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The Almighty Buck United States

US Has Been In Recession Since December 2007 540

Posted by kdawson
from the not-news-to-a-great-many dept.
The National Bureau of Economic Research said Monday that the US has been in a recession since December 2007. The NBER is a private, nonprofit research organization of academic economists who determine business cycles. The stock market took a dip on the news that reached double-digit percentages for some tech stocks.
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US Has Been In Recession Since December 2007

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  • by smitty_one_each (243267) * on Tuesday December 02, 2008 @08:18AM (#25958251) Homepage Journal
    Recession pshaw!
    The NumBER's a flaw.
    A portfolio of duds
    Requires the suds:
    Burma Shave
  • It's about time they came up with that revelation. What matters now is that we get out of it by shopping our asses off this Christmas!
    • by erroneus (253617) on Tuesday December 02, 2008 @08:44AM (#25958465) Homepage

      "They" have known the economy was in trouble for at LEAST a year and likely longer. But they knew one thing for sure -- if they announced or reported it as such, the economy's floor would have dropped out. So instead, the news and other outlets have been dropping hints and skirting the big picture by talking about failing elements of the economy hoping everyone will start to form their own conclusions. And every time the word recession was asked far beyond a year ago, the only answer was "not yet" and they kept hoping things would get better.

      The Bush economic stimulus package worked to some degree. Many people horded it -- stuck it in the bank. Other people paid bills with it. But the over-all result was measurably positive... and the government did not commit trillions to making that effect. If that notorious $700bn were committed in the same way, we would see a HUGE rebound in the economy... instead, the money is given to banks to encourage them to do things they are unwilling to do... and what's worse, the government isn't getting the money back!

      • by Geoffrey.landis (926948) on Tuesday December 02, 2008 @09:35AM (#25959071) Homepage

        "They" have known the economy was in trouble for at LEAST a year and likely longer. But they knew one thing for sure -- if they announced or reported it as such, the economy's floor would have dropped out. So instead, the news and other outlets have been dropping hints and skirting the big picture by talking about failing elements of the economy hoping everyone will start to form their own conclusions. And every time the word recession was asked far beyond a year ago, the only answer was "not yet" and they kept hoping things would get better.

        The Bush economic stimulus package worked to some degree. ...

        Huh? The April hand-out? As far as I've heard, it had almost no effect at all.

        (it was too small and too untargeted to have any significant effect on the economy-- it essentially was a very small tax cut, primarily at the lower income levels. Might have prevented one or two bankrupcies, if it happened to hit somebody right on the razor's edge, but wasn't enough to save anybody's house.)

      • Re: (Score:3, Informative)

        by Ihmhi (1206036)

        According to the CIA World Factbook entry on the United States [cia.gov], the total population of people 15+ in the states is 242,677,893. Let's assume for the sake of discussion that each and every one of these people had a job and was eligible for an even cut of the $700bn dollars. That would work out to only $2,884.48 [google.com], give or take a few cents for postmarking the checks. What's that, one or two mortgage payments? Maybe 2-3 months rent?

    • by Roland Piquepaille (780675) on Tuesday December 02, 2008 @08:45AM (#25958485)

      This year, like the previous year, and the year before that, I will definitely NOT shop my ass off for Christmas, nor will I stuff my face silly on Christmas, only to feel bloated the next day and have to diet so I can stomach New Year's eve binge (which, in case you didn't guess, I never do either).

      Christmas, like Halloween, father/mother/grandma/grandpa days, are commercial inventions, fake joy and fake happiness destined to make you shell out your hard-earned money and, since the great Bank Robbery^H^H^H^Hbailout plan, supposedly help the economy recover.

      Well, I paid my loans, I don't live on credit, I spend my money cautiously, even when there's no "crisis", so I fail to see why I must buy Christmas junk to support those who don't.

      • by cthulu_mt (1124113) on Tuesday December 02, 2008 @08:58AM (#25958613)

        Well, I paid my loans, I don't live on credit, I spend my money cautiously, even when there's no "crisis"

        You, sir, are a sucker.

        • by Nursie (632944) on Tuesday December 02, 2008 @10:56AM (#25960351)

          Why is this a troll post?
          Mod parent insightful.

          I'm also a sucker. I similarly stayed out of debt, didn't take part in the dangerously overinflated housing market, used credit cards responsibly and generally lived within my means. Not that it was painful, I've got reasonable means as a software engineer. But I didn't join in the great-big-debt-party with everyone else.

          Why am I a sucker? Because the government will now tax me to prop up people that did get too far in, that did take that dumbass high multiple on a house, that did get into debt. We can't have the people of the country actually paying for their actions, no. Rest assured, I really am a sucker for thinking that keeping my own finances in order was an advantage.

          • Sucker (Score:5, Insightful)

            by copponex (13876) on Tuesday December 02, 2008 @01:52PM (#25963379) Homepage

            Yes, you are a sucker. But because you believe that welfare and the bailout are the main reason the government is taking your money.

            Military spending eclipses any other program by 2 to 1. So, first, you should be complaining about the defense shield program, which won't work, the Iraq war, which didn't work, and all of the other investments in destruction that enrich corporations and their owners, and do nothing for the people that pay those taxes. To put it in perspective, you'd have to have a 500 billion dollar bailout every single year added together with health care, welfare, and other social services in order to match military spending. If we paid the average per capita that other nations do, we'd spend around 180 billion instead of 1000 billion.

            If you didn't want higher taxes, I hope you didn't support the war. Taxes will go back to normal levels, because someone has to pay for the three billion dollars that are flushed down the toilet in Iraq every week, on top of all of the other idiotic military spending programs that are never criticized. Even talking about military spending is anti-American, but criticizing taxes that improve the lives of the taxed is considered patriotic. How's that for some cognitive dissonance.

