Unfortunately my thought that this was likely to be a long shallow recession was optimistic. I mentioned the “fat tail” risks to the downside, and definitely we are seeing those manifest themselves.

As for my crystal ball, I wish I had one, but to the extent I have any insight, most of my economic and investment thoughts and discussion of the kinds of things to do to protect oneself that are not here can be found at Risk and Return. I started there in January, and it has unfortunately not been pleasant. One long bearish slog of me saying things were worse than people thought, that the market would lose at least 35%, that the housing bubble and credit crisis were a huge disaster and my only concern was that I was probably too optimistic.

I do try and lighten it up with black humor though!

So, if you can stand that kind of thing feel free to drop me a note on your thoughts about it.

Meanwhile, the economy is weakening at the same time as low value wage rates are rising (due to the minimum wage) which makes hiring at the low end even more problematic.

My best guess, the NBER will ultimately rule we entered recession a good while ago, probably December, and the numbers will get significantly worse by year end. Unemployment is a lagging indicator typically. The recession will not be particularly deep (though the “fat tail risks” are much higher in this downturn than most) but the economy will be weak for much longer than the last two recessions.

And yes, the minimum wage raise will ultimately be a large factor in making it worse at the low end of the wage scale than it should be.

The only people who support wage laws are those who are ingnorant of economics, and pandering politicians.