Transcripts

"Two Ways to Play"-The Recession

SUSIE GHARIB: It's said there are two sides to every story, two ways to play every trade and it's a good idea to look at both sides of an issue. So tonight, we're doing just that with a look at the American economy. In our "Two Ways to Play" segment, here's Minyanville's Kevin Depew and Kevin Depew of Minyanville.

KEVIN DEPEW, EXECUTIVE EDITOR, MINYANVILLE.COM: It's official: the recession is finally here. Earlier this week, the National Bureau of Economic Research formally declared the economy in recession, setting the start date for this particular downturn in December of last year. That's the bad news. The good news is that typically, a formal announcement of a recession tends to coincide with its conclusion. After all, economic data virtually by definition, is backward-looking. So here we are 12 months into this current downturn, how much longer? Since World War II, the average duration of a recession is about 10 months. Even if we mirror the deep recessions of the early '80s or mid '70s, which were about 16 months long, we could expect this one to last maybe another four months. So perhaps there is light at the end of this tunnel after all. Kevin, Kevin, Kevin, you tragic optimist. You know that light at the end of the tunnel my friend? That's a train. I understand the desire to compare this recession to previous ones, but here's the problem. There's absolutely nothing about this downturn that is typical or usual. The Federal Reserve and Treasury Department are employing economic policies that haven't been used in this country since the great depression. That isn't a recession; it's an economic crisis. Now unfortunately, I think that when we look back at December 2008, we'll say, you know, just when we thought it was over, it was really only beginning.