            So, in conclusion, I'll repeat something I heard quite a bit in 2003. If you don't want your taxes spent on programs that you don't want, just remember, this is America: love it or leave it.

      • by D Ninja (825055) on Tuesday December 02, 2008 @09:46AM (#25959275)

        Christmas, like Halloween, father/mother/grandma/grandpa days, are commercial inventions, fake joy and fake happiness destined to make you shell out your hard-earned money

        Well, I agree with you that all those holidays have been made commercial (the recent death due to Black Friday shows only how much), there *is* actually a true meaning behind Christmas. Whether you celebrate it (or even believe in it) is up to you. But, some people (myself included) appreciate the holiday for that reason and try not to let the commercialism of the season get them down.

        • Re: (Score:3, Funny)

          by Eli Gottlieb (917758)

          Yeah, there is a real meaning behind "Christmas": the entire population of the temperate Northern Hemisphere deluding themselves into thinking that cold and lack of daylight are somehow jolly!

          In case nobody's told you, your savior was born in April or May.

          • Re: (Score:3, Interesting)

            by Anonymous Coward

            Even if GP wasn't referring to it, some of us like to celebrate the secular meaning of Christmas: peace on Earth and goodwill toward men. While I think we should practice these ideals EVERY day, it's nice to have a holiday that celebrates and reminds people of these things explicitly.

            You don't have to get behind that; nobody's forcing you. But you shouldn't try to disparage those of us that DO find happiness through it. It's just not the Christmas spirit =)

          • by Golias (176380) on Tuesday December 02, 2008 @10:49AM (#25960247)

            Yeah, there is a real meaning behind "Christmas": the entire population of the temperate Northern Hemisphere deluding themselves into thinking that cold and lack of daylight are somehow jolly!

            In case nobody's told you, your savior was born in April or May.

            Christmas is the day of the Mass of Christ, not Jesus's birthday. The Catholic Church chose the day to coincide with an existing holy period in pagan Europe, since people were already in the habit of celebrating that week. Nobody knows (or particularly cares) what the exact date was. Christian scriptures only hint at the year by recording stuff like who was king at the time.

      • Humbug! (Score:5, Funny)

        by ObsessiveMathsFreak (773371) <obsessivemathsfreakNO@SPAMeircom.net> on Tuesday December 02, 2008 @10:00AM (#25959451) Homepage Journal

        For the last few years, I have taken the stance that Christmas could do with a good Humbuggering, and have taken to actually saying, literally, "Humbug" whenever people start with the "Merry..." , "Happy,..." etcs and general ostentatious jolliness on December 1st!

        For many years prior, my lack of delirious excitement and palpable enthusiasm, as well as overt cynicism about the commercialization and general over-selling of the holiday, had me labeled "miserable", "hopeless", "a grump" and in recent years "the grinch". The way I see it, "Humbug" is just giving the crowd what they want, and it has the added advantage that people no longer expect, nay, demand my mandatory jolliness throughout the "season".

        I actually enjoy Christmas, but the way I see it, the holidays are from the 23rd to the 31st of December. None of this all winter madness. The bastards are not getting once once ounce of holiday cheer out of me outside of those dates, and inside of them, I'm spending most of the time asleep.

        So in conclusion; Christmas!? HUMBUG!!!

        • Re:Humbug! (Score:4, Insightful)

          by cayenne8 (626475) on Tuesday December 02, 2008 @10:33AM (#25959961) Homepage Journal
          Man...I can only guess that you are the LIFE of every party you go to.

          :)

          Seriously...isn't any excuse to be happy and have fun a worthwhile one? Life it too short to spend it being 'down' or cynical, or asleep. Frankly, I look at probably Halloween as the start of my fun time season. The heat has broken (was nice to actually put on a sweater a couple weeks ago)...and there are reasons to hang with family and friends for food and parties through T-Day, Xmas, New Years and right on into Mardi Gras. Take a break after that to recoup, the start looking forward to vacations, Jazzfest and other things that pop out during the warm weather days.

          I really hope you aren't as miserable as your post sounds...man, really life is WAY too short....take advantage of any chance you can to get out and enjoy it. I'm not even saying you have to celebrate Xmas itself, but, no reason to not have fun with othere just to make a 'point' ya know? Doing that hurts no one but yourself.

  • A few thoughts (Score:4, Informative)

    by daveschroeder (516195) * on Tuesday December 02, 2008 @08:21AM (#25958269)

    A long-standing rule [bloomberg.com] of thumb [businessdictionary.com] for "recession" is that it is defined as contraction in the GDP for at least two consecutive quarters (six months).

    More info [theglobeandmail.com].

    By that long-accepted definition of recession, the US is not even yet in a recession. The US GDP decreased for the first time in recent history only in the third (most recent) quarter, by 0.3%. In the second quarter -- earlier this year -- real GDP increased 2.8% [bea.gov].

    But how long has the media been ceaselessly hammering it into our heads that we're in a recession, tolling the bells of doom and gloom? How many times have we heard the phrase, "In these tough economic times" inserted into nearly everything we see or hear? How long has the drumbeat of the "recession" been played, when we had nothing but positive growth reports, even in the midst of the sub-prime crisis?

    Worse still, many people actually believe that whatever recession we'll end up having is exclusively the fault of only the current President, and can't look back to anything before the year 2000 [meridianmagazine.com] for any blame whatsoever. The egregious irresponsibility of the sub-prime lending has a long and sordid history.

