WTF - Economics

This one is for all of us "average Joe" Americans who are unsure about what's happening. Are we in a recession?

The Idiot in Chief refuses to use the word recession, but did admit that we are in a tough period. The talking heads & doom-sayers have been yelling recession to anyone who will put them on TV. What gives? Here are the facts.

A recession is defined as 2 or more quarters of decline in the GDP (Gross Domestic Product) in a year. Quarterly reports come out 1-2 months after the quarter is over. We are in the first quarter of 2008 and indications are not looking great, but we are not yet, statistically speaking, in a recession. The fourth quarter of 2007 saw GDP growth of 0.6% (annualized.) While it might suck, it's still not a decline. It was the weakest quarter of the year, but the economy still grew overall.

Yesterday's Bear Sterns bombshell was bad. I mean, it was really bad. The good news is that the Stock Market was "flat" for the week. Was it an ugly week? Yes. Did your portfolio take a hit? Probably not.

What does this mean? I'm no expert, but that rainy day your Dad told you to save for...well I see rain coming. How bad? I think Robert Reich is on target. We're going to be hit with a major correction. Real people are going to feel the pain of it. We're going to have to stop living on credit.

Will there be a recession? That's for the markets to decide.