NYT:KRUGMAN: "Memory Lane" Sobering Graph of Home Sales vs. Recessionary Cycles

[El Pinko]

http://krugman.blogs.nytimes.com/2008/01/29/memory-lane/

The Conscience of a Liberal
Paul Krugman

January 29, 2008, 11:42 am
Memory lane
Remember when those of us who argued that the United States was in the midst of a serious housing bubble were ridiculed, and told that we were simply motivated by irrational Bush-hatred? Ah, memories.




:scared:

[Lasher]

1. Not very comforting.

Good graph. :thumbsup:

[leftchick]

2. why no shaded area

for the start of the 2007 recession?

[lapfog_1]

4. Not official yet.

We never know that we are in a recession until we are well into it. At least 6 months (by definition). And with the ways the definition has been jimmied with, possibly more than a year passes before our "economists" recognize we are in an official recession.

Most of the rest of us have it figured out a long time ago.

[El Pinko]

5. "Technically" we're not in recession yet.

It's a fait acompli that we will be in one, but economists define a recession as back-to-back quarters of less than 2% GDP growth. Very few would argue that it's pretty much a given, but it's not official at this point.

[MannyGoldstein]

6. 2% Growth? Or Negative Growth?

I thought it was negative growth.

[El Pinko]

8. YOu're right, 2 quarters of negative growth - my bad.

Here's a good encapsulation of the definition of a recession.

http://economics.about.com/cs/businesscycles/a/depressions.htm

I don't know where that 2% came from - must have heard it somewhere...

[bluerum]

7. If you give out money that you don't have so that people can spend it

to s(t)imulate economic growth and jigger the numbers, does that count?

The economic policies of the bush mis-administration are nothing but a one way road to a dead end. It is just a matter of time before the grim reaper knocks on the door.

[lapfog_1]

3. The more the difference between the previous high and the

recessionary low, the longer the recession.

This one is going to be a huge difference.

Yikes. 4 to 5 year recession? That would make it a depression? No? Especially if the currency becomes worthless (hyper inflation due to current dollar weakness and pressure for the central banks to keep lending, drawing on US Treasury to do so... which must increase the money supply, and since they won't be able to do so by floating more debt, they will get it by "inventing" more money). Just to keep the plates spinning.

Thanks, George.

Can we say Gold $2000/ounce by a year or two? Real Estate will no longer be an anti-inflationary hedge as the market corrects and sheds about 1/3 of the value (from the highs) for the homeowner. People will look for anything that holds it's value. Not to mention that if the Fed raises rates anytime soon, it would send the markets crashing worse than anything we have ever seen. So you can forget the so-called soft landing scenarios.

Crap.