As a kid in the early 1960s, I would read the three stock exchanges - NYSE, American, and 'Over the Counter'. The last two are now called NASDAQ.

No, two consecutive quarters of negative GDP are the dictionary definition of recession. Here is the Wikipedia entry on "recession". The first sentence explains, A recession is usually defined in macroeconomics as a fall of a country's real Gross Domestic Product (GDP) in two or more successive quarters of a year.

The American Stock Exchange did not become NASDAQ - it never went away. OTC didn't have blue-chippers like Microsoft until NASDAQ boomed, tracking the tech bubble in the 90s.

Isn't buying houses or stocks betting that if your personal finances go to hell you can always sell either and at least break even? Confidence, even irrational exuberance, in the housing or stock market. :confused:

When that dictionary definition is met, then we were already entering recession years ago; when neo-classical economic numbers insisted the economy was booming.

We will not know if the recession is happening today (according to that definition) for many years. Years later, the GDP and unemployment numbers finally discover recession. Meanwhile, as that GDP number declares a recession, we may actually be back in a growing economy - as was the case in the early 1990s. They are lagging indicators because they measure things that occurred four and ten years previously.

Meanwhile, stock market currently says growth does not exist AND that numbers that define recession will say so years later. Common man's incoming has been falling for some years now. Using 'lagging indictors' only measure and report a recession years after the fact; years after the recession was created by a shortage of new and innovative products and created by 'money games'.

Irrelevant whether MSFT or INTC existed in NASDAQ or in a same stock exchange called 'Over the Counter'. NASDAQ pioneered trading by computers - not on a trading floor - even back in the 1960. That would be long before 1971.

The American Exchange is now part of NASDAQ when NASDAQ bought it. Back in the 60s, the OTC was the third exchange doing something radical - trading by computer. American Exchange that was #2 is now part of NASDAQ. But again, above provided as background information to demonstrate that "NASDAQ, which didn't even exist until 1971" is incorrect.

BTW, you can still buy products from RCA. And yet RCA has not existed for something like 20 years. AMEX is now part of NASDAQ that also existed long before 1971 - when AMEX was a larger and more respected exchange alongside NYSE.

Good points on all sides, honestly, and a reminder that any economic prediction is about as reliable as a weather forecast.

...actually, I trust the weather forecast a lot more, these days.

And in the same sense, when the economic numbers are booming, we were entering that boom when the economic numbers showed bust.

Since the boom - bust cycle appears to be inevitable, this is not a very useful observation.

A rather curious phenomena. Economics tends to have a cycle of about 10 years and another bigger cycle of about 30 years. Those thirty year cycles tend to be major changes. Take the 1970s. Add thirty years. A whole new breed of 'economic thinkers' trained in theory and little grasp of 1970s experience would only make same mistakes again. And so again, we are lying to the public how much we are spending in an illicit war, massive trade imbalances, interest rates climbing, commodity prices skyrocketing, inflation looming, rich getting richer while a middle class stagnates, government playing money games with spending and debts including emergency spending bills so that the actual fiscal mismanagement is not obvious, massive spending bills on coporate welfare such as the perscription drug plan to keep drug prices up and $8 billion to airlines with no stings attached, personal savings at an all time low, major institutions dealing with potential bankruptcy (ie GM, PBGC), and a population that does not have a positive economic attitude when economic statistics say otherwise. Welcome to the 1970s and to a event that traditionally occurs 30 years later - when economic leaders did not have personal experience from that history but plenty of training based in 'money game' theories (without grasp of the importance and nature of innovation).

Well, if you care to make a prediction, we can place it on the Cellar calendar and see whether it comes true. Give us a date for that downturn, it will be interesting in the future.

Because innovation takes four to ten years to occur, and since shortage of innovation is a primary source of recessions, then four years is a minimal number for economic data to measure what was actually happening within an economy. Within four years, we should know.

For the first time in 10 years, housing prices dropped this month. What makes it more interesting, those prices dropped by 2% in an economy that is now suffering a 2.8% inflation rate.

I'm a fiscal retard, can you give me the Cliff's notes interpretation of the implications of that fact?

Interpretation isn't the word I'm looking for, but there is an inchling who is distracting me.

I'm also economically challanged, but I'll take a stab at some of it.

If housing prices go down 2%, then the assesed value of my house should go down 2%, and my local government's real estate taxes should go down (HAH!) by 2%. So it's not such a bad thing, in my eyes.

Also, with housing prices going down, you will see fewer new housing starts. So the demand for building supplies should go down, and prices should go down a little too. You might be able to get a sheet of plywood for a reasonable price again. Good news if you are fixing up your own house.

Hmm. Our local assessment just went up nearly 50%. I think.

If it was 74,000 and is now 106,000 that is almost a 50% increase is it not?

Plywood is still pretty expensive but a bargain compared to copper or steel.