How long will this recession last?

[the]

It sure seems clear we are in the beginning stages of an economic meltdown.

How long do recessions typically last? It seems they are a somewhat normal part of the economic cycle, but is this time going to be worse/longer? It almost seems like a "perfect storm" this time, with bad news pretty much everywhere you look.

So, jyl and others, what's the analysis? How deep does this downturn go, and when does it reverse course, and what will be the impetus for that happening?

[turbo6bar]

Pre-emptive pic for upcoming post,"There is no recession. There is no economic weakness present. The economy has never been stronger."



I have no idea what is coming. I hope the 'perfect storm' scenario does not play out, because the event would be worse than a recession. I believe very few of us are prepared for that, including losers like me.

Pardon me for not elaborating. It's too hard to predict the monster which is the US economy.

Keep in mind that I am not an economist. I only play one on the OT.

[strupgolf]

In the last "recession", I dont believe we had anywhere near the problem we have now with the real estate fiasko. I'm looking at investing my 401 rollover into something, but I dont have a clue what it should be. I look at 2008 to be zero-growth at best.

[Chocaholic]

The smart money is in hand-wringing. Or at least you'd think so by reading this thread. Sheesh. The world isn't ending...it's just being put on sale. Bargains galore.

[tonypeoni]

Put your money in GOLD... This is gonna be a long one guys. Nothing like the one we had during H.W. Bush.

[techweenie]

Gold has so far tracked constant with the demise of the dollar. It's not an investment, but a hedge against value erosion.

[tonypeoni]

Originally Posted by techweenie

Gold has so far tracked constant with the demise of the dollar. It's not an investment, but a hedge against value erosion.

True but being a good American I just cant bring myself to invest in the Pound,Euro or CNY. Also from what Ive seen investing in foreign currency is almost like playing Russian roulette.

[dd74]

Originally Posted by Wayne at Pelican Parts

Commercial real estate is in for a HUGE correction. More so than residential, the commerical real estate market is driven by return on investments, and the cap rate, or rate of rentals versus the cost to buy the property, has been dismally low lately (artifically propped up by low interest rates).
-Wayne

Very true. In the commercial portion of my neighborhood, there are at least three vacant lots that have been that way for over a year. The old structures haven't even been torn down - just abandoned.

TRE's former street has simply halted new building. Addresses near TRE have as well been vacant for months. I expect the same for TRE's past residence - which is supposed to evolve to a 27-story condominium project.

This is very bad and telling of things to come.

What to invest in? The staples: Food, health care, pharmaceuticals, oil, and brothels (for the rise in frustration).

[RoninLB]

The bond market is presently corrupted. Capital movement needs an efficent bond market. Weak capital movement means less job creation.. and on and on we go.

[hytem]

No recession yet, but the media keeps chanting the big R word, and the stock market keeps sliding. Everybody stops buying, then you have a recession. It's all in perception.

The definition of recession: two consecutive quarters of negative growth. But let's not let the facts get in the way of opinions.

The high price of oil and the weak housing market are the two major factors to be concerned about. The weak dollar and excessive oil consumption (SUVs, etc) will keep oil prices up. This raises prices of anything needing transportation (food, goods, etc.). That's inflationary.
The weak dollar is probably caused by deficit spending--paying for a war with paper money.

What to do? Lower interest rates, obviously. That is far less inflationary than the other factors, and helps housing and investment. And oh yeah, stop printing paper money to pay for Iraq. That means get out of Iraq. We can't afford it.

Tax cuts? Been there, done that. Look what happened.

[the]

Originally Posted by hytem

No recession yet, but the media keeps chanting the big R word, and the stock market keeps sliding. Everybody stops buying, then you have a recession. It's all in perception.

Is the fact that credit has dried up, unemployment is up, housing sales are in the tank, home equity is in the tank, people have less money to spend, and are spending less really only a perception?

[Porsche-O-Phile]

I think this one is going to be pretty bad. Not necessarily cataclysmic in the sense that it's deep, but more likely to be very prolonged. I think the underlying factors that are dragging the economy down are not likely to be solved with cyclical variation and will persist for quite a while until they're sufficiently purged out to allow for upward cyclical (and non-cyclical) movement.

Nobody likes a recession, but I honestly think it'll be a good thing in that it will kill off a lot of the "funny money", scams, "irrational exuberance", drunken-sailor spending habits and over-reliance on credit by people with low net worths. It's necessary. There's some serious fat-trimming needed in our economy right now.

In general, I think the people that will be most "hurt" by this recession will be the ones that either deserve it or brought it on themselves by not seeing it coming and planning/acting accordingly. There will be exceptions (and that's the sad part), but overall I see us emerging from it stronger, leaner, meaner and more capable than the bloated bunch of credit-card wielding buffoons we are today.

