Quote:
Originally Posted by Nydahl
Its funny.I am sorry to say but you are really naive people. Read some FEDs reports - your economy is about to hit the floor and consequences will come pretty soon.
US are in recession already as Robert Zoellick said yesterday for Reuters
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Tony's question was whether thing ARE "really bad"; not whether they might or will become so. I think the answer is no as far as whether they *are* really bad already. Whether it might becomer "really bad" is a completely different question. Currently some things are bad, some not, some just fine. fuel and food inflation is pretty bad and hurting low end consumers.
You point out that the economy is "about to floor" according to FED reports. The FED forecasts a slowdown and not a recession. Their latest report releases last month forecasts growth of between 1.3 and 2% this year. I'm not saying I believe the FED. I've been more bearish than them for quite a while. But the official FED forecast last printed is for a slowdown not a recession.
Even if there is a recession a recession to me is not "really bad" in and of itself. I've been through 2001, 1990, 1980. 1980/82 was "really bad". 1991 and 2001 weren't in my opinion "really bad".
So are we "already in a recession"? According to the typical definition you have to have 2 consecutive quarters of GDP shrinkage. 4th quarter, 2007 was positive. If real 1st quarter GDP growth is negative then we are still not in a recession. We are not in one until both 1st and 2nd quarter real GDP growth was negative.
So then the next question is whether we are in the first quarter of a two quarter long or more period of contracting real GDP. We very well might be. It's going to be awfully close.
What is "really bad"? I'd say 8% reported unemployment is pretty bad and that 10% is really bad. i'd say reported real GDP contraction of over 5% is "really bad". I don't think shrinkage of 2 or 3% is all that terrible. That would make 1974 bad, 1980/82 really bad, 1991 not all so bad and same with 2001.