Wikinvest Wire

As predicted, recession began in Q4-2007

Monday, December 01, 2008

More than a few prognostications have ultimately proved to be wide of the mark around here over the last year, but it looks as though this almost two-year old prediction of the start of the current recession was spot-on.

Recall these words from January 1st 2007:

7. Economic Growth will Slow, Consumption will Continue

There are still trillions of dollars of home equity that haven't been spent yet and much of it will be spent in 2007. Unfortunately, much of this will be in the form of reverse mortgages for senior citizens, in order to make ends meet.

As for the younger crowd and their home equity, eventually it will be like millions of alcoholics at closing time, "Sir, the bar is closed. We can not serve you any more drinks. Please go home." Homeowners will spend their home equity until they can't anymore, which won't happen in 2007.

Economic growth will continue to slow, coming in just below 2 percent for the year with a recession starting in the fourth quarter.
MarketWatch reports that the NBER (National Bureau of Economic Analysis) has now made the official determination that the recession started in December of 2007.


Ted S. said...

sometimes I wonder if they are intentionally late in the call and then err on the side of calling it early so people will think it's almost over when they actually make the announcement....... even if it's a two year recession, we are about half done now -- that means people should be buying stocks......

Anonymous said...

What are the predictions for the timeline of a recovery? Actually I suppose that depends on the definition of a recovery.

Tim said...

Dunno. Most people are expecting this one to be longer than the eight month average duration, so, officially it may end by the middle of next year. But, recall that the last recession "officially" ended in late-2001, yet job losses continued and stocks didn't bottom for another year (late-2002/early-2003).

Mberenis said...

The recession isn't always a bad thing! Most people don't realize how much money there is out there. During economic times like this, there is more money to be had than ever. Because of the bailouts and economy, lenders are bending over backwards to bail you out too. Believe it or not, there is people getting tons of cheap money nowdays to start businesses, buy homes, pay off debt, and more. Profit from Recession

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