The House finally passed a rescue package today, which the President immediately signed. It’s designed to add liquidity to the credit market, which will hopefully help soften the blow of what’s coming for the economy. Every analyst I’ve heard from is in agreement now that we are in recession, and that it will be severe down the road. Cramer said today that we have avoided a depression. That’s the silver lining.
I’ve been watching CNBC a lot lately and I’ve heard estimates that unemployment will probably rise to around 7%. It’s currently at 6.1%. This would make it like the the recession that occurred in the early 1990s. I’ve also heard estimates that we’ve been in a recession for the past 8 months, and that the recession will last for another 8-9 months, which will make it a long one by historical standards. In the past, recessions have lasted a year or less. From what I’ve seen, looking at the historical data, it takes the job market about a year longer to recover than the economy does. So “brace for impact”.