Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
UK Housing Market Analysis, Trend Forecast 2022 to 2025 - Part 2 - 30th June 22
Stock Market Turning the Screws - 30th June 22
How to Ignore Stocks (and why you should) - 30th June 22
Top Tips For Getting The Correct Insurance Option For Your Needs - 30th June 22
Central Banks Plan To Buy More Gold In 2022 - 30th June 22
AI Tech Stock PORTFOLIO NAME OF THE GAME - 29th June 22
Rebounding Crude Oil Gets Far Away from the Bearish Side - 29th June 22
UK House Prices - Lets Get Jiggy With UK INTEREST RATES - 28th June 22
This “Bizarre” Chart is Wrecking the Stock Market - 28th June 22
Recession Question Answered - 28th June 22
Technical Analysis: Why You Should Expect a Popularity Surge - 28th June 22
Have US Bonds Bottomed? - 27th June 22
Gold Junior Miners: A Bearish Push Is Coming to Move Them Lower - 27th June 22
Stock Market Watching Out - 27th June 22
The NEXT BIG EMPIRE WILL BE..... CANZUK - 25th June 22
Who (or What) Is Really in Charge of Bitcoin's Price Swings? - 25th June 22
Crude Oil Price Forecast - Trend Breaks Downward – Rejecting The $120 Level - 25th June 22
Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally - 23rd June 22
The Fed’s Hawkish Bite Left Its Mark on the S&P 500 Stocks - 23rd June 22
No Dodging the Stock Market Bullet - 23rd June 22
How To Set Up A Business To Better Manage In The Free Market - 23rd June 22
Why Are Precious Metals Considered A Good Investment? Find Out Here - 23rd June 22
UK House Prices and the Inflation Mega-trend - 22nd June 22
Sportsbook Betting Reviews: How to Choose a Sportsbook- 22nd June 22
Looking to buy Cannabis Stocks? - 22nd June 22
UK House Prices Momentum Forecast - 21st June 22
The Fed is Incompetent - Beware the Dancing Market Puppet - 21st June 22
US Economy Headed for a Hard Landing - 21st June 22
How to Invest in EU - New Opportunities Uncovered - 21st June 22
How To Protect Your Assets During Inflation - 21st June 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Double-Dip Recessions, Economics and Ice Cream Cones

Economics / Double Dip Recession Jul 08, 2010 - 05:31 AM GMT

By: Mike_Stathis


Best Financial Markets Analysis ArticleOver the past several weeks, you may have heard the back and forth debates regarding the possibility of a double-dip recession between the various media hacks and clowns they interview.

The overwhelming question has been, “Will the U.S. enter a double-dip recession?”

Have you ever stopped to ask yourself exactly what a double-dip recession is?

Let me cut to the chase. There is no such thing as a double-dip recession. Even the NBER does not have a clear definition of this term.

According to the NBER, a double-dip recession is

“A continuous recession that's punctuated by a period of growth, then followed by a further decline in the economy.”

There’s a big problem with the use of double-dip.

First, Washington, Wall Street and the financial media adhere to the completely useless definition of a recession; two consecutive quarters of negative GDP growth.

But in the NBER’s vague definition of a double-dip, the period of “growth” does not qualify as the end of a recession. It merely acknowledges a slight improvement in economic conditions relative to previous data.

Therefore, if you accept the definition of a double-dip recession, you have to accept the NBER’s definition of a recession, which goes well beyond the traditional definition of two consecutive quarters of GDP growth.

The NBER analyzes numerous economic metrics; a much more comprehensive and accurate method to determine the beginning and end of recessions.

In fact, according to the NBER, we are heading into the 30th month of the recession.

So, if the media hacks want to even entertain the idea of a double-dip recession, the must first acknowledge the NBER’s own analysis that the recession has not yet ended.

When one speaks of recessions, are referring to the economic cycle.  Recessions occur at the trough of the cycle. Economic expansions occur at the peak. Therefore, according to economic cycle theory, you can only have a recession or an economic expansion. You cannot have anything in-between, such as a so-called “double-dip recession.”

This concept is similar to the bear-bull market cycle, which of course is tied very closely to the economic cycle.  You can either have a bear or bull market. There is no in-between.

The financial media confuses bull and bear markets as well.

