Recession Definition
All the markets moved sideways today, except bonds which lost value (increased interest rates) as the economic situation continues to deteriorate.
In the news today…..
Private Employers – laid off 371,000 workers in July. This was down from 463,000 in June. If you listen carefully to the news media, you would think this was a great result. We are coming out of the recession, and this is just one more indication. I beg to differ!!!! We are still laying off people. As long as we are laying off people, the economy is getting worse – no matter what people are saying. As long as total unemployment keeps rising – and it will according to the President – we are in a bad economy.
By the way, I bet you didn’t see it reported that future planned layoffs is an increasing figure. This means that companies (even as we come out of the recession??) are planning on cutting jobs to make their profit numbers.
Definition of Recession – is two quarters of negative GDP growth. What that means is when we get ONE quarter of positive GDP growth (even 0.1%), we are “officially” out of the recession. Have you ever wondered why it takes two quarters to be in a recession, and only one quarter to be out of it?? Well, the answer isn’t surprising – it’s all politics. The politicians prefer to look good, and not bad.
Because of this definition, I believe we will be “out” of the recession in the 3rd Q of 2009 – and at the same time we will have continuing increase in unemployment and falling house prices.
30 Year Mortgage Rate – is 5.17%. It fell last week, and is now at a place where you should seriously consider a refi if you are in that position. As the 10 Year Treasury continues its increase in interest rates – the mortgage interest rate will follow as sure as day follows night.
Here are the last numbers for today:
Dow Jones 30 Industrial – 9281 (down 39 points)
10 Year Treasury Bond – 3.76% (up 0.09%)
Euro – $1.4419
Gold – $966 (down $3)
Oil – $71.92 (up $0.55)
Gasoline $2.05 (down $0.01)
