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Your Take: Is The Recession Over?

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Recession BusterEarlier this week, Ben Bernanke, Chairman of the Federal Reserve, said the recession was “very likely over” but that the unemployment rate would likely still go up. There’s a lot of talk about a “jobless” recovery, that is a recovery in which new jobs aren’t created, with the unemployment rate not falling back to the normal 5% for at least another four years. Bernanke specifically said that the recession was likely over from a technical perspective, which is to say that we’ll probably still feel like a recession even if we don’t have two consecutive quarters of negative GDP growth.

So I wanted to know from you – do you think the recession is over? It’s one thing to look at “statistics” and declare victory, it’s another to look people in the eye and tell them that the recession is over.

Personally, I think that you can throw technical out the window because regular people don’t really care. Until people stop being afraid they’ll lose their jobs because of the economy, the recession isn’t going to be over. There have been a lot of positive things about this recession – Americans are repaying debt and saving more, frugality has made a resurgence, and there’s been a greater emphasis on emergency funds.

So… is the recession over?

(Photo: arvindgrover)

{ 62 comments, please add your thoughts now! }

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62 Responses to “Your Take: Is The Recession Over?”

  1. Karen says:

    My husband lost his job over a year ago. He had been with the same company for 34 years and does not have a degree, so he’s basically been unhirable. For us, the recession will not be over until he is employed again.

  2. Anonymous says:

    There is no way that the recession is over,maybe it’s a matter of financial definitions that say if the economy does so & so for X amount of time that equals the recession is over.That is just semantics.Call it what you want our economy is almost totalled stalled and in many aspects in reverse. We have an unemployed, under-employed,or people who just aren’t counted like me of 16.7%.There are many millions of mortgages scheduled to reset and only 3% of those affected have renegotiated with their lenders.The United States is the greatest country in the world,but our is doing the only thing they can do to avoid a depression or very deep recession by any definition. And that is to print a ton of money to shore-up our economy in almost every sector.We all know that with each Americana’s share of the debt now being about $37,00.00 each ,that the laws of physics and economics says that for each action there is an equal and opposite reaction. We and our children and there’s will have to pay the bill.I do not the answer,and I have not heard of anyone that does,even though some people proclaim that the have,none have panned out.We have allot of hard work ahead of us.

  3. Tim says:

    @freeby50, the problem will be that we have 12% gdp debt, which will spike inflation sooner than later. if the recession is over, then the govt should stop doling out stimulus money. this is the concern I have. If the recession is over, then you don’t need the extra $700bn stimulus money projected to be spent over the next 2-5 years. However, this will never happen, the money will be spent, as well as additional money. inflation will take over and continue the recession

  4. The funny thing about recessions and good times is what people say before the event happens means more than the event. It triggers the event. When politicians start bad mouthing the economy thing actually get bad. Think about right about the time of the real estate banking problems. What happened? Politicians and news media started focusing on how bad things were. Then things got worse. Now we are seeing politicos talking up the economy. People will listen and the economy will improve. Watch it, it will.

    More importantly, is it over is how is your individual economy? I have had some of the best years during down economies and some of the worst during a economic boom (ie. unemployed during the 1980′s boom).

    So I urge everyone stop thinking about what “everyone” says and listen to your pocketbook. Some of the best values in can be found right now, if you have the money. So don’t wait for others to tell you the economy is good or bad. Go live your life.

  5. John says:

    All that is left to overcome is the fear. Once that is done; the decreased individual debt we have achieved and the pent up need will drive the economic recovery. All good enough. The challenge now is to decrease the free flow of funds in concert to the rise. Our economy is like a mighty river during a drought which now has the rain commencing and we must prevent flooding by control of our economic dam.

  6. Bob Weber says:

    I’m not sure I’m ready to say the recession is over, but I was joking with a client who runs and independent bookstore about this yesterday. She said she thought it was over, at least in her store. August and September have been very good for her.

    People may be saving and paying off debt, which would slow inflation, but as soon as everyone feels secure again, the saving will go on the back burner. We are a consumer driven society and Americans like to spend money. It’s taken a really big scare to slow that down, and everybody is ready to buy a new car, house, or TV as soon as they think they can afford it.

