All year long there has been one big question looming over America: is the country in recession, and if not, can a full blown recession be avoided? Well, according to The National Bureau of Economic Research, the country most certainly is in the midst of a recession, and has been since December of last year.
There has been a lot of debate as early as the start of the year over whether or not the country had already fallen into a recession. While we had not seen the official definition of a recession confirmed, several respected analysts had claimed the recession was under way months ago.
The officual definition of a recession is when economic growth slows for consecutive quarters. Despite this not having occurred earlier this year, billionaire investor Warren Buffet came out publicly as early as March 3 of this year claiming that America had already dipped into recessionary times.
According to Buffet, the recession was obvious when he looked at the sharp drop in spending he was seeing in his retail companies, as well as the steady (and still going) decline in home values. As it turns out, Buffet was, once again, spot on with his speculation.
The National Bureau of Economic Research, which is responsible for tracking the beginning and end of economic downturns, stated today that the payroll employment measure indicates that we have seen a steady drop since December of last year. So far in 2008, employers have slashed 1.2 million jobs, and the bad news is expected to continue when we get employment data for November this Friday. Analysts are predicting that we are going to see another massive increase in the number of lost jobs, with an additional 325,000.
The market has gotten off to a tough start to the week today, as recession fears have now become a reality, and the questions that remain are just how bad and for how long this recession will linger over us.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
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Reader Comments (Page 1 of 1)
12-01-2008 @ 2:45PM
Ben said...
so they just realize that we are in a recession 12 months after it started?
Sounds like they are just saying it to give the impression that it's almost over.
I say the recession is over when banks admits that their foreclosed million dollar houses and 600k condos really only worth 400k and 200k.
12-01-2008 @ 3:39PM
BHarrison said...
The point that so many (sic. most) americans seem to miss is that these ultra-weathy people, FIs and corporations have made BILLIONS and BILLIONS of dollars in profits during the last eight years (and longer). While this economic meltdown is a temporary hic up in their business activity, it has been the AVERAGE American investor who is incurring the vast majority of the losses in their 401K plans, and their personal investments.
It is the stockholders who are absorbing the losses . . . and the majority of the stockholders ARE the average American citizens. These wealthy guys and the corporations use OPM - Other Peoples' Money to invest in stocks, bonds, etc.; and they take their profits out of commissions, fees, and a per centage of the profits.
The BailOut monies are merely to refresh the capital that the FIs and corporations need to "run their financial games. The American people got duped into investing in homes or relestate that they could not afford (andthey are personally responsible for doing that), and they got duped into investing in, in essence, pyramid and Ponzi schemes to finance the profits of the CEOs, the FIs, and the corporations.
Wealthy people don't normally use their own money in too risky of ventures, and they have the "inside info" as to when to bail out when theings get too risky. So, these BILLIONS of dollars in losses are really loses mostly to the "average" American investors, the "little guys", the retirees, etc.
The FIs and corporations scream about the losses to their capital funds and stock values; but it is really losses to the investors . . . the American people. The CEOs with their exorbitant salaries and "other compensations" have made out like bandits . . . they aren't hurting financially; if they were all fired tomorrow, they would all still be wealthy.
When are the American people going to wake up to the reality of it all. The FIs and corporations are bemoaining the fact that they "robbed the system to the point that it finally collapsed" . . . it collaped because they skimmed too much out of the system.
12-01-2008 @ 4:08PM
richard kelly said...
Duuuuh.now you know why this country is so screwed up. our smart leaders and the oil companys did this to the american people told all of you 4 years ago,we were headed for a DEPRESSION......now you see it..thanks oil people
12-01-2008 @ 9:09PM
Stock Trader Larry said...
All along the federal reserve chairman and treasury secretary were saying that it has not been confirmed that we are in a recession yet. Now it is finally confirmed. Today the fed chairman said this is not going to be a Depression. Sound familiar?
Does anyone really think he would admit that we were in a recession live on TV before, or that we are heading into a depression now for that matter?
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