Is the Economic Downturn Bottoming Out?

A reader writes:

I do not know if the economy is bottoming especially since there are no more stimulus checks being handed out in the foreseeable future. Many analysts from Bloomberg to Fox Business admit that September's numbers will not be as bright because this money has been spent. Please look no further than retailers. Even Wal-mart is feeling the pinch by reporting lower than expected numbers.

As an economist myself, we probably will not "bottom out" until third quarter 2009. My rationale for this are that the 2006 subprime resets will continue for the remainder of this year and loans and credit have dried up considerably. It will take two years for all of the people who filed bankruptcy protection early 2007 to reestablish any form of decent credit that more cautious banks will be willing to underwrite for more loans.

What Do You Think?

Through different blog comments and emails I have come to realize that the readers of this U.S. Economy web site usually make very good points about the economy, no matter what your level of expertise. I invite you to share your opinions in a new Forum topic I've created called "Is the Economy Bottoming Out?" Click here to Reply. Or, vote in a poll.

Here Are Some Related Articles

• How Bad Is the Economy, Really?
• Economists Forecast Recession -- Or Do They?
• Has the Housing Bust Bottomed Out?