On January 29/08, "There's no recession INTC, CSCO, CSX" was posted on the Blog, with the big guys in TECH saying no recession in Tech, and the CEO of CSX being confident there was no recession in transportation or elsewhere in the economy (Michael Ward said that he did not expect a downturn, and the U.S. Federal Reserve's 75-basis-point interest rate cut should boost the economy). Do others share the same view?

Former General Electric CEO Welch Tells MSNBC 'No Recession'

No 'technical recession,' Welch says; Economic despair is 'unwarranted,' say experts. By Jeff Poor Business & Media Institute 1/4/2008 3:18:07 PM

Some think it is a foregone conclusion the economy is in or will be going into a recession within the first two quarters of 2008, but not everyone...

"No, I don't think we're going to hit recession, but it's going to feel like it," Welch said "Things are slowing down dramatically, as everyone knows. But I think we'll weather this thing and the global economy will keep us alive. So, we will not have a technical recession, but it will sure as hell feel like one."

The "technical definition" of a recession is a period of general economic decline; specifically, negative growth in gross domestic product (GDP) for two or more consecutive quarters.

For the last two quarters, GDP (as reported by the U.S. Commerce Department) has grown at a rate of 3.8 percent (second quarter of 2007) and 4.9 percent (third quarter) - not a sign of a recessionary trend. Fourth-quarter GDP numbers for 2007 won't be released until March.

Robert Stein and Brian Wesbury, economists for First Trust Advisors, L.P., wrote in their January 14 "Monday Morning Outlook" the dismal view of the economy is unwarranted if one examines the underlying fundamentals.

"We can't change the mood on Wall Street," Stein and Wesbury wrote. "What we can do is look at the fundamental drivers of the economy. And those drivers appear in good shape."

The "drivers" ...included the fact that Federal Reserve interest rates are not "tight," historically speaking - despite the pleas for cuts from some financial media pundits...tax rates remain low and the losses from the subprime mortgage woes are now realized...the dollar amounts from the subprime crisis "pale in comparison to an economy that will produce $14.5 trillion in GDP this year, has 300 million people, 100+ million homes, and more than $100 trillion in total assets."

Dow Chem CEO: I'm No Recession 'Chicken Little'

What is driving all the fearful recession chatter? Andrew Liveris, president, chairman and chief executive at Dow Chemical (DOW) sums it up in one word: "Overreaction."

...."Macro trend-wise, '08 is clearly going to be soifter than '07. And the U.S. economy is still sorting itself out," Liveris conceded. "But I wouldn't do the Chicken Little thing at all."

What is, on average, the single most dominating influence in our lives (whether we are aware of it or not)? Mass Media of course

CBS CEO Moonves To Citigroup:

No Local Ad Recession

Michael Learmonth | January 10, 2008 2:31 PM

... CBS CEO Leslie Moonves adds his voice to others in media saying they haven't seen any evidence of an economic downturn on local advertising. "As we look toward potential downturn in the economy--we haven't seen any evidence of it, including in our local businesses. We have seen nothing that would lead us to believe we are in any kind of trouble," he said.

News Corp. president Peter Chernin said basically the same thing yesterday.

Mass Media advertisers are a barometer of a broad segment of major businesses participating in the economy, and, as well, a barometer of consumer participation that may be expected in the economy. ARE consumers a major driver of the economy? Well, yeah!

On a lighter note, they're not even expecting a recession in Alabama this year!

The University of Alabama's Center for Business and Economic Research gave a lukewarm forecast for Alabama's economy in 2008, with expectations for moderate growth - but no recession.

LONDON (Reuters) - ....last week's news of major company deals eased concerns that the credit crisis might be hurting corporate and economic activity.

Optimism has grown since Friday's news that China teamed up with U.S. aluminum producer Alcoa (NYSE:AA - News) to buy a $14 billion stake in Rio Tinto (LSE:RIO.L - News) and a move by Microsoft (NasdaqGS:MSFT - News) to bid $44.6 billion for Yahoo (NasdaqGS:YHOO - News).

