A double-dip recession? "Simply out the question?" says Lakshman Achuthan of the Economic Cycle Research Institute (ECRI), whose Weekly Leading Index was on pace for its highest annualized growth rate in 38 years. Achuthan said the recovery is moving at the strongest pace the U.S. has seen since the early '80s.
I do not like when Social Scientists, let alone economists, (or any scientist for that matter) express forecasts in such absolutes, but the ECRI gets some benefit of the doubt until proven otherwise. Still, I will weight their work a little more but not with certainty!
U.S. double-dip recession out of the question: ECRI | Reuters.
BERK
I believe them, if only because they're predicting that this recession will end like most others. Although there's a balance-sheet component to this recession, the way to bet is to assume that the current one is going to be like the ones in the past. [Use the base case, to put it in succinct but technical terms.]
Every U.S. recession has been different in some respect, but they usually end the same way. This one might be different, but so might have the other ones. The only exception was the first leg of the Great Depression, which accompanied an effectively liquidated banking system and scarred (not to mention scared) capital suppliers. The first condition does not obtain, as there has not been thousands of bank failures, and the second doesn't seem to either: credit markets are opening up. Consequently, this recovery will not be like the mid 1930s.
Posted by: Daniel M. Ryan | August 30, 2009 at 01:32 AM