Kass: Experts Agree, Recession Is Over

This blog post originally appeared on RealMoney Silver on Aug. 14 at 8:18 a.m. EDT.

Phew, I am now relieved!

I am comforted in the knowledge that on Tuesday a CNBC poll revealed that 90% of Wall Street economists believe that the recession has ended and that a Bloomberg survey (also this week) showed that the consensus sees real U.S. GDP expanding at annual rate of at least 2% for the next four quarters.

That's the same group of economists who failed to recognize the consequences of a bubble in stock prices in 1998-2000, the meaning of a three standard deviation event in rising home prices (and affordability), the fallout from a bubble in credit, the broad ramifications of a derivative market gone wild and an imminent recession several years ago.

And that's the same group of economists who interpret a statistical recovery as a self-sustaining economy that is incapable of double-dipping under the influence of numerous nontraditional headwinds.

The economists' conclusions must also be comforting to those Americans without jobs that don't count as unemployed because they have been dropped from the labor force and all the people getting foreclosed on in a housing market that has "bottomed." (As an aside, can unemployment ever exceed 10% given the fact that apparently jobless folks don't count as unemployed after some point?)

Yesterday's retail release was punk -- in the aggregate and at Wal-Mart (WMT) -- though the markets again ignored it. Consumption remains weak, even with savings at lower levels than many feared at only 4% to 5%. I have wondered what the downside to cost-cutting and productivity gains is as the paradox of thrift (and its implications) could haunt us in 2010. One also has to wonder how far into the inventory re-stocking process we stand as jobs, income and consumption continue to move in a southerly direction. And one has to wonder what the downside to productivity is and how large the permanent reduction in employment will be as companies begin to realize that they can run on less.