..."The Microsoft news is improving market sentiment as it hasn't seen global M&As of this magnitude for a while. The bid amount is ridiculously huge and the premium is also large," ...

Fri Feb 1, 2008 8:57pm EST - By Philipp Gollner

SAN FRANCISCO (Reuters) - Microsoft Corp's $44.6 billion bid for Yahoo Inc would use up its cash hoard, but the controversial move at a 62 percent premium might pay off if the company makes its savings targets -- and then some.

The software leader's $31-per-share cash and stock offer "is very astute," Sanford C. Bernstein analyst Charles Di Bona wrote in a research note, as Yahoo's assets are worth $39 to $45 per share, much more than the offer price...

...The bid far exceeds the 35 percent to 40 percent premium typical in recent large deals.

Pundits have cited (in error) fears of a recession in the US economy as the cause of the Martin Luther King day plunge in world market. With the US consumer still driving the world economy, the fear would be understandable. The fear of such a recession isn't eveident in Japan, where Takeda Pharmaceutical Co., Japan's largest drugmaker, is spending almost a Billion Dollars to acquire a local unit of AMGEN.

Bloomberg

Takeda to Buy Amgen Japan Unit for Up to $902 Million

Feb. 4 (Bloomberg) -- Takeda Pharmaceutical Co., Japan's largest drugmaker, agreed to buy the local unit of Amgen Inc. for as much as $902 million, gaining about a dozen experimental medicines for diseases including cancer and arthritis.

Takeda President Yasuchika Hasegawa is betting acquisitions in biotechnology, including U.K.-based Paradigm Therapeutics Ltd. last March, will provide new avenues for growth...
`
`They are showing they are aggressive in terms of going for acquisitions and strengthening pipelines,'' said Bruno Ferrant, an equities analyst at Japaninvest KK...Today's announcement ``can be seen very positively,'' he said.

In summary, the major TECH players don't see a recession coming and don't see any effects of an impending recession in their business results.

Consumers and businesses that supply them are not feeling the effects of any recession based on the evidence of very healthy advertising revenues flowing into the coffers of mass media suppliers, such as CBS and NewsCorp.

Transport is major infrastucture, supplying consumer and industrial needs. The CEO of CSX, a railroad, sees no recession, and the transports in general are booming.

Dow Chemical, which can be seen as both a major consumer supply company, and a major supplier of products used by other industries in production (industrial infrastructure) thinks talk of recession is overreaction.

The market is reacting positively to bad news, a sign of being at or near a market bottom. The positive market reaction to Motorola trying to sell off it's cell phone division is an example of this.

Corporate leaders are doing major merger and acquisition deals after taking a break caused by fears of Sub-Prime and its potential effects. The biggest recent M&A bid, Microsoft chasing Yahoo, involves a 62% premium on share price at the time of the offer. Microsoft expects profits to continue to be healthy.

CEO's are not hoarding cash for emergencies, as is typical on entering a recession. They are expending large amounts of excess cash on major share buy-backs, especially in Tech, but also in other sectors of the market. Buy-backs have been going on since prior to Bear Stearns' announouncment of their (sub-prime) Hedge Fund collapse and continues to date. The latest quarterly reports from Tech are showing considerable progress has already been made in these repurchases.

Insider buying, is at record levels, which is a huge indicator that Corporate leaders, at least, think their share prices will increase. Share prices, of course, don't normally increase during a recession.

And finally, what sectors have not been reporting good results this quarter? Financials and Housing, sectors which the market has been rewarding in the last 2 weeks.

Markets and stocks do not go up on bad news heading into a recession. (see MOT) Bank of America's latest quarterly report announced a 5.3 Billion dollar write down on Sub Prime and saw profit plunge 95% from last, year. BAC then punished existing shareholders by diluting existing share values. They issued new share offering subscribed to the tune of 12 Billion Dollars. Result? Stock has been going up ever since, rising about 30% over the last 2 weeks.

Bottom line is that Objective indicators show we are NOT heading into a recession.