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Steve_A's avatar

Are we in a double dip recession or is it just slow growth?

Asked by Steve_A (5130points) September 5th, 2010

The IBD I read yesterday declared that it was not a double dip recession, just slow growth.

They also stated that it would take close to 7 years for jobs to come back to a more stable and “average” unemployment rate.

What is your view on this?
Agree or disagree?
Can you explain to me why?

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14 Answers

JLeslie's avatar

My vote is slow growth, and the growth is not a perfectly straight line on the way up, it zigs and zags a little, you have to look at overall trends.

Steve_A's avatar

@JLeslie I think I will agree unless someone can show me information to state otherwise.

Do you think value investors will be on the rise and possibly help?

marinelife's avatar

I think this is just a period of very slow growth. A lot of corporations are sitting on huge cash reserves out of fear.

I think it will take less than seven years for a return to more robust times.

Steve_A's avatar

@marinelife Good point, remembering reading somewhere that I believe if I remember right that major corporations are sitting on around almost a trillion dollars from slashing costs, laying people off , and anything else in general.

Supposedly one(more probably?) of the economic advisors that was once with Obama can’t remember her name, under estimated the back lash of the first recession and how hard companies would cut back.

They said unemployment would be 8% at the most, it is now 9.5% if I’m not mistaken?

JLeslie's avatar

@Steve_A You know, it seems really tricky this time, I still feel like people are hesitant to invest. I think there is a chance for larger business to be buying up smaller business in the same industry if their stock is very undervalued, because they have a real pulse on that industry. Like banks still buying up banks, things like that. I would guess very sophisticated investors will be buying stocks again, but if I remember correctly September October are generally the time of year the market dips, so we may see more investing mid October if the market still feels we are on the upswing.

The average guy investing in the market, I think he is still hesitant. I think many people were investing in the market and in real estate the early part of our new century because they felt like they couldn’t lose, and now they just had a big reminder you can. But, our memories are short, when the dot coms fell apart, people seemed to quickly come back and invest a few years later.

I think it will be sooner than 7 years. It think within the next 2 years we will feel wealthier and have much lower unemployment. I think real estate will start moving again in most markets in about 2 years, but is not going to increase in value much.

JLeslie's avatar

By the way my predictions are mostly based on guessing. Lol. I haven’t been listening to any particular experts.

Steve_A's avatar

@JLeslie I’d say you have a good view there people are certainly looking for other places to put there money I will quote something from a question I asked not too long ago.

Check these quotes that I read and put up.

http://www.fluther.com/94500/investors-shift-from-stocks-to-bonds-what-does-this-mean/

September and October do tend to be slower.The airport(mine anyways) is feeling it for sure.

BarnacleBill's avatar

Economic recovery is predicated on market confidence. Will the consumer spend? Until the American consumer’s relationship with debt is stabilized, recovery will be slow going. During the Bush years, we had too many people purchasing things that were out of scope with their income. As people are tightening their belts, the economy will be sluggish. Until the relationship with spending is brought into line, and household budgets have have a chance to recover, economic recovery will be slower, and unemployment will continue.

Credit cards are tightening up available limits, which a good thing. As a country if we are serious about change, a key thing that has yet to happen is to look at student debt and restructure it. We need better educated young people to push the economy forward. Education should not come at the cost of economic enslavement of a generation.

Steve_A's avatar

This is somewhat off topic but why do I keep reading retail is doing good and sales seem to keeping be up generally speaking?

Steve_A's avatar

@BarnacleBill I think the money is just going to take awhile as you said for people to have to spend on things and be able to do what they once did, but for now are compensating in other places and things.

Have you seen how well Dollar Tree is doing look at their past 2 years and entire chart.
http://www.google.com/finance?q=dollar%20tree&um=1&ie=UTF-8&sa=N&hl=en&tab=we
To me people are just spending money if different and it is hurting other places that are use to X amount of business and money.

I wouldn’t be surprised when the economy does get better to see a place like Dollar Tree go back down in price and growth.

Also I am being slightly biased as they are in IBD’s top 100.

Just my opinion anyways.

laureth's avatar

The National Bureau of Economic Research is the definitive authority in the U.S. where one can find the official start and end dates for economic cycles (including recessions).

You can see those dates here.

The current recession started in December 2007, and has not ended. Officially, they can’t declare a beginning or end to an economic period until 6–18 months after the start or end date, because these things are revealed mostly in hindsight by studying the economic numbers.

Steve_A's avatar

@laureth How do they decide when it has ended?

Since the 6–18 months have passed since that date.

laureth's avatar

By “6–18 months after,” I mean that if the recession ended yesterday (for example), they would see that in the numbers and be able to report the end as being yesterday in about 6–18 months, not 6–18 months after the beginning date of the recession.

Their official answer is here.

ETpro's avatar

Technically, a recession is marked by 2 straight quarters of GDP contraction. Since we have not seen even one such quarter since the 2007 start bottomed out in early 2009, no, we are not in a double-dip yet. If we elect Republicans to control of congress and end up with government gridlock,because Obama won’t sign into law what Republicans want to do, then we will almost certainly see a double-dip recession.

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