  7. Damon Day says:

    Nope,

    In my opinion we have several years to go before we can even finish clearing out the crap. I think that there are a lot more losses that these banks have been hiding.

    Plus, nobody is really talking about this but think about all of these people that have stopped paying or haven’t been paying their mortgages. Well normally they are writing off the interest, but now since they are not paying, they are going to be in for a surprise on how much they owe uncle sam. Also, many people are draining 401ks to get by. That is also going to add an additional tax burden with the penalty. I think the next big thing is all of these people that are in debt to the IRS. And we all know how friendly they are. Credit card debt is nothing next to owing those guys.

  8. Michael says:

    The recession is over! Who cares what the common American thinks about the recession. Just by taking the time to find this website and read any of it means you are way above average in financial intelligence. The local news in Oregon aired a story saying that minimum wage wasn’t going to go up because it was pegged to increase with the dollar cost index and since that went down by 1.5% it will remain unchanged. They didn’t connect the dots though and say that it means that people will have more purchasing power which is essentially a raise. At first I thought that was just the media distorting the truth when my wife pointed out that the way the story was presented the person who presented the story didn’t really understand. Any free cash beyond a six month emergency fund should be in the market. Do dollar cost averaging and invest broadly. Don’t listen to the media. Is inflation gonna hurt us, sure. But the house I own is a hedge against that and it’s value will artificially increase as will the market when the dollar decreases in value. Anyone keeping more than 6 months emergency fund in cash is going to be crying in five years when housing prices are up 20-30%, the market is at 15,000 and everyone finally agrees that the recession is over (and inflation will be high). For those still in cash it will be worth a lot less. Once the media and everyone agree on something then the opposite is usually true. Think about every bubble we have had. When everyone agrees that you can’t lose money in something, be it housing, stock market, foreign investments, gold, it means get out, take your profits and look for a smarter investment. Now is the time when I will make my fortune and maybe retire in ten years, at age forty.

  9. Funny, I just heard Dave Ramsey say the same thing on my local news this morning. He said the bottom was about 2 months ago but it will take a little while for the economy to catch up.

  10. Bradford says:

    Make me laugh, or cry one. Maybe one indicator might be when a one-year CD earns as much as a five-year does today. Don’t hold your breath or you’ll turn blue. As for the inflation hawks, who’ve been in a panic for years: I lived through real inflation, in the mid-1970s, and at least it’s a sign of life, not the rigor mortis of today. Reduce your expectations: then you won’t be disappointed.

  11. Greg says:

    Outside of the technical definition…

    What is, is. What you do with it is what matters.

    Like many others my income has been impacted, my investments were impacted. Nearly a year ago I came to the conclusion that we were in the new normal then took steps to take advantage of it. Investing more than ever.

  12. zapeta says:

    Technically, yes. But until there are some jobs the economy isn’t going to recover quickly.

  13. Darwin Benedict says:

    NO! to the question “Is the ression over?”
    I am still having to work part time since I stopped drawing on my retirement accounts. I can only earn so much per year till I reach full retirement age in another year. We have had to put our retirement plans on hold until the economy rebounds and people feel safe again about spending. We are having to draw on what little savings we have set back in the last five years.

  14. No. The data is improving, and we will not know for sure for months. Yet, it just ‘feels’ so bad out there.

    Who is buying? Who can keep the economy from shrinking? I don’t know the answer, but I fail to see how the economy can be growing.

  15. eric says:

    I don’t really think so…but of course I would love to be proven wrong.

  16. Matt Jabs says:

    No, I do not think it’s over.

  17. Viper says:

    Nope. You still going to have ARMs resetting thru 2011. Nobody is talking about commercial real estate. I heard from Bloomberg that about 7,000 small banks will fold by 2015 due to bad loans on commercial real estate. What about the credit card defaults? Oh, what about the deficit and the printing of money that is flying out of the window? Ben (NOSTRADAMUS) Bernanke is full of SH*T!

