The Yanks won't admit it but they are currently in a...

The Yanks won't admit it but they are currently in a recession.

Technically, we define a recession as negative GDP growth for two consecutive quarters, however the US meets all of the following criteria, so physically, they are in a recession:

Economic growth slows - Yes
Businesses stop expanding - Yes
Employment falls - Yes
Unemployment rises - Yes
Housing prices decline - Yes

I think that the Dow will move sideways for some time yet, but I also think it will need to test new lows before we see a sustained recovery, be it gradual.

The dilemma, for my mind, is working out the bottom of the trough or quite simply - where can we place the US economy in the Business Cycle at this point in time?

The following is where I see the US atm and I'm not counting on the start of the recovery process until mid 2009 at the earliest.