Recession is here!

Our good friends at the National Bureau of Economic Research have made it official; the U. S. economy has been in recession since December 2007. For what it’s worth, the US.RECESSION.08 contract is up 5.5 points on this news, with the last trade occurring at 97.4. The contract rules define recession as constituting two consecutive quarters of negative GDP growth, and since this information has yet to be officially released by the government, it is still an actively traded contract.

Since we are nearly 1 year into this recession, this already qualifies as one of the longer recessions since the Great Depression. Apparently the longest one since then occurred 1973-1975 and lasted around 15 months. At this point, it would appear highly likely that we’ll be setting a new record with this recession. The “good” news is that the Intrade US.DEPRESSION.09 contract (which defines depression as a cumulative decline in GDP of more than 10.0% over four consecutive quarters) last traded at 13.6, which represents a 1.3 point drop on the day.

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2 thoughts on “Recession is here!”

  1. According to Keynes, the root cause of an economic downturns is an insufficient aggregate demand. When the total demand for goods and services declines, businesses throughout the economy see their sales fall off. Lower sales induce firms to cut back production and to lay off workers. Rising unemployment and declining profits further depress demand, leading to a feedback loop with a very unhappy ending.

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  2. 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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