    It is this kind of partisan willful ignorance on the part of many that has enabled the political agenda among some to drive the notion that the US is in a severe recession caused by the ineptness and reckless irresponsibility of the Bush administration, when the US had nothing but growth in the GDP until only a month ago. If you asked most people how long they thought the economy had been shrinking for negative, they'd probably say things like, "A year? Two years?"

    Wrong.

    Last quarter. And we just found out about it.

    So we've heard talk, day after day, night after night, an incessant drilling into our heads that we're in a deep and severe recession -- one that may even now rival the Great Depression! -- creating panic and fear, causing people to pull investments and hold onto their wallets, change purchasing plans, in turn creating bleak forecasts for manufacturers and other business, which causes job loss, and then -- voilà!:

    Is it any surprise we're going to have a recession on our hands?

    Capitalistic systems only work when the participants have faith in the system -- when that faith collapses, for whatever reason, you get a recession. And that's a normal and accepted part of the cycle.

    • Re:A few thoughts (Score:5, Informative)

      by Sj0 (472011) on Tuesday December 02, 2008 @08:30AM (#25958341) Homepage Journal

      The inflation adjusted debt accrual rate for the US government in the past 8 years has been about 380 billion dollars per year. This is equal to 3.4% of the total size of the economy.

      Ignoring inflationary measures by the US government, the GDP has shrunk, not grown, for quite some time.

      • Re:A few thoughts (Score:4, Informative)

        by timeOday (582209) on Tuesday December 02, 2008 @09:44AM (#25959213)
        And beyond that, to mean anything at all you must use the per capita inflation-adjusted GDP, which takes almost another 1% off the GDP growth rate.
    • Re: (Score:2, Insightful)

      by eldavojohn (898314) *

      It is this kind of partisan willful ignorance on the part of many that has enabled the political agenda among some to drive the notion that the US is in a severe recession caused by the ineptness and reckless irresponsibility of the Bush administration, when the US had nothing but growth in the GDP until only a month ago. If you asked most people how long they thought the economy had been shrinking for negative, they'd probably say things like, "A year? Two years?"

      Why do you jump to the defense of Bush? Where did anyone attack Bush for this? Is it in the article? Are you responding to ... to what exactly? Yeah, when shit hits the fan, people tend to blame those in charge ... but where is he being blamed?

      From the article:

      The Bush administration won approval from Congress on Oct. 3 for a $700 billion rescue package for the financial system. Bush said in an interview with ABC's "World News" to be aired Monday that he would support additional intervention if necessary to end the recession.

      Note: you are one of the last hard core republicans with your eyes shut and your fingers in your ears screaming "I CAN'T HEAR YOU" as my relatives that don't have high paying jobs are having to pawn stuff and as my friend's fathers become une

      • Re:A few thoughts (Score:4, Interesting)

        by daveschroeder (516195) * on Tuesday December 02, 2008 @08:42AM (#25958459)

        Recessions are a normal part of the capitalist business cycle. Recessions wash out excesses in the system by shaking out inefficient companies, thus clearing the way for new competitors, and they work to keep supply and demand in sync over the long term. [msn.com]

        [...] recessions are considered a normal part of a capitalist economy [...] [businessdictionary.com]

        Etc.

        As for your assumptions about Bush:

        1. I didn't vote for Bush.

        2. I voted for Obama.

        So it's kind of funny you just called me "one of the last hard core republicans" when I'm anything but. What I don't like is hypocrisy and the one-sidedness of always only blaming one political party or one President -- whether it's Clinton and the Democrats or Bush and the Republicans -- for whatever ill is at hand. For the current economic situation, we had unprecedented political opportunism: it was politically expedient and beneficial for some liberals to push the notion that we're in really bad shape, even rolling out the Great Depression talk, and that Bush (and all the other things you hate about Bush, like the war!) is to blame for it.

        There are so many contributing factors that it would be ridiculous to assert that economic decisions made in the current administration in the last 8 years have nothing to do with it. But at the same time, it's equally ridiculous to put blinders on to the incredible irresponsibility and shortsightedness of the decisions with regard to sub-prime lending in the name of getting people into homes. We never fully paid the piper for the internet bubble collapsing, and a lot of that, on a large scale, was parlayed into a booming housing market (and artificially created, so some extent, because of changes encouraged in lending practices).

        • Re: (Score:3, Funny)

          "2. I voted for Obama."

          My condolences.
        • by spun (1352) <loverevolutionary&yahoo,com> on Tuesday December 02, 2008 @10:46AM (#25960181) Journal

          Subprime lending has very little to do with the current recession. The default rate is only slightly higher than average. The real problems have to do with derivatives, naked shorting and other financial shenanigans that Washington has refused to regulate. When we repackage debt, and insurance on said debt, and resell both dozens of times over, even a slight increase in defaults will knock over the whole house of cards. When we allow people to sell stocks they don't even own, and haven't even borrowed as in regular shorting, nothing but chaos can ensue.

          In short, it is not the poor, who were simply patsies, who caused this mess. It was, as always, the greedy rich. Blaming the poor and those who try to help them get a fair shake is simply despicable.

          • Re: (Score:3, Interesting)

            by Jaeph (710098)

            There's plenty of blame all around.

            When someone signs a contract, it is their responsibility to carry through on that contract, and their fault if they don't. Poor/rich...I really don't care.

            So from the banks that loaned vastly more than they should, all the way down to the "poor schmoe" who bought into a mortgage that he couldn't afford...they all are to blame.

            What I don't like is that all of them are now coming to me asking for money. I didn't do nothing, but apparently a democracy means that reckless c

          • Re: (Score:3, Insightful)

            by TheSync (5291)

            Subprime lending has very little to do with the current recession. The default rate is only slightly higher than average. The real problems have to do with derivatives, naked shorting and other financial shenanigans that Washington has refused to regulate.

