November 25, 2004 05:32 AM
Is Another Recession Brewing?
Excerpt: We're not seeing — albeit last month's strong jobs numbers — enough jobs being created to maintain equilibrium. You need close to 200,000 jobs just to maintain equilibrium. So unless we start seeing 350,000 jobs added back to back to back, there's going to be a problem.
IF KARL ROVE SEEMED like an obscure, shadowy figure operating behind the scenes during the first term of George W. Bush, that's clearly no longer the case. Everyone now knows the story of the slick political operator who turned a young, well-connected baseball executive into a two-term president.
Last week, an old acquaintance of the Texas political handler sent Rove an open letter titled "The Next Bush Recession." In the letter, John Mauldin, president of Millennium Wave Investments, an Arlington, Texas-based investment adviser, warns that a variety of indicators are signaling a dramatic recession two years down the road. And with the Fed almost out of bullets and no big federal tax cuts coming down the line, there will be no way to stop it, he says.
Mauldin, an avowed Texas Republican, tells Rove that if Bush wants to get his agenda through Congress, he'd better act quickly. Because once the economy goes into a tailspin, the mood for major policy changes in Congress will evaporate faster than John's Kerry's dreams of presidential glory last Wednesday morning.
SmartMoney.com recently spoke with Mauldin to find out why he thinks the economy is going to fall into recession — and what investors should do to prepare for it.
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