  18. Wayne says:

    As the saying goes “Recession is when your neighbor has lost their job and depression is when I lose my job’… While I am still working I know of a few individuals that have lost their jobs and there is still 8% unemployment here in Dallas. With excessive government spending, the government regulating mandatory loans to individuals that cannot afford the house purchased, excess executive pay (how can an individual sleep at night knowing their pay is at the expense of hundreds of individuals losing their jobs. Executives have stolen assets and have driven their company to bankrupt putting thousands out of work). And as stated in an earlier post, the biased media scaring individual into holding their money and not spending to keep the economy moving which would help create jobs.
    Is the Recession over, NO WAY not until we can get individuals back to work and the government to control spending.

    If I may on another topic, What I want from my Senator and Congressman(woman).
    *Initiate term limits for the Congress and Senate to 2 terms, max.
    *Discontinue their pension program.
    *Not Allow Congress or Senate to vote for their own raises.
    *Discontinue government paid Hhealth care for our Congress and Senate.
    *Make the Congress and Senate participate in the Social Security program.

    God Bless you and God Bless America.

  19. Regardless of what it is technically called, it is still a really bleak time for many many people.

  20. iNVESTRITE says:

    Plain and simple the effects are not disappearing

  21. JustMe says:

    I agree with Amber… The “so called” economic leaders had no clue that the financial meltdown was on the horizon. If they did they should have worked tirelessly to prevent it. I do not trust them now when they say the recession is over. They are just trying to “spin” some (false) positive feelings in all of us. We need to be positive so that spending increases, but at this point there are too many ominous signs still out there. I’m going to hold tight on what little I have.

  22. Shawanda says:

    I really can’t say I was impacted much by this recession. I only had one friend lose a job in the recent past, but it was due more to the founder of the company being a fraudster than a downturn in the economy. If I were to go by my own perception, there was no recession.

    So, is the recession over? It never started.

    • Andrew says:

      My wife and I both stayed employed, but the value of our real property and the value of our investments declined. Both are coming slowly back, and we didn’t panic and sell anything, but we definitely noticed the recession.

  23. Mark says:

    Sure it is over….because the depression just started. Take out government debt spending…

    Oh, also take out the financial industry. The fraud that is occurring by not making institutions mark-to-market is tremendous. Look at the failure of Colonial Bank. BB&T immediately marked down the value of their residential loans 37% and the value of their commercial loans even more. The lying will continue until it can’t.

  24. Chad says:

    This “recession” actually has been a good thing for me. I started to take control of my finances and started doing the right things with my money about the time the recession started (I started getting out of debt, and actually managing my money for the first time in my life instead of having it manage me.) So as this recession wore on, I began to financially prosper. I became debt free in Febuary of 2008, built a fully funded 6 month emergency fund and started investing in stock mutual funds about the time the stock market crash hit. I didnt plan to invest just because the market hit its lows, its just the way my personal plan worked out and happened to hit the investing stage at the right time.

    Early 2009 was the darkest period at work. We saw a drop in sales and everyone had hours cut, about half of us got laid off. I remember seeing people at work cry from the fear of losing thier job. Many went to 3 days a week, some of them 4 days a week. The place I worked for determined who had thier hours cut based on how valuable they were to the company. I focused on making the company dependant on me from the day i started back in 2006, knowing that if a slowdown ever came, I wanted to put myself in a position that even though they couldnt afford to keep me, they couldnt afford to lay me off either. But at the same time, I positioned myself financially for worst case scenario and would have been able to survive if I would have gotten laid off, so I didnt really worry to much about it. It’s been interesting to watch my savings grow and my net worth actually increase during this recession. its actually quadrupled over the last 33 months and has seen a steady increase, even tho my investments took a big hit early in the year.
    So yes, they keep telling me we we’re in a recession, but I never entered one.

  25. Alvis says:

    The Feds will say anything that will make them look good to the popalation at lsrge. Ask the ones that have no job and ones that have been cut to three days a week, and still more that are losing their jobs or will lose their jobs in the months to come.


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