            You are correct that mortgage default rates are not particularly higher now than they were during the 2001 "pseudo-recession". But there are two problems:

            1) if you defaulted a few years ago, the bank could sell your house and would break even or possibl

          • Re: (Score:3, Interesting)

            by cayenne8 (626475)
            "Subprime lending has very little to do with the current recession....In short, it is not the poor, who were simply patsies, who caused this mess. It was, as always, the greedy rich. Blaming the poor and those who try to help them get a fair shake is simply despicable."

            While I agree largely that much of this was from those weird, unregulated repackaging of debt...you're saying that the 100's of thousands of defaulted home loans, the severe (in some areas) devaluation of property, has nothing to do with th

      • Re:A few thoughts (Score:5, Insightful)

        by 1lus10n (586635) on Tuesday December 02, 2008 @08:46AM (#25958489) Journal

        (half my retirement funds are now gone).

        Like most things in your post thats wrong. Stop believing in the Obama campaign as the source of all your financial info. The correct statements would be pick one:

        My retirement fund is now worth half what it was

        This recession has actually caused my retirement fund to shrink

        Or my personal fave:
        What the hell ! You mean we can't buy big houses, SUV's and rack up credit debt endlessly ?!?! What do you mean we have to 'compete' for jobs ? Whats this crap ?? Dont choo kno I'm an American !!!

        Its time to sort the wheat from the chaff. Man the fuck up. (and spread that to your friends, and their parents too - the great depression was FAR FAR FAR worse than this and they were not whining as much as people now either.)

        • Re: (Score:3, Insightful)

          by falcon5768 (629591)
          Actually if we are going by great depressions comparisons, if this truly IS another one, then we have MUCH worse coming down the bend.

          The great depressions didn't just become "great" overnight. It took YEARS and YEARS and 2 presidents before it turned around.

          • by sdpuppy (898535) on Tuesday December 02, 2008 @09:45AM (#25959247)

            Actually if we are going by great depressions comparisons, if this truly IS another one, then we have MUCH worse coming down the bend.

            The great depressions didn't just become "great" overnight. It took YEARS and YEARS and 2 presidents before it turned around.

            What if we're in a "lousy" depression?

            (couldn't resist :-))

    • Re:A few thoughts (Score:5, Informative)

      by rodney dill (631059) on Tuesday December 02, 2008 @08:30AM (#25958355) Journal
      The 'Rule of Thumb' definition aside, the NBER [yahoo.com] decides for itself when a recession occurs or not. James Joyner at OTB [outsidethebeltway.com] has a pretty good post on it. At best the GDP increase provides mixed signals, as the economy isn't doing great. I do agree that all the gloom and doom may be premature. (and could become self fulfilling.)
    • Re: (Score:3, Interesting)

      by Majik Sheff (930627)

      As long as there is a Republican president in the white house, the press will do everything in their power to convince the populace that we are all doomed.

      As soon as Obama takes office, prepare for the heralds to sing: The recession is over! We are winning in Iraq! Global warming has reversed!

      As far as the "recession" goes, if history is any indicator we only have a few months of it left anyway. All we need now is a few executives being charged with various crimes to appease the masses and life will go o

    • by SmallFurryCreature (593017) on Tuesday December 02, 2008 @08:42AM (#25958457) Journal

      The system as it existed worked on faith. Not facts. Faith that an industry that produces nothing and adds no value can be the most significant industry nonetheless and make EVERYTHING else secondary. It is not the first time.

      During the internet bubble, real businesses that produced real goods that real people bought with real money were considered to be worthless. The future was in... well pets.com and what not. Pipe dreams, ad based revenue. It became hard for ordinary businesses to even find investment because they didn't promise the sky.

      Of course, you can't say that the financial industry is much the same, that all these speculators add nothing, are fluff. But that is what happened, we had the financial industry fluffing itself up by selling itself its own products over and over again. This whole mortage reselling would be similar to Ford and Chrysler (apologies if they are the same) buying each others cars over and over and counting that as total production. The financial industry obtained a far larger share of the total market then it really is supposed to have. It worked because everyone believed it, believed that Wall Street really is important. It isn't.

      Then it collapsed, people did indeed loose fate. Somewhere someone burst the bubble. What we got now is not so much a reccesion, as a re-appreasal. We now got to decide what exactly the role of the financial industry is supposed to be. Is it a service industry to the rest of the industry (exactly like say a cleaning company is a service industry) or is everyone else in the service of the financial industry.

      Do we want banks to be just banks, lend our money to others for a profit that they partly keep and partly give to us or speculators, driving up prices, investing only in their own profit margins rather then investing long term in other industries.

      A few economists, even as high up as the world bank are daring to question the system right now. That perhaps we should see the bank again as it once was, a service to society rather then the controller of the entire economy. No longer should the financial industry have a 40% share of the economy but rather something closer to 4%, back to REAL industry that actually produces value being the motor again, not shoveling money around.

      Frankly I been watching the developments with great intrest. Right now I think a LOT of goverments are showing their true colors, bailing out banks that were never trustworthy, never played by the rules to help out the rich who put their money in their high risk accounts at the cost of the working mans taxes.

      • by speroni (1258316) on Tuesday December 02, 2008 @09:05AM (#25958705) Homepage

        The other thing is, even the "real" production is useless crap that has designed obsolescence.

        They talk on the news about how holiday spending is going to be low and how much its going to hurt the economy. Do we really want an economy based on the sales of what amounts to Christmas toys?

