All Bets Are Off If ‘Jobless Recovery’ Becomes True ‘Double Dip’, Catalano Says

Posted: July 14, 2010 in Uncategorized

Posted Jul 13, 2010 07:45am EDT by Keegan Bales

By the end of the third quarter it will be clear whether the economy is forging a real recovery or slipping into another recession, says Vinny Catalano, founder and president of Blue Market Research. This is a much more important than some academic debate over whether the economy suffers a “double dip” or not.

When he sat down with Aaron Monday, Catalano said he believes the economy is in recovery mode now, albeit of the “jobless” variety. He notes that corporate profits are strong, there is significant growth in the world’s emerging economies and while developed nations are recovering slowly, they are moving in the right direction.

But a true “double-dip” recession in the U.S. could trigger widespread instability both at home and abroad.

“Given the political climate that we are in right now, that could be very toxic over the next year or two,” Catalano says. “I could see protests in the streets, things of that sort…you can see things get unhinged and there is a snowball effect

Fall of U.S. Economy Would Cause Domino Effect

If U.S. GPD slips back into negative territory, unemployment would rise to the 11% to 12% range, Catalano predicts.

Because of globalization, Catalano further predicts turbulence in the American economy will ripple throughout the world.

“Global economic impact could be really quite profound if the world’s number one economy decelerates into recession,” Catalano says. “Maybe it drags another part of the world, a big part like Europe into that equation…the whole chain reaction that takes place.”

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