Monday, 04 Oct 2010 07:08 AM
By: Dan Weil
The National Bureau of Economic Research, the official
arbiter of recession dates, marked June 2009 as the end of the
Great Recession.
With economic growth sliding to 1.6 percent in the second
quarter and the jobless rate remaining at 9.6 percent, many say
the recession continues.
Warren Buffett
Perhaps the most respected of those who say the recession hasn’t
ended is Warren Buffett. "On any common sense definition, the
average American is below where he was before in terms of real
income, GDP,” the investment legend told CNBC.
“We're still in a recession. And we're not going to be out of it
for a while, but we will get out of it. We've used up a lot of
bullets. And we talk about stimulus. But the truth is we're
running a federal deficit that's 9 percent of GDP. That is as
stimulative as all get out.”
Nouriel Roubini
Star economist Nouriel Roubini also says we haven’t exited hard
times. "The big risk is that there will be a downturn in markets
that could impact the bond, the equity and the credit markets,”
he told CNBC.
“There is no private sector job growth. Consumption is weak,
exports are weak and housing is weak. If there is no final sales
and no final demand, companies will not invest. We have to
expect the new normal. We do not need a double dip for it to
feel like recession."
Robert Shiller
Yale economist Robert Shiller is another bear. He sees a sizable
chance of a double-dip recession, as the economy struggles to
emerge from the credit crisis and the housing industry continues
to sag.
We may have seven years of “bad times” ahead of us, he wrote in
a commentary for the Project Syndicate web site.
“If you allow a financial market to spin wildly until it breaks
down, it really does seem that you run the risk of years of
economic malaise. That is the historical pattern.”
Jobs are the big issue, Shiller tells CNBC. “We haven’t been
focused enough on the unemployment rate.”
David Rosenberg
Some experts say “Great Recession” is the wrong term in the
first place. They argue that we’re now in a depression. Gluskin
Sheff chief economist David Rosenberg is one of them.
“(We’re in) a depression, and not just some garden-variety
recession," he wrote in a commentary obtained by CNBC.
The stock market’s recent rally may argue against a downturn.
But Rosenberg sees it differently.
"Such is human nature, and nobody can be blamed for trying to be
optimistic. However, in the money management business, we have a
fiduciary responsibility to be as realistic as possible about
the outlook for the economy and the market at all times," he
wrote.
Robert Prechter
Market guru Robert Prechter, president of Elliott Wave, agrees
with Rosenberg. “Economists have something very wrong,” he told
CNBC.
“They are talking about a Great Recession and that it’s over. I
think they’re wrong on both counts. What we have is a partial
recovery in an ongoing depression.”
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