DeQuadros with RDQ Economics an economist Sees 5% to 5.5% Drop in Fourth-Quarter Dresdner's Logan Sees 4.5% Drop in Fourth-Quarter Jan Hatzius, Goldman's senior economist, wrote in a research note to its clients on Friday that gross domestic product is shrinking by 5 percent on annual basis in the current quarter. Serious question : what is the U.S. definition of a "depression" ?
Suss, seriously........ 1) A recession occurs when your neighbor loses his job. A depression occurs when YOU lose your job. 2) A depression can be defined as a 10% or more decline in GDP. 3) A depression can be declared if and when UBS makes a buy-out offer for Goldman Sachs. 4) The end of a depression can be declared when those three economists mentioned above collectively declare that the world is on the verge of a depression.
All BS. A depression is defined by bread lines and food shortages. As long as we are eating, we have nothing to be depressed about. Mass unemployment leads to boredom. Its not my fault most people don't know what to do with their free time. End of story. (By the way, Look at walmart stock over the last few yrs. Doesn't look like a a depression to me. When we are in a depression, people have no money to buy things even at Walmart.)
A depression is defined by extremely high levels of unemployment-20%+.....and other factors of course.... but this would be the main necessary component.
-4% would be a more reasonable expectation. Why? If sales are down 4% and the idiotic measure you are using is 77% consumer spending, then it stands to reason that the overall number won't be too far from there. Why is consumer spending included, anyway? We should be concentrating on what we produce, not what people are willing to borrow to buy.
If GDP hits peak to through of -10% then its a nobrainer to say that the US is in a depression, but 5% annualized is less than 2% of actual GDP decline. roubini forecasts a -5% peak to through total decline