, Columnist
That's Your Idea of a Recession? Keep Trying
Let's bury the old and inaccurate notion about two straight quarters of negative growth.
Depressing, not a recession.
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There seems to be this idea that just won't go away -- that two or more quarters of negative economic growth mark a recession. This is, of course, incorrect. But it persists, and seems to get new life with every unsettling economic event, because people don't understand the basics surrounding what an economic contraction is or how we measure it.
The state of the economy, unsurprisingly, is significant to stock and bond markets. Unfortunately, by the time we learn that we are in a recession, it often is too late to make significant portfolio adjustments, as the stock market typically has already lost value and the bond market is in full rally mode.