Bank of Tokyo’s Rupkey: US Recession Fears Overblown

Friday, 13 Jul 2012 09:39 AM

By Dan Weil

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Some economists have begun to speculate about the possibility of a U.S. recession in light of recent weak economic statistics, such as the June jobs report.

But Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi, says that worry has gone too far.

The economy has shown a “crazy seasonal tend” over the past three years, where it slumps around mid-year and then recovers at year-end, he tells Yahoo.

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“So hang around for a bit. . . . Every single year jobs have picked up in December and the first quarter of the next year. Why not wait for happy times to come?”

But what about Rupkey’s pessimistic brethren? “There are people always pointing to the sky falling,” he says. “That’s how you get the most air play — by saying prepare for the end of the world.”

Many economists began issuing recession calls amid deteriorating data and a slumping stock market last September, only to be proven wrong, Rupkey points out. “We’re thinking too negatively here.”

To be sure, the negative thinking can become a self-fulfilling prophecy, he acknowledges. “It is possible to talk ourselves into recession.”

Investment legend Warren Buffett sees the economy as essentially stagnant.

"In the last two months, . . . the general economy of the United States has been more or less flat. Growth has tempered down, but in residential housing, we are seeing a pick-up,” he tells CNBC.

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