For months now the dreaded "R" word has been floating around, and while most analysts are quick to point out that the technical definition of a recession has not been reached at this point, the signs are definitely pointing to a looming recession on the horizon. Now, there are a large selection of economists who are stating that the economy has already slid into a recession.

According to a poll by the Wall Street Journal, 70% of 51 economists who were polled over the past week are now reporting that the economy has moved into a recession.

Before we move ahead, let's take a look at the technical definition of a recession:

In macroeconomics, a recession is a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year

Fellow writer Zac Bissonnette highlighted the interesting (but somewhat controversial) story in American Apparel (AMEX: APP) about a week ago. He did a good job of explaining the company itself as well as the perverted CEO.

Although I think the questions surrounding the CEO's "lifestyle" are pertinent, I think they should be overlooked in favor of getting a piece of this high growth name at such an opportunistic time to buy. In short, I think the stock makes sense after a recent pullback.

Fundamentally, American Apparel appears very confusing at first. The older generation of readers is probably very baffled as to why a company that sells light-colored, tight fitting clothes is in the middle of a humongous growth cycle, understandably so. However, I'm more aiming this post towards those members of the younger generation who know just how powerful this concept is.

You've been hearing and reading all the bad news about the credit industry and all the nasty things that its difficulties might mean to you, but is anyone considering the positive outcome that this major reset of the American economy could mean in the long run? Being that I'm a cynical optimist (an oxymoron, I know), I have a perspective on this mess which many people might not be thinking about.

I've been telling you since late 2006 that we have entered a world economic shake down and that the biggest hindrance to further growth in the American economy is the fact that the balance sheets of American corporations are full. I cite the sudden spate of major acquisitions in pursuit of profit creation via consolidation as support for my opinion. As modern economics are conventionally structured, the only basis for economic health is steady growth. That makes the case for the necessity of this period of down slide only too palpable.

If we as a nation can financially hold it together for the next couple of years and swallow the huge bitter pill of a recession, when we come out on the other side of this mess we shall reap the incredible rewards of the "green economy" which is now in the process of being built. Today we are planting the seeds of America's next economic boom and I'm sorry to report that most of the rest of the world has mistakenly adopted our old patterns.

Evidence of a successful product transition for Savvis Inc (NASDAQ: SVVS) should come out in its October earnings conference call. The data-center company had a nice run post-restructuring, but I blogged as the stock was hitting $50 per share that it was worth taking some money off of the table.

With the stock having corrected to $36, it is worth chipping away at this growth company.

Savvis is building four new state-of-the-art centers which will expand capacity by 160,000 sq. ft. around the country. The company also has utilized options to take back below-market-rate contracts which it is in the process of re-marketing and repricing. Further, the data-center company is upgrading its network with new Cisco equipment, getting rid of older Nortel gear, and will link its metropolitan data centers with fiber to improve service for customers.

Savvis also has completely overhauled its balance sheet with lower cost-of-capital converts.

Earnings from these new investments and balance sheet changes should begin to be seen when the company reports in October. It is worth considering bottom fishing at this price level. If the product transition is slow, the stock has limited downside; if it is ahead of schedule, you can potentially make some good money.

Yesterday, Newell Rubbermaid Inc (NYSE: NWL) raised third quarter revenue and profit guidance. Revenue growth is expected to come in at the high end of the previously announced range of 5% to 7%, citing strength in Home & Family, Tools & Hardware segments, as well as favorable forex. Also, Newell said gross margins are expected to jump by 125 to 175 basis points, another big increase for the company, which showed good gross margin improvement earlier this year.

We blogged last week that investors should jump into Newell stock at $25 as it had gotten too cheap. Newell, which has been showing signs of beginning a sustainable turn around, has gotten hit hard in the recent stock market correction, with shares dropping from $30 to around $25, for a 17% decline.

However, we thought recent comments by Mark Ketchum, Newell's CEO, to analysts indicating it could meet its growth targets held some merit. Ketchum bought 20,000 shares of stock, according to a SEC filing a week ago Friday. Since blogging last week that investors should scoop up shares, Newell is up 12%.

Georges Yared notes in his insightful post about Amazon.com, Inc.'s (NASDAQ: AMZN):

Amazon has been what Wall Streeters call a "stalled-story". That means the company took most of 2004-2006 to build very expensive infrastructure and spent heavily on heavy marketing expenses to acquire customers. This spending spree took the winds out of Amazon's sails for those three years. Earnings growth, visibility and momentum suffered as did the share price.

Throughout the rest of the post, Georges explains the very interesting growth long-term growth story in Amazon, as he responds to my recent post about the short-term price action I expect in Amazon.

I believe this entire situation is a perfect example of two things: 1) How a mindset going into a position can affect what the investor is looking for; and 2) How two different people, with different perspectives, can potentially be right about a stock.

