Recession Began Dec 2007, States NBER

[jyl]

The official arbiter of recessions, the NBER, has declared this recession started in Dec 2007.

Admittedly there is something over-precise about that - why not November 2007? or January 2008? - but let's just go with December 2007 for now.

Most recessions are over by the time the NBER declares them. At 12 months and counting, this is already the longest postwar recession since 1973-1975 and 1981-1982, which were about 16 months each. (Although, some say the entire 1973-1977 period was basically one long recession with a short false dawn in the middle.)

So, suppose this recession lasts 24 months, from Dec 2007 all the way through Dec 2009.

Well, the stock market typically troughs out 6 to 9 months, more or less, before a recession ends. So, if history is a guide, the market might bottom out in 3 to 6 months. Or earlier, if the recession is shorter than 24 months. (Or later, if this is going to be a 1930s experience.)

Hey, just thought I'd bring some relative and conditional cheer to the party.

[the]

Is cheer needed?

Last I remember, most here denied that a recession is/was occuring, or was even likely to occur. Has some sense/reality finally been knocked into people?

[legion]

As far as I know, we haven't had a single quarter of negative GDP growth reported, let alone two.

Did the definition of a recession change?

[the]

Originally Posted by legion

As far as I know, we haven't had a single quarter of negative GDP growth reported,

Thank you for demonstrating my point!

[competentone]

Originally Posted by jyl

Most recessions are over by the time the NBER declares them....

Well, the stock market typically troughs out 6 to 9 months, more or less, before a recession ends. So, if history is a guide, the market might bottom out in 3 to 6 months....

The problem is, what's going on is not really about a "recession."

We are experiencing the first stages of a fiat currency collapse.

Money is such a vitally important tool in the economy, that its collapse (actually its "destruction" due to government policy) creates massive disruptions in the economy.

You can't compare past recessions with what is happening now. We are in uncharted territory; the best comparisons would be to look at hyperinflations that have occurred in other countries.

[Porsche-O-Phile]

I hear a fat lady warming up someplace.

Good thing I have lots of ammo.

[legion]

Originally Posted by the

Thank you for demonstrating my point!

That you don't know the definition of a recession?

[the]

No, try again.

[pwd72s]

Hey, I told Cindy to make our portfolio 60-40...so she did. Bonds-Equities. Now it's around 75-25... Not the way I wanted to have a conservative portfolio, but I wasn't planning on buying any 6 figure P-cars anyway.

[the]

Here's a clue:

http://biz.yahoo.com/ap/081030/economy.html

[jyl]

The NBER definition of a recession is not "two consecutive quarters of negative GDP". See NBER website to learn more. http://www.nber.org/cycles.html

This has been pointed out in prior threads, but for some reason people don't get it. See for example this thread Why Economists Are Betting A Recession Won't Happen

Further, you are overlooking that 3Q08 GDP declined -0.3%.

Originally Posted by legion

As far as I know, we haven't had a single quarter of negative GDP growth reported, let alone two.

Did the definition of a recession change?

[turbo6bar]

Originally Posted by jyl

Further, you are overlooking that 3Q08 GDP declined -0.3%.

Wasn't it recently revised to down to -0.5%. Think I heard it on NPR, so it could have some negative bias.

[legion]

So we are supposed to believe some organization that doesn't use the correct definition of a recession?

[the]

Even putting aside what is the "correct definition" of a recession, you see my point now, no?

[the]

Here's another series of clues, in case you still can't.

Originally Posted by the

Last I remember, most here denied that a recession is/was occuring, or was even likely to occur.

Originally Posted by legion

As far as I know, we haven't had a single quarter of negative GDP growth reported,

Originally Posted by the

Thank you for demonstrating my point!

Originally Posted by jyl

Further, you are overlooking that 3Q08 GDP declined -0.3%.

[jyl]

Originally Posted by competentone

The problem is, what's going on is not really about a "recession."

We are experiencing the first stages of a fiat currency collapse.

Money is such a vitally important tool in the economy, that its collapse (actually its "destruction" due to government policy) creates massive disruptions in the economy.

You can't compare past recessions with what is happening now. We are in uncharted territory; the best comparisons would be to look at hyperinflations that have occurred in other countries.

In Mar 2008 when BSC went under, 1 USD was 0.64 EUR, 0.50 GBP, 1.00 CHF. Today 1 USD is 0.78 EUR, 0.65 GBP, 1.20 CHF.

As the financial crisis worsened, the USD gained against the major European currencies. At the same time, the USD fell against the JPY and CNY. The picture, to me, is that investors think the USD is one of the better houses in a bad neighborhood, that neighborhood being the major world currencies. Not the very best house, but neither the JPY nor CNY function as reserve currencies.

Hyperinflation has not emerged. I understand your arguments that it will emerge, and we have discussed at length whether the US is or is not similar to Weimar Germany, etc etc.

But so far, most investors would apparently rather hold USD than their own national currencies. And, judging by yields, most investors would rather hold US T-bills and T-bonds than other government debt.

Interestingly, gold also peaked in March/April 2008 and has fallen -20% since.

[competentone]

Originally Posted by jyl

But so far, most investors would apparently rather hold USD than their own national currencies. And, judging by yields, most investors would rather hold US T-bills and T-bonds than other government debt.

But how much of that move to dollars is based upon people reacting to the dollar's history as a safe-haven during financial turmoil, rather than any in depth understanding by foreigners about the nature of this financial collapse?

[Porsche-O-Phile]

I heard a report yesterday that Dubya said "he's sorry" about the current recession, so I guess I should feel better. Everything's going to be okay now.

What an absolute jackass we have for a president. I'm certainly no fan of Obama, but January 20 can't come quickly enough. I can't possibly imagine how he could screw things up any worse than Bush has.

[jyl]

Originally Posted by competentone

But how much of that move to dollars is based upon people reacting to the dollar's history as a safe-haven during financial turmoil, rather than any in depth understanding by foreigners about the nature of this financial collapse?

Presumably much of it is that. Still, there are only two real reserve currencies in the world, and the Europeans have not impressed anyone with their lack of coordination, spotty recognition of their problem, and slow/late/small actions.