Question by snps#21: I think I’ve figured out about when this recession will end. Do you have any thoughts?
I recently noticed that there appears to be a cycle in which the recessions in the labor market since the 80s last almost exactly 3 years, give or take a couple months. Looking at the early 90s recession, I noticed that the unemployment rate reached its low point of 5.2% in Q3 1989 and peaked at 7.8% in Q3 1992 – 3 years later. In the 2001 recession, unemployment bottomed at 3.8% in Q2 2000 and peaked at 6.3% in Q2 2003 – 3 years later. I also read an article stating that the boom in home sales peaked in Q1 2006, and appears to have bottomed back in Q1 2009 – 3 years later. Strangely enough, in Q1 2007, median home prices peaked, and now appear to be on track to retest their Q2 2009 lows in Q1 2010 (which makes sense, since bear markets pretty much always retest their lows before finally recovering) – 3 years later. Now I looked at the peak of the credit boom which occured in Q3 2007. It peaked and subsequently crunched after home prices peaked, which occured after home sales peaked. Then in Q4 2007, employment peaked, given the deteriorating credit conditions. Consumer spending peaked in Q2 2008. If everything follows the trend of 3 year sector recessions, then home prices hould bottom inQ1 2010, credit conditions should start loosening after Q3 2010, employment should bottom in Q4 2010, and consumer spending should rise after Q2 2011. BOOM! End of recession. What do you think?

Best answer:

Answer by JeffreyB
You are correct up to a point. Yes, this recession will likely begin to recover next year, however, all indications demonstrate that the recovery will be weak at best.

It appears that we have hit a bottom, mainly due to government spending which is also beginning to dwindle. The real question that must be answered is whether this return will generate any meaningful growth. While it is definitely reasonable that we will begin to see a significant rise in GDP and even the stock market, I think that the job market will be much slower to return without strong Government intervention.

Your modeling assumes that things were the same during the previous recessions and while their were similarities there were some major differences:
– the savings rate did not significantly rise. People are becoming more prudent thus reducing spending so even as jobs return, people will still spend less.
– all indications show that most of the jobs lost were middle class jobs, not low level service sector jobs that pay low incomes. The data also shows that when the jobs return, pay will be significantly lower.
– while recessions usually yield some increases in productivity, productivity has surged during this recession. While higher levels of productivity are great prospects for long-term growth, it is horrible for job creation because it means that firms are able to do more with less people indicating that many of the job losses we have experienced are permanent and we will have to replace them in other sectors.

Because spending is likely to be depressed this puts at an increased risk of a double dip recession. There are some reasons why this view may be wrong:
– We may be underestimating the amount of foreign investment that may return to our shores after the recession (but I doubt it)
– Other countries like China may become more consumption driven instead of export driven (but their is no indication this is happening. In fact, China is pursuing policies to make the opposite happen)

The important thing to note about any prediction is that it generally assumes things that are almost entirely unpredictable. We really can’t predict how other countries will react, whether we will once again attract the investment that grew our economy or if we will innovate into another sector.

Looking exclusively at the numbers of the past as a guide assumes so much that can’t be assumed. For example, what if we have four or five more sovereign debt defaults. These didn’t happen during the last recession.

In short, this recession is clearly more transformative than the one’s in the past not just due to it’s size but the fact that it is global in a way that past recessions weren’t meaning that not only does the US have to be able to recover but the rest of the world must improve as well and more than ever our success is linked to that of the rest of the world.

What do you think? Answer below!

Question by : Do you think a double dip recession is in our future?
Fears of double-dip recession rise
Dow falls below 12,000; consumer spending declines

http://www.washingtontimes.com/news/2011/aug/2/fears-of-double-dip-recession-rise/

Best answer:

Answer by isurvived
I’m financial secure and responsible. I don’t care.

Give your answer to this question below!

Best answer:

Answer by -_-
we’ll if we dont end up screwing ourselves over into becoming a communist, fascist, or any other governmenting flavor that ends in ist, we’ll probably be at about the same level of world wide power for a while in which case everyone will still think americans are rich a -holes.
as for the economy, they’ll most likely call it a recession started by unfair business affairs in the US being uncovered. but that’s only if they go deep enough. in general they’d probably just call it a large recession.
but what they’ll probably be more transfixed on in this time of history is the middle eastern activities with the whole Alequida/Taliban fiasco. If you step back far enough, you can kind of see that there’s been an almost world wide assault on that general area for years coming from at least the U.S and Russia not to mention the multiple coups and in many cases civil war.

Give your answer to this question below!

Best answer:

Answer by Doctor Deth
to fully end – may take 2-3 yrs and we probably still won;t be back to the same levels of employment and house prices and stock market values will definitely NOT be back anywhere near their peak levels of 2005 (houses) and summer 2007 (stocks). Bernanke just said today the recession MAY start START ending this year – stocks were up a lot today on that news

Add your own answer in the comments!

Question by 2angel7: What do you think about the economic recession in the United States?
What do you see as the long term impact of our current recession on the average family? How might it affect their future decisions? Thanks to all of you for your answers in advance.

Best answer:

Answer by ronald.glass@sbcglobal.net
People are now saving more as a result of the high flying 2000 to 2006. This is a result of fear and loss of faith in the economy. We will now have more regulation of the financial institutions and less speculation and gambling with belief in ever rising asset values. This will take years to correct (decrease unemployment) as this has been the worst crisis since the great depression. It will eventually lead to more protectionism (tariffs, etc.) to protect our economy.

What do you think? Answer below!

So given the current economic shitstorm, when are the skies gonna clear up?

Best answer:

Answer by DA bomb
Tomorrow

Add your own answer in the comments!

Question by Jannette: Do you think people should study history more before throwing around terms like Recession or…?
…Depression?
people that actually lived thru Recession or The Depression have a very different view when comparing it to what the Media is telling us today. Unemployment rate, mortgage and interest rate were off the charts.

Best answer:

Answer by Elizabeth
Well, it’s mostly the foreign media that is referring to the US economic situation as a “depression” and a recession is relative to whatever time period it is happening in. Just because a past recession may have been worse according to what was normal back then, doesn’t mean the current one isn’t affecting people just as much.

Know better? Leave your own answer in the comments!

Thanks, please explain the answer you picked.

Best answer:

Answer by Liberal AssKicker
Why do liberals measure the economy by the stock market when they control government, but by unemployment when they don’t?

Because all of you are heartless retards.

Unemployment stands at 10% and isn’t going anywhere. It has only gotten worse despite massive spending.

The recession isn’t over until Americans are working. THAT is what drives the GDP. You have to work to “produce”.

Know better? Leave your own answer in the comments!

Question by Barry T: when will you think we can get out of the world worst recession ever in history?

Best answer:

Answer by solostatus
?

What do you think? Answer below!

What makes you think it will improve things in 2011?

Best answer:

Answer by Shovel Ready
There are utterly no signs of encouragement for the future. Obama has killed us. Asia is booming, however. Electing a Marxist community organizer will go down in history as the biggest mistake ever made by an electorate in the history of the world.

Add your own answer in the comments!