National Bureau of Economic Research: 28-Mos US Recession Ongoing

Some economist experts laid down the measures of recessions a long time ago and when the signs start to show a recovered market then the measures are frowned on.  In fact its best to say well it looks like the recessions over and its time to invest. Its time to hype the recessions over, hype can create recessions and make them worst by 5 fold and hype can create the required investment to create jobs and mend the global economy.

Each time someone writes a gloomy report it effects the natural recovery and if hyped creates a trough. Pretty damn stupid at a time we need a boost.

The above story was initially posted on Now Public verbatim:

Economists at the National Bureau of Economic Research (NBER) announced on Monday that they couldn't ascertain whether the recession is over or not in spite of positive economic signs.

The NBER Business Cycle Dating Committee, which is headquartered in Cambridge Massachusetts and has seven active members, provides the official word as to the beginning and end of U.S. recessions. The committee members are certain that the current U.S. recession, which has lasted longer than any recession since the Great Depression, began in Dec. 2007.

The Business Cycle Dating Committee defines the end of an economic contraction and the beginning of an expansion as a "trough".

On Monday, the committee announced on the NBER Web site: "Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature."

A recession is defined as two consecutive quarters of economic contraction.

Gross domestic product (GDP), which is defined as goods and services produced by labor and property within the U.S. is the broadest measure of economic activity. However there are many other economic factors such as unemployment, personal income, and industrial production that are taken into account by the NBER Business Cycle Dating Committee in determining "trough" dates.

The GDP made a 5.6 percent annual rise in the last quarter of 2009 up 2.2 percent from the third quarter.

However real disposable personal income (DPI) was flat in February after it's 4 percent drop in January. Personal saving which has a 12 month average of 4 percent was only 0.3 percent in February and real consumer spending was up only 0.3 percent in February. About 70 percent or more of the U.S. economy is consumer driven.

The U.S. unemployment rate has remained at 9.7 percent for three consecutive months.

44 percent of those unemployed in the U.S. have been unemployed for 27 weeks or longer. There are now 15 million Americans unemployed and the average duration of unemployment is currently 31 weeks. 

From the New York Times: 

'It seems nearly certain that the present recession will end up lasting longer than the 16-month recessions of 1973-75 and 1981-82. They had been the longest downturns since the 43-month period from 1929 to 1933 that was the first phase of the Great Depression.'

I would argue that one of the most significant factors stalling economic recovery is the inability of legislators to come up with meaningful reform of the financial industry. In order for a market oriented economy to function with a net benefit to society at large, the ability to assess risk is paramount.

Recent revelations about the collapse of Lehman Bros.  

Report Shows How, Collapsing, Lehman Hid Woes

revealed that Lehman Bros. and the likes of Citi Bank, JP Morgan and Bank of America were engaged in transferring large liabilities in the form of "toxic assets" to companies that the parties had a stake in. In the case of Lehman, 50 billion in questionable assets were "sold" short term, to make the balance sheet look healthier than reality would otherwise indicate. Not disclosing these questionable transactions, would not give investors enough information to adequately assess the risk of Lehman Brothers. This is but one example of the way business is conducted on Wall Street today.

Without transparency, meaningful regulatory oversight, and strong penalties for breaking the rules (and I'm not talking monetary penalties), we are going to see business as usual. And guess who is going to pay for the economic damage that will surely come at some point down the road?