Happy New Years! Is 2009 going to be a year of recovery?

The first few trading days of 2009 is commencing in hours, can it follow up the decent rebound of the last few days of 2008?

WASHINGTON (Reuters) - The U.S. economy slipped into recession in December 2007, the nation's business cycle arbiter declared on Monday, and the downturn could be the worst since World War Two.

The National Bureau of Economic Research said its business cycle dating committee members met by conference call on Friday and concluded that the economic expansion that started in November 2001 had ended. The previous period of economic expansion, which ended in 2001, lasted 10 years.

The current recession, which many economists expect to persist through the middle of next year, is already the third-longest since the Great Depression, behind only the 16-month slumps of the mid-1970s and early 1980s.

"I think that we've got a ways to go, that this is going to be probably a deep and long recession," Jeffrey Frankel, a Harvard University economist who sits on the NBER's committee, told CNBC television. "It could be the worst post-War recession. We don't know yet."

The NBER does not define a recession as two consecutive quarters of decline in real gross domestic product, as is the rule of thumb in many countries. Instead, it looks for a decline in economic activity, spread across the economy and lasting more than a few months.

I have my doubts, and rightfully so. According to US, recession has been in effect for about 12 months so far. Here are some factual numbers from NBER (The National Bureau of Economic Research ) again.

Not counting the Great Depression of 1929, we're essentially half way through this mess. The next longest recession is 24 months! Slight optimism yet, worst case scenario we have another 11 months and a bit of overall market deteriorations to go.

Best case scenario, things correct in 4 months in time for April and rosy markets again. Given the US economic figures of late though, it's difficult to imagine that.

With that said, all this points to higher resources prices. Good things come to those who wait. Happy New Years, may we all look forward to a much more prosperous 2009. Thanks for reading and visit often!

The National Bureau of Economic Research — the widely acknowledged arbiter of recessions — announced today that a recession began in December 2007. That means the downturn is now a year old, and no one thinks it’s on the verge of ending.

Here are the longest recessions of the last century:

1929-33: 43 months 1910-12: 24 months 1913-14: 23 months 1920-21: 18 months 1973-75: 16 months 1980-81: 16 months

Economists have been forecasting that the current recession will likely end sometime in the spring (which is, presumably, when some of the new stimulus money will start to be spent). If they’re right, this recession will be roughly as long as the 1973-75 recession and the 1980-81 recession, both of which were 16 months. To find a longer one than that, you have to go back to the Depression.

Remember, too, that forecasters have been far too optimistic over the past year. At some point, that will change. But for now, the best bet seems to be that this recession will last for more than 16 months.