A Recession, Oh Really?

We are getting close to a full year on the current recession which puts us past the average length and most would agree we’re still taking a beating.  Until jobs turn around AND housing stabilizes I don’t see us exiting this recession.  Even with all the stimulus packages that have been implemented we haven’t seen them pay off yet with a turn to the upside.  That being said, I believe that if we did not have the bailout package and the other side deals with banks, etc we would certainly be a lot lower now.

I think the situations surrounding our current recession are big enough to beat the post-war record of 16 months.  By how much I don’t know.  That means that we have at least four months of this to go and maybe a good bit more.  The big factor to keep in mind is that the markets will begin to recover well before the recession is officially deemed to be over.

A friend of mine likened a recession to a Godfather movie – sometimes the market needs a good cleaning out, a bloodletting to clean out the excess.  I like that analogy as much as I don’t like the pain we’re going through.  Too many companies and individuals (including stock and real estate investors and those who spend more than they make) got too far overcommitted with the mindset that this was easy with no consequence.  In the end, this will create another better market that keeps the ones who got too badly burned out of the market for years to come.  When we see them coming back into the markets in droves, we will hopefully know it’s our turn to get out before it goes bad again.  So, for now I don’t see a sustainable rally, but think it will start in 2009.