Why would you call this a recession/depression?

We are not currently in a recession, but we will likely soon be if we don’t regain some faith in the market.

Both terms are clearly defined.

Recession: A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Depression: A depression is any economic downturn where real GDP declines by more than 10 percent.

The data hasn’t been compiled to know if we are in a recession yet. Usually they are over before you know you were even in one. Tossing around either word is like voodoo in economic circles. But this will soon be a totally legit recession. And they are normal. I wouldn’t worry much.

A recession is when your neighbor loses his job.

A depression is when you lose your job.

I would say depression because I am feeling rather depressed that my few hundred shares of Washington Mutual in my IRA are worth close to nothing now….

In all seriousness, it’s looking rather bleak with the House’s action (or lack thereof) today on both the credit crunch and AMT legislation which is going to ensnare a large portion of the working middle class if nothing is done by the time they hang up their hats later this week…

@johnpowell: and the data that would indicate whether we are in a recession or depression are easy enough to monkey with: things like inflation numbers and the consumer price index determine how the GDP is calculated, and while it looks like we’re seeing GDP growth in dollars, when you index that to a historical dollar, it looks like at best we’re back where we were in 2000 or so.