I've noted the different mindsets between going into a trade and going into an investment before on BloggingStocks. Something like Earthlink (NASDAQ: ELNK) would be an investment, while something like PF Chang's (NASDAQ: PFCB) or Google (NASDAQ: GOOG), would be pure trades, meaning there's no intent to hold the stock. PF Chang's trade I've discusses was event-driven with the belief that the company would cut guidance, which it did. Google's was a sentiment play due to the belief that stockholders would get nervous with the company's performance, and so far it seems they have.

It's important that people remember this concept because oftentimes when I have a thought on a trade it could be different from my long-term view of a stock.

Amazon.com (NASDAQ: AMZN), the global internet on-line retailer, reported amazing results once again. Some highlights include:

• Free cash flow for the quarter was $700 million, up from $375 million last year, or up 86%
• Return on invested capital (ROIC) jumped from 23% to 39%, with the on-line retailer forecasting it to jump triple digits
• Revenue growth was 35%, with operating profit growth up 149%

What is also interesting, from a company that is reaching its high-growth phase perspective, is that Amazon's shares outstanding for the past year are down 2%. WOW! Typically, the opposite is true and shares outstanding goes up to reward employees with stock options.

Another interesting point is Amazon's forecast for triple digit ROIC, which is a very similar path Dell Inc (NASDAQ: DELL) followed in the late 1990s. During this period as Dell's ROIC ramped, the stock went through the roof for a good three or four years.

I'd stay with Amazon as it enters its hyper growth phase.

Add another data point to the "sluggish growth" argument.

Wall Street, which typically has fewer and fewer institutional players actively trading the market as July stretches into August, due to summer vacations and travel, is currently split among those lingering around who see sluggish U.S. GDP growth up ahead, and those who see solid,
+2% U.S. GDP growth for 2007.

Well, Home Depot's (NYSE: HD) lowered F2008 EPS guidance to $2.30-$2.36 versus the Reuters consensus estimate of $2.59, represents an item of evidence for the sluggish growth camp. Home Depot's shares were virtually unchanged on the news, up 4c to $40.27 in Tuesday afternoon trading.

Home Depot said in a statement that it expects the housing market to remain sluggish through 2008. Both new and existing homes sales fell in May and the inventories rose. A sluggish housing market acts as drag on the U.S. economy not solely due to transaction value of homes, but because housing drives economic activity in many companion sectors, most importantly: furniture, and big-ticket appliances. Hence, sustained sluggishness in housing suggests a strong headwind for the U.S. economy.

Further, theoretically, it's not impossible for the U.S. economy to grow at a rapid rate despite a sluggish housing sector: other sectors could experience hyper-growth and offset a contraction in housing. Or a new technology could emerge that could substantially increase productivity and/or lower costs, leading to faster U.S. economic growth.

But historically those occasions are rare. Hence, Home Depot's lowered guidance suggests a housing-induced, slow-growth U.S. economy for at least 1 or 2 more quarters, and perhaps longer - - a fact that Wall Street's slow-growth analysts have no-doubt made abundantly clear today.

If Oracle Corporation (NASDAQ: ORCL) is going to get investor's attention, it will have to demonstrate some organic growth, and not growth from simply adding on more sales from the recent slew of acquisitions.

Oracle reports results following the market's close tonight with profits expected to rise to $1.81 billion, or 35 cents a share, excluding one-time items for the May 31 quarter. Net income was $1.3 billion, or 24 cents, a year earlier.

Ellison set a target of $50 billion in annual sales by 2012 in a recent meeting with his sales force. Hitting that target would require a 23 percent annual sales increase, a huge number. That figure exceeds Oracle's recent growth rate of about 20 percent.

The Redwood City-based software company will once again post massive cash flow generation, however, if investors sense intense pricing pressure by combining product offerings and dropping prices, do not expect much upside in Oracle's stock price. Conversely, if price compression is not too bad, investors may be all over this stock.

Archie MacAllaster, long-term participant in Barron's round table, is saying go long bank stocks. MacAllaster says he owns four of the five largest due to their cheap valuation.

The one MacAllaster is concentrated on is Wells Fargo & Co (NYSE: WFC) which has a 3.15% yield and has averaged 14% average earnings growth on 12% revenue growth for the past twenty years. During the past five years, earnings have grown 21% annually versus revenue 11%, with, the stock selling for just 12x 2008 estimated earnings versus 16x to 17x for the S&P 500.

Further, with the yield curve attempting to turn positively sloped this will allow banks to earn money from the yield within the next year or so. With the stock trading at $36, MacAllaster has a $42 price target.

China GDP growth of 11.1% for the first quarter is not a good number for the world's central bankers.

What is most worrisome about the recent economic reports is that China's monetary authorities have been attempting to slow down growth for quite some time. Short-term rates have been pushed up over 100 basis points during the past year with little effect. The stock market continues to boom with retail investors opening more than one million stock trading accounts the last week and 10 million the last four months -- greater than the previous four years combined, according to the Financial Times.

Getting economic growth down to the 9% targeted growth rate has remained elusive as the most recent above-par GDP growth rate follows a 10.6% reading for the first quarter of 2006.