        Did you know that when the Core Inflation rate is calculated they disregard things like milk, bread and fuel? You know the stuff that people...need.

      • Re: (Score:3, Interesting)

        by jcarkeys (925469)

        The system as it existed^W exists works on faith.

        Our entire economy, since we've moved from the gold standard in the 70's to a pure fiat based monetary system is still entirely, 100% based on faith. Your money has no value other than what other people think it's worth.

        • by Attila Dimedici (1036002) on Tuesday December 02, 2008 @09:29AM (#25958987)
          The gold standard monetary system is also based 100% on faith. Gold only has the value that other people think it has. To me I would be willing to do about an hours worth of work for a pound of gold (unless of course someone thinks it is worth more than that, and will give me more than that for it). The idea that gold has significant intrinsic value is bullshit.
          • by johnsonav (1098915) on Tuesday December 02, 2008 @09:58AM (#25959417) Journal

            Gold only has the value that other people think it has.

            While that is true, the real argument for the gold standard is its fairly constant and predictably increasing supply. All the gold that will ever exist on earth is already here, and we find a little more every year. The main difference is that the government can't just make more gold when politically expedient, like they can with paper money. However, that's also its largest negative according to most economists. The current bailouts would be impossible with gold coins.

            • by Abcd1234 (188840) on Tuesday December 02, 2008 @10:26AM (#25959851) Homepage

              All the gold that will ever exist on earth is already here, and we find a little more every year.

              And thus it places a hard cap on the size of your economy, and creates a real possibility of deflation, which is far *far* worse than inflation. Yay gold standard!

      • by dc29A (636871) * on Tuesday December 02, 2008 @09:14AM (#25958817)

        Of course, you can't say that the financial industry is much the same, that all these speculators add nothing, are fluff. But that is what happened, we had the financial industry fluffing itself up by selling itself its own products over and over again. This whole mortage reselling would be similar to Ford and Chrysler (apologies if they are the same) buying each others cars over and over and counting that as total production. The financial industry obtained a far larger share of the total market then it really is supposed to have. It worked because everyone believed it, believed that Wall Street really is important. It isn't.

        Then it collapsed, people did indeed loose fate. Somewhere someone burst the bubble. What we got now is not so much a reccesion, as a re-appreasal. We now got to decide what exactly the role of the financial industry is supposed to be. Is it a service industry to the rest of the industry (exactly like say a cleaning company is a service industry) or is everyone else in the service of the financial industry.

        It is a mistake to assume that the current financial clusterfuck is because of bad mortgages or a bubble burst (we didn't have any serious issues with the Dot Com bubble). The bad mortgages are nothing but the trigger to two serious underlying problems:

        (1) Most people in western countries live beyond their means.
        (2) But most importantly: Credit Default Swaps.

        The current financial situation is due mostly to [banks/investment firms/everyone and their dogs] betting on the failure of different entities. This is all due because of Credit Default Swaps are totally unregulated and they are a speculator's wet dream. The current house of CDS cards of about 50+ trillion $ (yes, trillion) is crumbling. First wave was MBIA and other bond insurers being downgraded by rating firms. This immediately triggered a metric fuckton of CDS collateral calls. Bear Stearns and Merill go under (well, saved last minute). Freddie and Fannie get bailed out, this immediately calls for another round of collateral calls. This second wave caused the collapse of Lehman, the nationalization of AIG and the massive cash infusion into Citi. If either big auto makers goes down, prepare for the worse. Oh and Goldman Sachs has started to write down bad assets too, no bank is safe.

        This all thanks to speculators betting on companies with their unregulated toys: the Credit Default Swaps. It has nothing to do with believing or not in a system or losing faith in Wall Street. It's all about making a bunch of really bad bets without having cash on hand to cover the losses. And now that the bets are lost, it's time to pay. But t here is no money ...

    • Re:A few thoughts (Score:4, Informative)

      by qazsedcft (911254) on Tuesday December 02, 2008 @08:59AM (#25958625)
      A long-standing rule of thumb for "recession" is that it is defined as contraction in the GDP for at least two consecutive quarters (six months).

      Yes, but when measuring this economists always take the so called "real GDP". In other words, GDP adjusted for inflation, using the official CPI figure. What they don't tell you is that the CPI is completely disconnected from reality [shadowstats.com] - a figure manipulated by government economists so that inflation-adjusted payments and benefits can be as low as possible. CPI has absolutely nothing to do with real inflation and "real GDP" has absolutely nothing to do with real economic growth.
    • Re:A few thoughts (Score:4, Informative)

      by mbone (558574) on Tuesday December 02, 2008 @09:10AM (#25958751)

      I hate to say it, but you are living in cloud-coo-coo land. Of course we are in a recession, and have been for some time. In my business, I deal with corporations, both large and small. All are hurting, all are cutting spending, and this is a major topic of conversation at literally every meeting I go to. To think that this is driven by the media is to be deluded.

      The "Mandate of Heaven effect," by which the party in power gets blamed for a bad economy, and praised for good results, regardless of what they had to do with it, is another matter. I agree with you in principle, but it seems clear to me that the current administration had plenty to do with what's going on in practice.

    • Re:A few thoughts (Score:4, Insightful)

      by Eunuchswear (210685) on Tuesday December 02, 2008 @09:10AM (#25958755) Journal

      Worse still, many people actually believe that whatever recession we'll end up having is exclusively the fault of only the current President, and can't look back to anything before the year 2000 for any blame whatsoever [meridianmagazine.com]. The egregious irresponsibility of the sub-prime lending has a long and sordid history.

      It doesn't matter how many times you repeat this stupid lie, it's still a lie. (A reasonable summary of Cards bullshit: http://adastrum.kansascity.com/?q=node/408 [kansascity.com]).

