IF I were still blogging, I would post a brief missive about Ben Bernanke and how he got as close as any Fed chairman would ever get to calling a recession. While he didn’t use the “R” word to characterize the present state of the economy, he did note today in his prepared remarks before the Joint Economic Committee that we could see the economy contract during the 1st half of this year. In a few week’s we’ll know whether there was contraction in the 1st quarter when GDP figures are released.

Contraction in the 1st half would be the fulfillment of the text book 2 quarters of GDP contraction that are required to meet the technical definition of a recession. Bernanke did remind however that the NBER is the official recession calling body and that they use a more subjective and complicated set of factors to call a recession.

So were it so that I was still blogging, I would certainly point out how foolish the recession deniers look in the aftermath of the Bernanke remarks! Today, with the Fed chief saying we’re in for a recession, the stock market only suffered about a 50 point decline basis the Dow. It has been obvious to most sensible folk that if it walked like a duck and quacked like a duck that it was indeed a duck, or in this case, a recessionary environment.

The point being — there was no broad stock sell off today in response to Bernanke, because he ended the charade and made the pronouncement that could be the only expected outcome of a brutal credit crunch – Recession. Anyone with a quarter of a clue, a modicum of honesty and smidge of an ability to handle the truth has known the reality of our economic predicament — anyone that is but those foolish and dumb enough to cheerlead and deny reality. Score another one for those who have keep their eyes open!

Yes, Ben pretty much said it today — the R word — and few were surprised.

The greater reality of recession will come in the weeks ahead as earnings are released and as the credit crunch persists… but I no longer blog, so I’m sorry to say that I’ll have to save those thoughts for another time.

Last 5 posts by Jim Kingsland

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