Is the US in recession or not?

That really depends on how you would define it. Sure, US unemployment has risen sharply, and there are lots of other signs confirming that the US economy is going down the toilet.

Still, the economistblog points out that the data suggests something else. Maybe the recession is taking a long time arriving. Doomsayer Nouriel Roubini says the odds of a recession have gone up to 70%. And he warns that things are about to get ugly with a bear market in equities by year end and the rest of the world failing to de-couple from the US economic slowdown. Add to that Warren Buffett's opinion that the problems will continue and even get worse. And a survey of finance executives finding that two-thirds think the US economy is in recession.

The reason why this slowdown is different is because the US economy is now being hit by a very different set of forces from those which typically arise during the ups and downs of the business cycle. And the Fed is still trying to work this one out. This downturn is not about bankers trying to rein in output to growth rates to get some sort of price stability. No, this one is about an economy that has smashed straight into running up a vast and prolonged increase in the level of net public and private debt. Add to that the costs of fraud and credit mispricing and we have a lethal cocktail.