      • Re: (Score:3, Insightful)

        by bendodge (998616)

        How about the New York Times [nytimes.com]? Is that good enough?

        In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

        ''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

        Note the date on the article: September 30, 1999

    • Re: (Score:3, Interesting)

      by smoker2 (750216)
      A pyramid scheme only works when the people involved have faith in the system. Also, when a pyramid scheme collapses it is only the ones at the top who get to make for the hills with all the cash. Perpetuating a system that is designed specifically to move money to the top then allows them to fuck off with it leaving everybody else in the shit is not acceptable in a supposedly democratic state. Boom and Bust benefits only those at the top. Occasionally a few others might catch the wave and get out before it
    • Re:A few thoughts (Score:4, Interesting)

      by An dochasac (591582) on Tuesday December 02, 2008 @10:33AM (#25959977)
      "A long-standing rule of thumb for "recession" is that it is defined as contraction in the GDP for at least two consecutive quarters (six months).

      That it is, a "rule of thumb", the offical definition of a recession is when the National Bureau of Economic Research (NBER) business cycle dating committee agrees that there is (was) a recession, and they have now agreed to that. This is the definition which also showed that the Bush1.0 Gulf War 1.0 recession ended more than a year before newly elected Bill Clinton was elected and took credit for the recovery. And the "y2k" recession began before Bush2.0 was elected to take the blame. (That being said, his and the fed's management of that recession and the 9/11 "recession" has certainly created more long-term damage to the economy than either Clinton or the two Bush's could ever do on their own.) NBER's claim that we've been in a recession is akin to your doctor pointing out that you have a hangnail after you've been beheaded. For a look at some real scary statistics, at the St. Louis Fed's Net Free or Borrowed Reserves of Depository Institutions [stlouisfed.org] numbers going back to 1950 or Excess Reserve of Depository Institutions going back to 1925. [stlouisfed.org] or The Adjusted Monetary Base [stlouisfed.org] going back to 1910. Or any of several other monetary statistics [stlouisfed.org] that are several black swan SD's away from their multigenerational mean.

      Bush's Treasury chairman Paulson and Bernanke have engineered a truly astounding experiment in monetary policy topped only by Robert Mugabe's 10^21% hyperinflationary monetary policies. The economy has enough inertia that we will see 1-5 years of deflation or disinflation as the "imagined" debt money supply virtually disappears, leaving too many goods chasing too few dollars. But the medium/long term effect is inflation, because only currency printing presses and inflation can reduce a debt brought on by a mad government and personal debt fueled spending spree that powered the economy for at least a decade.

  • by nimbius (983462) on Tuesday December 02, 2008 @08:23AM (#25958281) Homepage
    step aside intel 45 nanometer chipset, cloaking materials, telepathic controllers, and internet technology....its time for an economic recession story from the National Bureau of Economic Research.

    you nerds can thank us later after you're done spending your way to patriotastic victory over the stock plunge and housing crisis.
  • Not a recession (Score:5, Interesting)

    by PinkyDead (862370) on Tuesday December 02, 2008 @08:23AM (#25958283) Journal

    Sure they are more accurate but they are mixing up precise esoteric terms with the 'generally understood' terms.

    People understand what the general term means in terms of their daily lives and for them "recession" is bad. What started in 2007 it wasn't "bad" for the ordinary Joe - in fact a recovery might have occurred and we'd never have known about it. Now that it's the 2 quarters of negative growth thing, it's a real recession.

    • ...of negative growth.

      Only one, the most recent, where the GDP shrank by 0.3% [bea.gov].

      The prior quarter GDP growth was 2.8%.

      We've only had one quarter of negative growth, and we only found out about that less than a month ago.

      See? All the constant doom and gloom talk [slashdot.org] works, doesn't it? Even someone who knows the accepted definition of a recession such as yourself thought we were in one.

  • but when these economists start retroactively applying the recession to previous time periods, thats just cruel and unusual punishment

    why do we tolerate these economists? why don't we just lock them in a dungeon somewhere? what did we ever do to them to make them hurt our economy so bad?

    maybe if some of us form a posse and tar and feather some economists these jerks will relent and make the economy good again

  • Monkey Economics (Score:5, Interesting)

    by Baldrson (78598) * on Tuesday December 02, 2008 @08:32AM (#25958379) Homepage Journal
    Monkeying with the key metrics -- like "unemployment" (ignoring those no longer actively seeking work) and "cost of living" under continual "revision" for political purposes since at least 1983 (when "cost of living" replaced house prices with "imputed rent") -- has left us without the information we need to realistically address economic policy.

    It's sort of like a junkie being asked diagnostic questions like "Where does it hurt?" by a doctor who is prescribing him opiates.

    • Re: (Score:3, Informative)

      by plague3106 (71849)

      Monkeying with the key metrics -- like "unemployment" (ignoring those no longer actively seeking work)

      Huh? Are you claiming we should count housewives as unemployed? Being unemployed is only a problem for those that would otherwise work.. but there are plenty of people that AREN'T going to be working. How exactly does including those people help us figure out how much untapped talent we have?

