haha
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Economic View - Fear of a Double-Dip Recession Could Cause One - NYTimes.com
Just call me Pollyanna.
Ha
Just call me Pollyanna.
Ha
I think most folks would consider a double dip when the second dip happens soon after the first recovery. Shiller's definition is so loose he's bound to be right. ECRI has been saying this since the middle of last year.I use a definition of a double-dip recession that doesn’t emphasize the short term. Instead, I see it as beginning with a recession in which unemployment rises to a high level and then falls at a disappointingly slow rate. Before employment returns to normal, there is a second recession. As long as economic recovery isn’t complete, that’s a double-dip recession, even if there are years between the declines.
Is he saying the market is expensive but we should still be be buying on the dip.Since 1989, I have been compiling the Buy-on-Dips Stock Market Confidence Index, now produced by the Yale School of Management. It shows that confidence to buy on market dips has been declining steadily for individual investors since 2009. (The measure is holding steady for institutional investors.) Will individuals continue to support the market, which is now highly priced?
Confidence indexes and other measures of public thinking show gradual trends, often over years, that don’t match up precisely with economic events, which are often sudden. We need to look at short-run events, like the market reaction to the Greek bailout, as no more than side effects. Slowly moving changes in our animal spirits represent the real risk of a double-dip recession.
I think most folks would consider a double dip when the second dip happens soon after the first recovery. Shiller's definition is so loose he's bound to be right. ECRI has been saying this since the middle of last year.
This was interesting
Is he saying the market is expensive but we should still be be buying on the dip.
In fact, there is still a real risk of a double-dip recession, though it can’t be quantified by the statistical models that economists use for forecasts. Instead, the danger stems from the weakness and vulnerability of confidence — whose decline could bring markets down, further stress balance sheets and cause cuts in consumption, investment and local government expenditures.
Many negative factors persisted between those dips. High among them was a widespread sense then that something was amiss with the economy. There was a feeling of uncertainty that discouraged entrepreneurship, lending and spending, and most important, hiring.
We have to deal with a similar — though less extreme — problem today. Many of us are unsettled by images that are preventing a return to normal confidence — images of rioting in Athens, or of baffled American traders during the nearly 10 percent drop in the stock market on May 6. And if the BP oil spill is not soon contained, and eventually wreaks havoc on the gulf economy, we may need to add it to the list, too.
ECRI has been specifically saying NO double dip. Or at least as far out as they can model.I think most folks would consider a double dip when the second dip happens soon after the first recovery. Shiller's definition is so loose he's bound to be right. ECRI has been saying this since the middle of last year.
This was interesting
Is he saying the market is expensive but we should still be be buying on the dip.
I think most folks would consider a double dip when the second dip happens soon after the first recovery. Shiller's definition is so loose he's bound to be right. ECRI has been saying this since the middle of last year.
This was interesting
Is he saying the market is expensive but we should still be be buying on the dip.
If the Dow dropped 3% tomorrow, I would guess that the day after tomorrow the Dow would:
1. Increase. Give percent:___________
2. Decrease. Give percent:___________
3. Stay the same.
4. No opinion.
The Buy-On-Dips Confidence Index is the number of respondents who choose 1 (increase) as a percent of those who chose 1, 2 or 3. This question was never changed over the twelve years.
I think most folks would consider a double dip when the second dip happens soon after the first recovery. Shiller's definition is so loose he's bound to be right.
Perhaps not. But if you remove social insurance from the equation and look at the "real" unemployment and underemployment rate instead of the ones quoted by the government, I suspect we're a fair bit closer to that 1933-37 labor market than many realize.The labor market isn't nearly as bad as it was in 1933-1937, the last period of economic expansion sandwiched between two recessions (aka the Great Depression).
It may be that in postwar times the US has never had a recovery without an employment recovery. He does give the precendent in the 1930s. To me the situation and the history is important, not the name. I am not enough of a historian to know, but this would make it different from all prior recoveries. I suppose you could call this situation wahtever you wanted, but Shiller has decided to call it a coulble dip and he explains why.I think most folks would consider a double dip when the second dip happens soon after the first recovery. Shiller's definition is so loose he's bound to be right. ECRI has been saying this since the middle of last year.
I don't read it that way. His writing is desriptive, not prescriptive.Is he saying the market is expensive but we should still be be buying on the dip.
Perhaps not. But if you remove social insurance from the equation and look at the "real" unemployment and underemployment rate instead of the ones quoted by the government, I suspect we're a fair bit closer to that 1933-37 labor market than many realize.
A recession, then a recovery with economic growth and growth in employment but where employment does not “return to normal” (Shiller’s term) followed by a recession years later – for me that is a growth – recession – growth – recession business cycle. (IMHO)I think Shiller's definition is more likely right than yours. Otherwise the double dip of the Great D wouldn't be one, since they were 4+ years apart. And I think "most folks" would call that the perfect example of a double dip. I don't think that his definition is loose at all. Tying it to unemployment levels gives a very tight requirement that shows the impact of the economy on people. When unemployment hasn't recovered, a bull market doesn't help much.
I know. You and I have discussed ECRI before and we share similar views regarding the value of their data and projections. They have been saying the economy recovers strongly, employment shows two distinct trends with one group recovering strongly to previous levels and another large group of long-term unemployed. ECRI is clear that the business cycle turned positive (i.e. the economy recovered) and someday it will turn down again and employment will not rise to previous levels before that happens. That would be a new change in the business cycle and is definition I share.ECRI has been specifically saying NO double dip. Or at least as far out as they can model
Not semantics. There are apparently two separate and distinct employment trends underway in the US. One is very positive and one is quite negative.It may be that in postwar times the US has never had a recovery without an employment recovery. He does give the precedent in the 1930s. To me the situation and the history is important, not the name. I am not enough of a historian to know, but this would make it different from all prior recoveries. I suppose you could call this situation whatever you wanted, but Shiller has decided to call it a double dip and he explains why.
Agree. Many in this group of “long term unemployed” may never see a decent job again unless our public representatives take a different approach. I’m not holding my breath.Perhaps not. But if you remove social insurance from the equation and look at the "real" unemployment and underemployment rate instead of the ones quoted by the government, I suspect we're a fair bit closer to that 1933-37 labor market than many realize
His use of the term “return to normal” is too loose for me.
Very steep (= high rate of job loss) entering the economic downturn. Less steep on the recovery (= lower rate of job growth).
Where did the graph go??
Yes, reading the OP and your reply again I see where I got confused. Shiller calling such a thing a "double dip" seems silly to me. ECRI sees shortening of the business cycle/more frequent recessions. To me this just seems like things returning to the way they were before the 80s and 90s.I know. You and I have discussed ECRI before and we share similar views regarding the value of their data and projections. They have been saying the economy recovers strongly, employment shows two distinct trends with one group recovering strongly to previous levels and another large group of long-term unemployed. ECRI is clear that the business cycle turned positive (i.e. the economy recovered) and someday it will turn down again and employment will not rise to previous levels before that happens. That would be a new change in the business cycle and is definition I share.