Crescenzi: Recession's Here...Time to Buy?

The National Bureau of Economic Research, the private, nonprofit, nonpartisan research organization that dates business cycles, said today that the U.S. recession began in December 2007, the date widely believed to be the start date.

The NBER indicates on its Web site that of the 10 recessions since 1945 their average duration was 10 months, with the longest lasting 16 months from July 1981 to November 1982. The recession of 1980 lasted 6 months beginning in January of that year, a fact that makes the period 1980-1982 notable. The longest recession of the 20th century was lasted 43 months, from August 1929 to March 1933. The Depression marked the second longest recession in U.S. history, with the longest lasting 65 months from October 1873 to March 1879.

Risk assets such as equities and corporate bonds have tended historically to begin recovering in the middle of recessions, which to some would make the current period seem a safe time to begin buying, but the depth and the duration of the current recession remains overly unclear.

This will delay a meaningful recovery in risk assets. Only when the deterioration in the economy stops will investors look over the valley and ignore bad news, facilitating sustainable rallies in risk assets. This hasn't happened yet--economic data continue to worsen. Data need not get better to spark a rally; they need only stop getting worse.

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Tony Crescenzi
Tony Crescenzi

Tony Crescenzi is the Chief Bond Market Strategist at Miller Tabak + Co., LLC where he advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. Crescenzi makes regular appearances on financial television stations such as CNBC and Bloomberg, and is frequently quoted across the news media. He is also the author of the forthcoming book, "Investing from the Top Down," "The Strategic Bond Investor," and co-author of the 1200-page book "The Money Market."Crescenzi is a contributor to"