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Recession Rant

May 27th, 2008 at 08:59 pm

Ok. I am getting really fed up with this. Everywhere I turn people are saying we are in a recession. So where do we start? How about the definition of recession?

ďIn macroeconomics, a recession is generally associated with a decline in a country's real gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year.Ē (Source: http://en.wikipedia.org/wiki/Recession).

Of course, the NBER can overwrite this and say that we are in a recession, but I didnít see that in their news release. (Source: http://www.nber.org/releases/). Now true, I only go to this site every few weeks and may have missed it but I donít see anything there.

So, letís stick at our working definition of 2 quarters of negative growth. So we should go to the BEA site, right?

ďReal gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 0.6 percent in the first quarter of 2008, according to advance estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP also increased 0.6 percent.Ē Huh, seems like the economy has been expanding for the last few quarters, slowly but not negatively. (Source: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm)

Oh yea, this was released April 30, 2008 so itís pretty current.

Well it FEELS like a recession. Well, my desk at work feels like Iím in a cockpit of a jet fighter. Guess what. Iím not. And we arenít in a recession.

So enjoy life because we have 4 months before we could possible be in a recession. Thatís right, we need 6 months of negative GDP before we can declare a recession.

9 Responses to “Recession Rant”

  1. nance Says:

    I totally agree. It seems that the media loves to report doom and gloom, and is quick to label accordingly.

  2. Broken Arrow Says:

    Oh, I don't know. I kind of like the media doing this. It can only help drive overall stock prices down a bit longer so I can get more chances at buying them up. Big Grin

    But yeah, if we go by the official definition, then we are not in an officially-declared recession yet. Personally, I don't care what people want to call this anymore. I think it's more important to focus on what opportunities we can find in any kind of market.

    But that's just me anyway....

  3. baselle Says:

    If you planned ahead, who cares? They had this same discussion in 1991, in 1987, in 1983 ... blah, blah, blah. Don't know if we are in a recession, but we are in something different. I got on the bus this morning - usually its quiet and I can get a window seat - not today. Half full and I had to use my bus guile to get a window seat. Big Grin

  4. ceejay74 Says:

    Hee hee, you sound just like Dave Ramsey on his TV show. :-) I think people are feeling a financial pinch that seems to coincide with the recession the media has proclaimed. But the reason for people's financial distress is more that they're reaching the ends of what they can borrow on their homes or credit cards and are having to consider living within (or slightly closer to) their means!

    I am SOOO glad I got off that freaky carnival ride last year, before the news got really doom-and-gloom. Otherwise I probably would be blaming a phantom recession for my debt instead of my own poor planning, and the longer it took me to admit responsibility, the harder I would have fought getting on the budget straight and narrow.

  5. koppur Says:

    technically need 6 months? OK, so we are atthe beginning of the fall to a recession... Smile

  6. merch Says:

    Koppur, technically we need 2 quarters of negative GDP. Currently the economy has been expanding every quarter. So, yes; we need 2 quaters.

    And my favorite recessions are the ones that the economy is expanding quarter after quarter. I wish all recessions were like that.

    What I should have asked is at: what positve growth rate does the economy shrink?

    And Q2 might be the first negative GDP number, but I don't think it will be that bad, especially when the stimulus checks start working their way through.

    I think next I will tackle inflation next.

    Ceejay, that made me laugh.

  7. sagegirl Says:

    I am not so much for "dictionary definitions" of anything. People can't "feel" a dictionary definition. That being said, I agree that we are not in a recession yet. Not to say that people aren't hurting--gas prices, unemployment, rising costs of living versus non-rising wages. It makes people feel pinched. It is a time of uncertainty for a lot of people. Whether or not it was because they failed to plan, or they dug themselves into a hole, the fact is that things are dicey at best for a lot of people. We may not be in a recession (again, I agree we are not) but it is an overall weak economy.

  8. terri77 Says:

    I haven't heard the expression recession much at all. Slow down, slow growth, weak economy, that's what I'm hearing and it's true. But recession I can't recall hearing by anyone in the media or in politics.

  9. merch Says:

    just type recession 2008 in google and you will see articles from CNN, CBS, digg.com, boston globe, etc.....

    In fact. CNN has a site called recession watch .... I kind you not. With such articles like, New recession worry: Bank failures and Watch inflation now! (which is about 70's stagflation).

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