      • Re: (Score:3, Informative)

        by Baldrson (78598) *
        "Housewives"? Are you seriously suggesting that "housewives" make up a significant demographic group outside the 1950s or TV series fantasy? It has been a long time since only one income could reliably support middle class subsistence. Certainly there are plenty of people who aren't going to be working, but that is more a product of malinvestment than the few people who realistically have a choice to not work.
        • I don't think you know anyone with children. I have two small ones, and have a group of friends with small children. Lots of single income families. Sure they are married with 2 kids in a 2 bedroom condo, and they are driving used cars, but they get by on one income. The reality is, child care is expensive, and unless both earners have professional careers or a successful business, it's hard to net out ahead of child care costs. A 20k-25k second income, after the tax bite, and paying for childcare for

      • Re: (Score:3, Informative)

        by Artifakt (700173)

        I'm trying to find a polite way to say this.
        1. You just put a lot of words somebody didn't speak into their mouth, then debated that straw-man and not what they said. Frankly, you owe Baldrson (78598) an apology.
        2. The old metrics have been changed to deliberately lie to the general public. That's a fact, both that the rules the government uses to define 'unemployment', 'cost of living', 'inflation' and other factors have all been changed, and that the intent was to mislead people. (To verify the second poi

      • Re: (Score:3, Informative)

        by mysticgoat (582871)

        Prior to 1980, estimates of unemployment in the USA were developed from broadly based assessments, including reports of agencies that were running soup kitchens, developing census data, doing public health work, and so on. In the Reagan years, the procedure was tightened up: only those people who were demanding Unemployment Insurance benefits were counted as unemployed-- which was justified as being more accurate, but was actually adopted because it made for much better looking statistics. Persons who had e

    • Re: (Score:3, Informative)

      by FirstOne (193462)

      "Monkeying with the key metrics -- like "unemployment" (ignoring those no longer actively seeking work) and "cost of living" under continual "revision" for political purposes since at least 1983 (when "cost of living" replaced house prices with "imputed rent") -- has left us without the information we need to realistically address economic policy.

      It's sort of like a junkie being asked diagnostic questions like
      "Where does it hurt?" by a do

  • by Sj0 (472011) on Tuesday December 02, 2008 @08:35AM (#25958407) Homepage Journal

    Since the only growing industries seem to have been weapons and war, it's only natural that when you take the influence of government debt out of the picture, the economy has been shrinking for a long time.

    There are some people who think you can replace economic growth in the private sector with economic growth in the public sector and it's the same thing. That may be true in Soviet Russia, but in the free world, pork financed with debt is an inflationary measure that doesn't increase the actual size of the economy.

    What's worse, this 3.4% growth in the economy financed by debt is going to cause a cascade plunge. Right now we're like a family using debt to pay off debt (the growth in the national debt is equal to the money spent maintaining the current debt). What always happens in cases like these is the debt supply runs out, and the family goes bankrupt. If you think we're seeing hard times today, just wait. Paying back this 10 trillion is going to send the US back to the stone age by comparison.

  • by Ihlosi (895663) on Tuesday December 02, 2008 @08:44AM (#25958473)

    So they dropped triple-digit percentages? Did any of them drop more than 100%? I thought the whole point of shares was that you couldn't lose more than what your investment was?

  • by fuzzyfuzzyfungus (1223518) on Tuesday December 02, 2008 @08:49AM (#25958517) Journal
    So, I'm assuming that the outfit that decided that present conditions constitute "recession" rather than something else is working from publicly available information, not some super-secret oracle. In that case, why would the markets react to their giving a label to a set of phenomena that were already present(and thus presumably reacted to)?

    FFS you "rational actors", you'd better get your act together or I'm going to have to start paying attention to behavioral economists!
    • by Sj0 (472011) on Tuesday December 02, 2008 @09:51AM (#25959335) Homepage Journal

      What's good for a person and what's "good for the economy" are often completely at odds.

      According to politicians, the patriot will be completely overextended with debt, barely making all his or her payments, one paycheque away from oblivion.

      According to common sense, the non-idiot will try to have as little debt as possible, using it only for major capital expenses rather than trying to live off of it.

      According to politicians, the patriot will spend every penny, so the money he or she makes will have maximum exposure to the economy.

      According to common sense, the non-idiot will try to have savings, so if something happens they can just coast on savings until the crisis is averted.(Politicians hate that idea. How can they pander to people who aren't on the verge of collapse?)

      According to politicians, the patriot will buy a new laptop, car, and house TODAY using credit. They don't have to pay until 2011 anyway, so DO IT! DO IT NOW!

      According to common sense, buying things with cash will save considerable amounts of money. First, the interest accrued on debt never takes place. Second, the fees involved with taking out debt never take place. Third, it's easier to get deals and bargain with cash in hand resulting in lower prices.

      The rational actor is unpatriotic. Their actions are contrary to maximizing economic growth in the short term.

      On the other hand, my personal belief and experience is that debt works differently than economists think. It increases the volatility in the economy. Individual actors add massive amounts of money to the economy, but are suddenly extremely limited in their ability to participate in the economy.

      Consider two people: A person with debt, and a person without debt.

      The person with debt adds 10k to the economy by buying a new Toyota Yaris. The economy recieves his 10k. For the next year, as he pays back the debt, his ability to participate in the economy is reduced by $900/month, and he is effectively locked out of making any further contribution to the economy. The economy spikes in Q1, but is minimal in Q2, Q3, Q4.

      The person without debt doesn't buy that car, but is capable of spending $900/month on the economy. Economic output is constant in Q1, Q2, Q3, Q4.

      Now think about this: Many people have 50 year, $500,000 mortgages as a result of the housing bubble. With the economic spike done and over with, what remains?

