by Calculated Risk on 7/31/2006 07:01:00 PM

Nouriel Roubini writes: Dismal GDP Report: U.S. Is on Its Way to a Recession by Year End

... once the signals of this recession build up, the slowing demand, sales, profits, earnings will severely batter the stock market. Expect 10-15% losses on the major equity indexes between now and year end as the bearish reality of a recession sinks in delusional investors still hoping for a soft landing of the economy. There will be no soft landing; it will be as hard a landing as it gets. So, as Bette Davis said in All About Eve: Fasten your seat belts...it's gonna be a bumpy ride! A very bumpy one for the economy and for all risky assets. In 2006 cash is king and all risky assets (equities, EM bonds, currencies and equities, commodities, credit risks and premia) will be battered once the markets finally comes to the realization that a U.S. recession followed by a serious global slowdown is coming.

Brad Setser writes: Growth slowing, oil rising ... not good

[T]he global economy [is at risk] as well. Like Dr. Roubini, I am not convinced that Chinese growth is entirely independent of US growth.

And more on the US consumer:

Reuters reports: Whole Foods profit up but sales trail estimates

Whole Foods, based in Austin, Texas, has seen explosive growth in recent years as it added stores and profited from a desire among consumers for healthy food and lifestyles. But the latest quarterly report pointed to slower growth as shoppers wrestle with rising energy prices.

AP reports: Tyson Foods Shares Drop on 3rd-Qtr. Loss

Shares of Tyson Foods Inc. shed 3 percent on Monday, after the world's largest meat processor reported a fiscal third-quarter loss and predicted only modest improvement in the fourth quarter.

Tyson said a persistent glut of chicken, in particular, led to lower sales prices.
...
"The chicken glut continues. The export demand still is not there yet," Warren said. "It's definitely not a Tyson specific problem."

It appears consumers are moving away from the higher priced food stuff (natural and organic foods and chicken) to inferior goods. This is similar to the problem with casual dining that I mentioned last week.