I predict 2008 being a fairly bad year, economy contracting about 5%, maybe an additional couple of percent in 2009, then flopping around for a year or two before seeing meaningful positive growth. We'll see.

[dd74]

We need Al Gore to invent something for us all to make money off of. Like he did with the Internet.

[techweenie]

Note to self: when oil industry people are elected to the white house, buy oil stocks.

[RoninLB]

Bush is looking for more oil production.

$70 seems to have been a doable price. If Bush gets them to pump enough to drop it to $80 that's worth + $100B to our economy. $100B does affect.

Giving $ to -mid level people is bs from a growth standpoint.

Perception of US tax policy in short and long run sucks. Tax policy affects capital growth.


I'm waiting it out till banks do their work outs and we see who'll be president and control congress.

I would think a fund like Templeton's Income Fund, FKINX, is a good locker for new $. It seems to be the best of all those so-called balanced funds.


different strokes

[WI wide body]

Originally Posted by hytem

No recession yet, but the media keeps chanting the big R word, and the stock market keeps sliding. Everybody stops buying, then you have a recession. It's all in perception.

The definition of recession: two consecutive quarters of negative growth. But let's not let the facts get in the way of opinions.

The high price of oil and the weak housing market are the two major factors to be concerned about. The weak dollar and excessive oil consumption (SUVs, etc) will keep oil prices up. This raises prices of anything needing transportation (food, goods, etc.). That's inflationary.
The weak dollar is probably caused by deficit spending--paying for a war with paper money.

What to do? Lower interest rates, obviously. That is far less inflationary than the other factors, and helps housing and investment. And oh yeah, stop printing paper money to pay for Iraq. That means get out of Iraq. We can't afford it.

Tax cuts? Been there, done that. Look what happened.

I agree with most of what you said, but I'm not sure about that interest rate thing. That always seems the quick and easy answer we get from most folks..."experts" and guys like us. But I've been thinking about it. (wife and kids say that often leads to a photo-op)

One of the main things propping up our government and possibly our economy right now is the USA bonds and debt that is bought by foreign nations. I think. So what happens if interest rates go down to where Greenspan had them a few years ago? It's hard for me to believe that those lil yellow guys overseas love us so much that they would be willing to accept 1 or 2 percent payback on their (which was formerly ours) money.

And if they say...nah, we pass this month...it could make a recession (however the double talkers define it) seem like a freakin picnic.

I could be wrong...but I doubt it.

[tonypeoni]

Originally Posted by Porsche-O-Phile

I think this one is going to be pretty bad. Not necessarily cataclysmic in the sense that it's deep, but more likely to be very prolonged. I think the underlying factors that are dragging the economy down are not likely to be solved with cyclical variation and will persist for quite a while until they're sufficiently purged out to allow for upward cyclical (and non-cyclical) movement.

Nobody likes a recession, but I honestly think it'll be a good thing in that it will kill off a lot of the "funny money", scams, "irrational exuberance", drunken-sailor spending habits and over-reliance on credit by people with low net worths. It's necessary. There's some serious fat-trimming needed in our economy right now.

In general, I think the people that will be most "hurt" by this recession will be the ones that either deserve it or brought it on themselves by not seeing it coming and planning/acting accordingly. There will be exceptions (and that's the sad part), but overall I see us emerging from it stronger, leaner, meaner and more capable than the bloated bunch of credit-card wielding buffoons we are today.

I predict 2008 being a fairly bad year, economy contracting about 5%, maybe an additional couple of percent in 2009, then flopping around for a year or two before seeing meaningful positive growth. We'll see.

LOL I hear this. Im not looking for a pity party here but at 29 this economy has in been in bad shape most of my adult life. Particularly here in the Midwest. If it takes another 5 to 7 years for it to straighten out wow. I imagine there's a lot on gen Xers that feel the same. Damn Baby Boomers

[Hugh R]

So you money guys out there, what do you tell your clients who are seeing daily 100 or 200 point drops in the market? I'm in what I thought were well diversified mutual funds, and they're all heading south.

[WI wide body]

Originally Posted by dd74

We need Al Gore to invent something for us all to make money off of. Like he did with the Internet.

You are probably correct...it is mostly Gore's fault...along with the ever evil left. Right?

It must be a warm fuzzy to live in a fictive vacuum where the same bad guys are responsible for all of our nation's ills.

[turbo6bar]

Originally Posted by dd74

We need Al Gore to invent something for us all to make money off of. Like he did with the Internet.

Forget the stupid lock-box. I propose a federal tax credit proportional to post count.