A recession is more likely than a soft landing, says Charles Schwab's Liz Ann Sonders

Market Worry Spurs Safe Haven Buying

The S&P 500 Index continued its downward trending Monday,closing down 29.82,or 1.56%.This was based on the decline of light sweet crude below the 30.00 mark,down 2.42% to 29.77 a barrel.Brent crude fell even harder,down 6.62%,but didn't crack the 30.00 threshold,closing at 30.05.Safe havens gold and silver both appreciated,with gold closing at 1108.8 an ounce,up 1.1%;and silver closing at 14.255 an ounce,up 1.444%.*
There is a lot of concern in the markets over the devaluation in China and the collapse of oil,said Bob Baur of Principal Global Investors.We think a huge devaluation is not ahead.I think China is more interested in a stable currency rather than devaluation.We're finally seeing some stability in the commodity markets.We do think 30.00 is low for oil prices.*
Overall,we're not seeing the kind of consumer spending we were expecting.Lending is going up,but consumers are still reducing their spending.China has slowed dramatically,so there's a real concern about growth slowing.There's an awful lot of worry about a global recession.We think growth is being rebalanced.We are in a place where growth is not going to be what it was.The engine is there-it's just not going to be what we're used to.*
We've recapitalised the banks.Private and household debt has come down.Private debt has come down since 2005.*
Australia is doing remarkably well.The job growth there is good.The US economy has been resilient.Consumer spending is robust.It's awfully hard to see a recession occurring there,Mr.Baur noted.*
In the short-term,we could see some short-term rebound;but long-term,we are still bearish over the next 12 months,cautioned Jason Low,equity strategist at DBS Private Bank.*
Market Vectors Gold Miners ETF (GDX),Silver Wheaton Corp (SLW)

Conference Board:Where The Arrow Points

The Conference Board says that economic indicators point to continued weak growth through fall and winter.The Board's Index of Leading Economic Indicators increased 0.3 in August following a 0.6 increase in July and a 0.3 increase in June.
According to CB economist Ataman Ozyildrim,the August increase was driven by components measuring financial and monetary conditions which offset substantially weaker components measuring expectations.The growth trend in the LEI has moderated and positive and negative contributors to the index have been roughly balanced.The indicators point to rising risks and volatility,and increasing concerns about the health of the expansion.
Ken Goldstein,another CB economist,said there is growing risk that sustained weak confidence could put downward pressure on demand and business activity,causing the economy to potentially dip into recession.While the chance of that happening remains below 50/50,the odds have certainly increased in recent months.
The Conference Board is a global,non-profit,independent business membership and research organization working in the public interest.It strives to provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society.

More Struggle Ahead,Economists Say

The National Association for Business Economics has released the results of a survey of economists.According to the participants,the U.S. may avoid a recession,but growth will be anemic for the rest of 2008.Jobs and capital spending will be stable,as industry demand is rising across the board.The economy will be struggling for a few more quarters.Selling prices rose at the highest rate since Q1 of 2007.Higher materials costs were reported by 75% of the participants,which is a record.Increased capital spending was expected by 40% of the economists,which is down only 2% from Q1 2008.Overall,the NABE survey charts a difficult but passable road in the medium term.This week,Gross Domestic Product and employment reports could move the markets.