Recall in 2009, when the stock market bottomed in March. Thereafter, it mounted a tremendous rally. By June, many were claiming the beginning of a new bull market. By August, many of the “most influential” Wall Street investment strategists followed this sentiment.

However, the fact is that a new bull market had NOT begun. It was merely an oscillation through the bear market cycle.

There is no in-between. There is no such thing as a double-dip recession much in the same manner as there is no such thing as a bull market within a bear market cycle.

Thus, use of the term “double-dip recession” is another way to downplay or mask the severity of the current recession, while side-stepping the NBER’s own analysis which states that the recession has still not ended.

Similarly, we have not seen a bull market since the March 2009 lows. It’s called a bear trap or sucker’s rally. And it’s used as a way to stick the sheep with stocks that are headed down. 

If you will recall, last year the media buzz phrase was “green shoots.”  I have no idea what a “green shoot” is because I don’t pay attention to the media hacks. If you know what it means it’s a very good sign that you are wasting your time with the media. If so, you can count on losing much more money in the stock market. 

While we are in a recession that has not shown any signs of abating since its onset in December 2007, the fact is that the overall economic correction we are experiencing does not fall within a normal economic cycle. What we are seeing is a depression, which will last many more years. 

Have a look at reality here.

If however, you want to speak in terms of dips, you need to at least use the correct multiplicity—quadruple-dip recession, because that is what America faces, at minimum over the next several years, if in fact you want to insist that what we are seeing even fits within an economic cycle.

In my opinion, there are two situations to use the term double-dip. The first is when you’d like two scoops of ice cream. The second is when you have no idea what you’re talking about when referring to the economy. That explains why you hear so many speak of the bogus term, “double-dip recession.”

Thus, anyone who uses the term double-dip recession should never be relied upon for any type of analysis.

Humans are by nature followers. Those who fail to question the basis behind a term or theory are forever destined to remain as sheep. In the end, after the sheep have been herded in mass, they always get slaughtered.

If you truly want to escape the herd and propel yourself ahead of the curve, you need to align yourself with the insights and guidance of someone with a proven track record of success; someone with no agendas' someone who is a leader in thought; someone who is willing to teach you the tricks he has learned. 

If this is not something you feel you need, I will guarantee you that your chances to make it through this difficult period will be very low. 


By Mike Stathis

Copyright © 2010. All Rights Reserved. Mike Stathis.

Mike Stathis is the Managing Principal of Apex Venture Advisors , a business and investment intelligence firm serving the needs of venture firms, corporations and hedge funds on a variety of projects. Mike's work in the private markets includes valuation analysis, deal structuring, and business strategy. In the public markets he has assisted hedge funds with investment strategy, valuation analysis, market forecasting, risk management, and distressed securities analysis. Prior to Apex Advisors, Mike worked at UBS and Bear Stearns, focusing on asset management and merchant banking.

The accuracy of his predictions and insights detailed in the 2006 release of America's Financial Apocalypse and Cashing in on the Real Estate Bubble have positioned him as one of America's most insightful and creative financial minds. These books serve as proof that he remains well ahead of the curve, as he continues to position his clients with a unique competitive advantage. His first book, The Startup Company Bible for Entrepreneurs has become required reading for high-tech entrepreneurs, and is used in several business schools as a required text for completion of the MBA program.

Restrictions Against Reproduction: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the copyright owner and the Publisher. These articles and commentaries cannot be reposted or used in any publications for which there is any revenue generated directly or indirectly. These articles cannot be used to enhance the viewer appeal of any website, including any ad revenue on the website, other than those sites for which specific written permission has been granted. Any such violations are unlawful and violators will be prosecuted in accordance with these laws.

Requests to the Publisher for permission or further information should be sent to

Books Published

"America's Financial Apocalypse" (Condensed Version)

"Cashing in on the Real Estate Bubble"

"The Startup Company Bible for Entrepreneurs"

Disclaimer: All investment commentaries and recommendations herein have been presented for educational purposes, are generic and not meant to serve as individual investment advice, and should not be taken as such. Readers should consult their registered financial representative to determine the suitability of all investment strategies discussed. Without a consideration of each investor's financial profile. The investment strategies herein do not apply to 401(k), IRA or any other tax-deferred retirement accounts due to the limitations of these investment vehicles.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in