  • by joeasian (1056578) on Tuesday December 02, 2008 @08:50AM (#25958525)
    - "We don't believe we're going to have a recession though." [Vice President Dick Cheney, 1/30/08 [whitehouse.gov]]
    - "I think the experts will tell you we're not in a recession." [President Bush, 2/10/08 [thinkprogress.org]]
    - "The answer is, I don't think we are in a recession right now." [Council of Economic Advisers Chairman Edward Lazear, 2/11/08 [whitehouse.gov]]
    - "First of all, we're not in a recession." [President Bush, 4/22/08 [thinkprogress.org]]
    - "The data are pretty clear that we are not in a recession." [Council of Economic Advisers Chairman Edward Lazear, 5/7/08 [wsj.com]]
    - "I don't think we are" in a recession. [Director of the National Economic Council Keith Hennesy, 6/3/08 [whitehouse.gov]]
    - "I think we have avoided a recession." [White House Budget Director Jim Nussle, 7/31/08 [marketwatch.com]]
    - "I don't think anybody could tell you right now if we're in a recession or not" [Dana Perino, 10/7/08 [thinkprogress.org]]
  • Recession? Meh. (Score:5, Insightful)

    by blcamp (211756) on Tuesday December 02, 2008 @08:53AM (#25958557) Homepage

    I refuse to participate in any recession.

    As long as I work and earn, I will save and spend just as I always did. My family's economy won't be dictated to by some namby-pamby report by a bunch of gloom and doom busybodies.

    Seriously.

    If you practice fiscal responsibility (something the U.S. government seems unwilling to do, hence the current mess), work hard and consistently, keep your skills updated and always marketable, you'll stay out of trouble... or at least be nimble enough to make whatever moves are necessary to get out of trouble very quickly.

    Some folks want to wail and gnash their teeth at the falling sky. Hey, whatever floats their boat.

    • Re:Recession? Meh. (Score:4, Insightful)

      by characterZer0 (138196) on Tuesday December 02, 2008 @09:20AM (#25958891)

      The whole problem is that a whole lot of people, from Wall Street bankers to low wage workers, have not been practicing fiscal responsibility, and show no inclination to start doing so.

    • Re:Recession? Meh. (Score:4, Insightful)

      by Abcd1234 (188840) on Tuesday December 02, 2008 @10:31AM (#25959935) Homepage

      Says the guy on a tech forum who probably has some sort of higher degree or otherwise advanced and specialized skillset. Meanwhile, the average Joe out there faces the real possibility of layoffs, and with a contracting job market, long-term unemployment on the horizon.

      *You* may not choose to participate in the recession, but there are millions who will likely have no choice in the matter.

    • Re:Recession? Meh. (Score:4, Insightful)

      by mysticgoat (582871) on Tuesday December 02, 2008 @12:30PM (#25961987) Homepage Journal

      A recession is not something you can refuse to participate in. You are participating in it.

      Your skills are now less saleable than they were 2 years ago. Even though you keep up. There are fewer employers out there who need your skills, and more qualified competition for your kind of work... and for the job you currently have. You need to worry about whether you have to run harder just to stay in place. Forget about that plan to ask for a raise next year. Correct your insolent behavior toward the administrative assistants, because you may have to stay with this job for a lot longer than you thought, and you might well need to have an AA do you a favor at some point.

      There are an increased number of poor people around you. Some of them are not nice, and many get less nice as they get more desperate. You are going to have to deal with that.

      With increasing poverty comes an increase in disease. If you have kids in public schools, you need to expect them to catch more colds this winter, because their classmates will be sicker more often. Your kids are at higher risk of strep throat, scarlet fever, infectious hepatitis, head lice, etc. Deal with it. Or deal with the cost of private schooling.

      You and your family will find shopping trips are less enjoyable. You have worries over whether the fruit you are putting in the shopping cart was just handled by that filthy bag lady down the aisle. Where you used to be cheered by happy, smiling faces, you now see worried frowns, depression, anxieties on the faces in the crowds. You've got to find ways to deal with your emotions when your S.O. or your kids are spoken to by some destitute spare change artist.

      There is less variety in the stores, because the stores cannot afford to stock as wide a range of items. There are fewer luxury items available.

      Some of these effects you can manage by moving into a gated community, buying an arsenal of personal defense weapons, planning outings and vacations so that you and your family are always well cushioned against the harsh realities of those who are directly hit by the recession... but all of that kind of crap is a response to the recession, isn't it?

      Recession means that your world has gotten suckier than it used to be. Deal with it.

    • Re: (Score:3, Interesting)

      by mpfife (655916)
      I used to think like you do - but I have realized to far too sad truth. We've rounded a moral hazard corner that is about to dramatically shape future policy.

      I also lived within my means. I was going to buy a house 2-3 years ago, but didn't because I saw the writing on the wall. I figured when the collapse came, I could buy a house at probably less than half of current prices. I saved and lived frugally and hoped to be rewarded for that foresight. But that hasn't happened.

      Instead, I now have over $2

  • Tin Foil Hat (Score:3, Interesting)

    by mlwmohawk (801821) on Tuesday December 02, 2008 @09:12AM (#25958777)

    Not to stir the conspiracy pot, but I find it odd that we've been in a recession for a year, but we only hear about it a month after an election. One could postulate that the administration worked very hard to keep this announcement quiet in order to not look worse.

    Up until a few months ago, the republicans have been saying the economy is strong and NOT in a recession. OK, so now they lose, and we find out the truth.

    It could be innocent timing, but given the record of this administration I suspect it was known for some time.

  • This is good news (Score:4, Interesting)

    by eclectic4 (665330) on Tuesday December 02, 2008 @09:45AM (#25959253)
    As many "experts" have explained, right about the time we finally admit to the recession it usually is the start of the recovery.
  • Predictions (Score:5, Funny)

    by darth dickinson (169021) on Tuesday December 02, 2008 @09:57AM (#25959403) Homepage
    The news media has accurately predicted 23 of the last 2 recessions.

Work without a vision is slavery, Vision without work is a pipe dream, But vision with work is the hope of the world.

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