Happy Birthday, Recession!

Wednesday, October 22, 2008 | 02:47 PM

Floyd Norris asks, "First Birthday for the Recession?"   

"The National Bureau of Economic Research has yet to certify there is a recession, but otherwise there is no doubt.

The Conference Board released its index of coincident indicators. That index not only confirmed that a recession is under way, but it provided powerful evidence that it began in 2007, or in January 2008 at the latest.

Here’s why: The overall index of coincident indicators is down 1.2 percent from its record high, set in October 2007. Since 1960, every time the index has fallen by at least 1 percent, the bureau later concluded the economy was in recession . . .

In the seven recessions since 1960 — the only ones during which the index of coincident indicators was calculated — the bureau later concluded that the recession began within two months of the beginning of the decline in the coincident indicators. This time the index began to decline in November 2007. So the possible range is from September to January.

In all likelihood, this recession either has reached its first birthday or will soon do so."

I do not disagree with either Floyd or the coincident indicators.

On a partially related note, thank you to the many birthday wishes I have received from so many of you -- your thoughtful notes and generosity have been greatly appreciated.

>

Sources:
First Birthday for the Recession?
Floyd Norris, High and Low Finance, October 20, 2008, 1:49 pm
http://norris.blogs.nytimes.com/2008/10/20/first-birthday-for-the-recession/

Recession Fears Sink Europe Stocks
ANDREA TRYPHONIDES
WSJ, OCTOBER 22, 2008, 12:03 P.M. ET
http://online.wsj.com/article/SB122466136246057925.html

Wednesday, October 22, 2008 | 02:47 PM | Permalink | Comments (38) | TrackBack (0)
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Comments

Interesting, recession finally widely acknowledged (even among economists), market down 45% from highs, sentiment miserable.

Were do we go from here?

Posted by: Mike M | Oct 22, 2008 3:08:56 PM

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