Once again the talking heads are at it. The folks on CNBC are saying they wonder if all of this bail out stuff has been done fast enough to avert a recession. Ah, too late there boys. James Hamilton (http://www.econbrowser.com/) is on record as saying he thinks the recession started last December. That would put us at 11 months right now if you think he is right (I am a gambler and I know where my $$$ is). The average post-WWII recession has lasted 11 months. The recession of 1981-82 lasted 16 months and was the worst downturn since the Great Depression. The recessions of July 1990 - March 19991 and March 2001 - November 2001 were both short but had the longest most drawn-out recoveries in the 20th century history of the business cycle. Now we are looking at a recession in the midst of truck loads of financial goop with credit markets doing their impersonation of a cigar store indian together with the prospect of a long stretched-out recovery.
Please don't get excited here folks looking for a quick exit from this fever swamp nor a return of the elevator to the top floor again quickly. History says you would be wrong.
Please don't get excited here folks looking for a quick exit from this fever swamp nor a return of the elevator to the top floor again quickly. History says you would be wrong.
3 comments:
How are we in a recession if our economy is still posting positive GDP growth numbers? We grew in Q1 and Q2 this year so the recession could not have started last December - right?
Two negative quarters of real gdp growth is a guide and not a hard and fast rule, contrary to public opinion. You can't look at the labor market figures and not believe we are in a downturn.
Read this: http://www.econbrowser.com/archives/2008/10/the_downturn_wo.html#more
Dr. Parker,
If this recession started in Dec. 2007, when would be your prediction to a turnaround or climb toward positive growth(GDP)?
Do you think we could experience a mild depression with our current situation?
The bank runs earlier this year, the foreclosure crisis, investment companies merging or filing bankruptcy, unemployment possibly reaching 8-10%, etc. have created havoc in our economy. It's global now. Markets overseas are reaching new record lows as well.
It's a crazy time. I feel no one really has a plan. Maybe your blog can help put a gameplan together.
Keep up the good work. This was a great idea.
Regards,
taxguy77
Post a Comment