U.S. investors have added more fuel to the fire purchasing $5.2 billion of Chinese equities. While this might not seem like a lot by U.S. stock market standards, this level of investment can often be too much for an emerging market to handle. Further, the appreciating yuan is somewhat of a liability this late in an economic expansion. As the yuan appreciates versus the dollar, Chinese companies convert dollar to yuan to profit from the currency appreciation, adding further liquidity to the economy.

Both government and monetary heads were hoping not to have to take a sledgehammer to the Chinese economy prior to the 2008 Olympics. However, they might not have a choice. This also means the Fed will remain on hold until the U.S. economy shows data indicating meaningful economic weakness, not wanting to add more fuel to China's overheating economy.

From a US investment perspective, if stronger than expected economic data come out the next month or so, take some money off of the table. This means central bankers around the world will tighten to keep world-wide inflation from taking off.

Chico's FAS (NYSE: CHS), the great growth stock that has run into hard times this past year, appears to be successfully addressing its lack of growth. Same-store-sales growth has returned after a prolonged period of big declines for this women's retailer.

Last night, Chico's reported same store sales increased 5.2% and total company-wide sales increased 22%. However, one of the flaws of retail monthly sales data is that it does not tell investors what gross margins were. Did management slash prices to get sales growth or did the company successfully change its product mix?

Look for analyst reports today to see if Chico's successfully changed its product mix and did not slash prices to get sales going. If improved product mix was the reason for the sales jump, it may be time to jump back into this stock.

When Chico's has its product mix right, its loyal, high-end customer base will use its deep pockets to buy a lot of stuff, which amounts to huge free cash flow generation for shareholders. With the stock trading for around $25, down from $48 in early 2006, this stock could revisit its former highs if sustainable growth has returned.

Chico's FAS (NYSE: CHS), the once high flying retailer, hit a serious bump in the road in early 2006. The outstanding same store sales growth that drove the stock to record heights rolled over and so did the stock. After peaking in early 2006 at $49, the stock is now down to $20, a 60% drop.

Last night, Chico's reported results and it appears the worst in same store sales (SSS) could be coming to an end. The much watched industry metric could turn positive by the Spring.

SSS for the Chico's stores came in flat, which is a big improvement from 2006 figures. However, management said February SSS were down 3%. Therefore, Chico's is still going through a bumpy period.

With the stock down 60% from its high, it is time to start getting into this stock. Chico's is debt fee, is a cash flow machine and could be a private equity candidate if SSS improves in the Spring and the investment community doesn't drive the stock higher.

Retailer with a loyal clientele come back in droves when the company gets the product mix right.

Sloppy is an accurate description of yesterday's conference call. The company shifted subscriber growth expectation out to 2008, saying XM Satellite Radio (NASDAQ: XMSR) is focused on the auto OEM and not the retail market. OEMs will begin to ramp XM Satellite services in greater numbers in 2008, management claimed.

Pushing growth out to 2008 for a so-called growth company in a so-called growth industry is not good. Also, converting customers from promotional periods to paying customers, or gross adds to net adds, remains low. Which has always been difficult to figure out in this industry.

It also came across that more and more of XM's success is based upon closing the deal with Sirius Satellite Radio (NASDAQ: SIRI). Although management attempted to say otherwise.

Management also went into some rambling about how it will always take care of customers that own older radios -- which was nice, but unclear as to why management emphasized this during the call. What are you going to do -- hang your customers out to dry?

Also, the top management change made last year appears not to be having the intended consequence. After XM started showing weakness in maintaining and getting subscribers in 2006, the satellite company brought in Nate Davis to get the company going again, but his arrival has done little to improve the outlook for this company.

Sirius releases earnings this morning. This Fly has been recommending buying Sirius on weakness and staying away from XM for a long time. Hopefully, Sirius does not push its growth targets out till 2008. We will see.

The results for the December quarter and all of calender 2006 are in -- and it proved to be a pretty good year. Corporate earnings, especially in the December quarter, were robust and managements were more open to allow a little breathing room for first quarter 2007. In other words, we heard optimism for 2007. As we entered 2006, managements were still very cautious with Wall Street, and would not comment optimistically about what lay ahead for 2006. Well, that's history. Let's look forward.

Value investing in 2006 proved to be the winning formula. Most well-run equity funds saw double digit returns and portfolio managers are now being paid their 2006 bonuses. But let's peel back the onion a bit and remind ourselves that past performance does not guarantee future results. The energy sector buoyed many a portfolio as we witnessed record profits, so much so, that if ExxonMobil Corporation (XOM) earns anything below $9 billion a quarter, it will be viewed as disappointing!!

Growth is back in vogue. Portfolio managers are moving into the sexier sectors of health care, technology and newer-consumer concepts. Money is moving out of financials, energy and the commodities. Since July 2006, the NASDAQ and the Russell 2000 have outperformed the S&P 500, the former up over 17%, the latter,13%. The in-flows into equity mutual funds crossed over $10 billion just for last week. New dollars looking for growth.

So where do we go from here?