Shiller: US remains in “bad recession”

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Robert Shiller was among the very few to warn of a housing bust before it happened. Now he says that although the housing market could be approaching a bottom, prices might remain in the “doldrums” for years to come as the US remains in a “liquidity trap” comparable to the one it faced during the Great Depression.

Though stock market prices are valued fairly, Shiller said, equities remained a “risky” investment because the US had not turned the corner on its fiscal crisis. He warned that stock prices “could fall dramatically”.

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Source: MoneyNews, July 20, 2009.

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2 comments to Shiller: US remains in “bad recession”

  • Kurt Schoeneman

    I go by my gut and my gut says be very careful. There are some opportunities, but they are few, far between, and not of the herd. I am 68 and have managed to become fairly well off always paying close attention to my gut.

    There is clearly much different this time around compared to my previous recessions – which go back to 1974. Obbama is a terrific guy, but his background is bereft of regular business people, He may be a quick enough study to figure out what he must, but maybe not.

    Leave an extra margin for error. Wait for the opportunities which can only not fail. Remain standing, even if you are not right. Yes, that’s large a margin of error. Best to you all.

  • G Smith

    Re R Shiller: It’s too bad he ruins his otherwise good commentary by lapsing into Keynsian economics. He should know that with a flat AS (Aggregate Supply) curve you only get a negative response to government stimulus efforts. For every $1.00 of stimulus you get roughly a contraction of $1.00 in GDP especially with gross debt at over 50% 0f GDP. He’s trying to push on the QE string which will lead to the Joe Biden school of economics = “when in debt over your head, spend more to create economic well-being”. Look at the Japanese last 20 year economic tragedy!

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