Saturday, January 5, 2008

The most widely publicised recession ever?

There seems to be a growing sentiment that we can't be entering a recession because it is just to publicised and that's not how recessions happen. I've got a few comments on the subject (as usual). First off I think the market started to discount the recession back in July and Aug. Back before anyone was considering a recession. However the Fed flooded the system with liquidity and postponed the market decline that would have predicted rough times ahead. At this point sure everyone is predicting recession because we are already in it. All the Fed has done is worsen the situation by adding a heap of inflation to go along with the recession.