Is the recession over?

Question

What are you seeing?

http://finance.yahoo.com/news/Economy-grows-in-3Q-signals-apf-3242332094.html?x=0&sec=topStories&pos=main&asset=&ccode=

Vikram C. · Answer

Michael, there are many ways to short the market.  One easy way is to buy a put option.  You can do it on a company that you think is overvalued or on an index.  Although I agree with you that the market is overbought, you need to be aware that it is hard to predict short-term movements in the market.  Options expire and your puts could expire worthless.

But you have so many options with options.  For example, you could buy out-of-the-money puts to reduce your costs and invest only a portion of your capital in each expiration.  You could also do a spread, where you sell a short-dated put and buy a longer-dated one.  Some hedge funds do something called a long-short strategy which is somewhat less risky but requires a bit of analysis.

Brian Levredge · Answer

We are nowhere near close to being out of the woods yet.  Unemployment is high and will continue to climb through the rest of the year.  The Fed has greatly increased the money supply while at the same time monetizing our debt in a deliberate way to keep interest rates low.  There was no backbone to the growth we just had in the last quarter.  How long can we keep paying people 8k to buy homes?  Add to all of this that we have a whole new wave of bad loans that will be resetting/recasting starting next year and it looks pretty bleak.  There are still a ton of good opportunities though.

Rich Weese · Answer

If putting a bandaid on a compound fracture is an adaquate improvement, then the recession is over!!
     What do i mean? As the article stated the increase to 3.5% was caused primarily by freebies or subsidies in the auto and housing segments. Without those, big trouble. The govt is sliding down a slippery slope. What happens to these 2 industries when the freebies stop? Thaen we'll see the real results and status of our economy. Recession is no where near over, imo. Rich , leaving cancun soon.

Lance H. · Answer

Hey P NW, not trying to step on your toes here, but I believe J Scott has an MBA and I'm sure a very thourough understanding of economics.  He was just trying to emphasize what everyday people are fealing, and they could care less what the economic textbooks are saying, they have less money than they did before.

J Scott · Answer

So, regardless of what the media is telling people, the emotional impact of "losing" 50% of your net worth (even on paper) is enough to keep people from spending.
          
          Not to mention unemployment...people losing their jobs is about as real as it gets when it comes to money no longer "being there"...

Michael P. · Answer

I am young and don't have the benefit of life to tell me if we are in a recession.  However I will say everything I look at tells me things are about to get worse.

I think the market is going to go way lower.  How does it currently make sense at 10k?  8k?  I predict even lower.  I am only basing this on nothing more than a hunch.

I think the housing market is going to get worse.  I am so thankful I don't own any property other than my personal house.  I am in the process of selling that as well and hope it does indeed close.  I am so happy I will be 100% cash.

I study MLS on almost a daily basis.  I am seeing the lowest amount of foreclosures on the market in my 4 year period of studying the mls(And not by just a few %.  I am talking about 50% lower than normal standards).  Does that make sense to you?  It doesn't to me. The research I have done tells me that the banks are holding onto their foreclosures and releasing them slowly onto the market.  They are also waiting longer to foreclose so they can claim the house as assets.  The banks if they wanted to could completely annihilate the housing market.  As stupid as the banks have been lately I don't think they are that stupid as to release all their inventory in one fell swoop.

Unemployment is insanely high.  Almost every single one of my friends seems broke right now.  Most have been laid off or are underemployed.  I think the new % was 17% of people are underemployed right now with a 10% unemployment.  That is bad and doesn't seem to be improving.  I look around and I don't see anyone happy.  Things just seem really tuff for everyone these days.

So yeah I think worse times are ahead.

On a side note:  Does anyone know how I can short the market?  I would prefer the use of options or something risky so if I am correct in my prediction I will turn a little into a lot.  3-5k investment.

Account Closed · Answer

J Scott, may I politely suggest that you go over to your local junior college and take a couple of semesters of Economics.

Account Closed · Answer

The recession isn't over here, yet.

On the other hand, we didn't have a recession here until the press started screaming about doom and gloom, and people looked around and decided they should be more cautious and stop spending.

Recession is simply money not circulating. The money is still all there. It didn't self-destruct in a poof of smoke. So perhaps if the press starts crowing about how the recession is over, people will relax and money will start to circulate again. A self-fulfilling profesy.

Jeff Tumbarello · Answer

Choose your life's outcome when all around you are worried about buying in a downturn - wait with the lemmings or swim with the salmon.

Both types die at the end of their stories, but salmon get to die tired, and after breeding...

Never in history has a penny been truly "lost" - whoever loses control of their money just can't get it back from the person who found it.

Michael Rossi · Answer

Yes, the recession is over and the DEPRESSION is ready to begin.  This video explains why!

http://www.youtube.com/watch?v=t_ahFTYeif0

Is the recession over?

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