing and a general reversal in the wealth effect — that free-spending feeling people get when their assets are appreciating."
The Times continues its litany of woe by suggesting that "the slowdown is likely to weaken the dollar," and suggests "the result could be a slowdown that is more severe than currently anticipated and that could be impervious to interest rate calibrations."
The Gray Lady gives herself some cover by assuring us that this is all "a scenario, not a prediction," but goes on to remind us that "the important point is that today’s economy has problems that go beyond price inflation."
Concludes the Times: "now is a time for watchful waiting, not uncorking the Champagne." "Waiting" - for a recession that you can imagine the Times would love to see unfold just in time for the 2008 presidential election.
An aside: note the Times' delicatesse in capitalizing 'Champagne'. Nice little Francophile style point. Wouldn't want to offend our French friends by suggesting champagne is just a generic term for bubbly.