Fed's 'Soft Landing' Not Inspiring Confidence

While the Federal Reserve continues to predict a "soft landing" for the economic "slow down," others are not buying it.

Investor's are expecting a slump, with both the housing and manufacturing figures down. Manufacturing layoff's, housing declines, and declining durable goods sales are all causing caution and warnings.

The decline of the dollar against the euro, has some concerned about global economic impacts. However the OECD predicts that there will be a shift in activity. Namely that the euro's strength will balance out the dollar's fall. That would seem to be an optimistic prediction as European consumption doesn't match up to the US. One would think that the dollar would truly need to drop dramatically against the euro for such a global balancing effect to be felt.

Then there are the rumors that the Republicans are going to take a parting shot as the leave Washington. Namely, that the slight of hand that has hidden the actual state of the economy will be withdrawn, and the slump will become an avalanche. Purportedly this would land the Democrats with the "blame" for a bad economy; however, Bush is still in office, and the questions about the national debt, and the deficit, are clearly in Bush's (and the Republican Congress') hands.

If the economic "hard landing" plays out, it will be difficult to shift the blame to Democrats, but stranger lies have been made believable by the amazing White House spin machine.