The news from the National Bureau of Economic Research that we've been in a recession since December of 2007 was met with a 680 point sell-off on Wall Street on Monday.
I suppose the markets got spooked by the "R" word, but in reality most Americans not living under a rock the past year have realized that we're in an extremely soft economy. Whether it was technically deemed a recession was sort of meaningless, but I guess not so for the bears on Wall Street.
But I think there is a silver lining to all this: If we've been in a recession for 12 months, that means we've probably bottomed out already and we'll likely come out of it in early summer. The reason for my optimism: Since the Great Depression, the two longest recessions have lasted 16 months -- 1974-75 and 1980-81.
Even if this recession exceeds those, it likely won't be much longer, so perhaps we're looking at spring or early summer. Factor in the unprecedented level of government stimulus that is going to flood the economy in the new year, and it could end faster.
I'm not buying the doomsday scenario that says we'll be in recession until 2010. After all, the business cycles are much more compressed than years past; the government is able to allocate resources much more quickly; and we're an infinitely more productive workforce. Our economy bares zero resemblance to 1974 or 1981, and we shouldn't use those recessions as a gauge.
I think the fourth quarter will be the low point, and by the second quarter we'll be back to growth.