Tuesday, September 21, 2010

The Recession has been over since last June. More media deceptions.

Economists have declared the recession has been over since June of 2009. Gee, I think the markets didn't get the memo. Often times, definitions are hard to properly word. If you like prime examples, just pick up a Calculus book. One of those definitions that seems to be hard to word is the term Recession. It's much like defining pornography. Nobody can word it, but they know it when they see it. Well, it seems the wording defining a recession is going to need some fine tuning because if anyone believes the recession is over, much less ended in 2009 is either stupid, crazy, or financially "secured" for life because of those of us that work for a living, the recession isn't just alive and well, it's getting a lot worse.

A recession is defined as a loss in the GDP for 2 straight quarters. So if one can make a gain, however small or insufficent, you can claim the recession over. This can be deceptive as this is exactly what this is: a deception to make Obama look better than he really is. Last June does anyone know of two programs that were making headlines? Well, to refresh those memory that are stale, they were the Cash for Clunkers and the ending of the First Time Home Buyer Credit. These two programs didn't really reflect any real gains in the GDP. It just deferred a lot of sales to this earlier date. Those that were planning to buy later just bought cars and houses earlier to take advantage of a temporary benefit. In the end, nothing changed as unemployment went up and the GDP went down again. These programs were design as such to give this Administration a means of saying things are better with them when it isn't. Job losses continued til recently and most of the gains now are government jobs, not the private sector. Such bad definitions can lead to misleading conclusions, and anyone that's trying to find work and buy just the basics right now can tell you, the recession is far from over and we're likely in a soft depression and no smoke and mirror program can't smoke screen that reality.

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