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Tuesday, September 21, 2010

Oh, okay... It's a "new" recession, not the old one.

Say what?

Am I on Candid Camera?

The U.S. recession ended in June 2009, according to reports filed by the National Bureau of Economic Research. Oh, that's good.  It makes me feel much better and more confident in the American economy which, to me, still seems to be stuck in very low gear.

If you want to ponder socio-psychopathic economics, please read this news flash:
WASHINGTON (Reuters) – The recession ended in June 2009, making it the longest downturn since the Great Depression of the 1930s, the National Bureau of Economic Research said on Monday.
The NBER, considered the arbiter of U.S. recessions, said it chose that month based on examination of data including gross domestic product, employment and personal income.
The group's business cycle dating committee, composed of academic economists, is notorious for taking its time in declaring the start and end of recessions.
The committee said it waited to make its decision this time because it wanted to review revised data on national income, released August 27, to get a clearer reading on the path of economic output in 2009.
In April, the NBER declined to call the end of the recession, and some of its members said at the time they were concerned the economy could dip back into negative territory. In Monday's announcement, the NBER said any fresh downturn would mark a new recession, not a continuation of the one that began in December 2007.
Here is the WSJ take on the item... Click here:  WSJ

Now, the same day the research was published, stocks rallied to a four-month high, finishing +145 for the day (Sept. 20, 2010), despite the fact that any downturn would just be labeled a 'new recession' which could easily be deeper and darker than the 'old' recession.

While that was happening, CNN Money posted this story on a group of 18 economy gurus and their predictions:

But even if the nation avoids another recession, economists are in broad agreement that the current economic pain -- high unemployment, weak growth, little improvement in home values -- isn't going away anytime soon.
The survey of 31 economists, compiled this month, shows that the chance of another downturn in the next year is around 25%, according to a median consensus. That's up significantly from about a 15% risk six months ago.
Nearly two thirds of those surveyed agree the chance of a double-dip recession has risen since the start of the year. Only three believe there is less risk than there was in the spring. Nine of the economists surveyed left their forecasts unchanged.
"We have been talking about ongoing fundamental weakness and the possibility of a double-dip for at least nine months," said Bill Watkins, executive director of the Center for Economic Research and Forecasting, who puts the risk at 25%, as he did six months ago.

Got it?

Now, if you are more confused or more uncertain about the economy, housing market and/or stock market because of all of these mixed messages, raise your hand and say:  "Go figure."

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