Two Questions:

1. Is the U.S. Economy in Recession?

2. If so, how will it affect the rest of the world, including Russia?

Dates of Last 7 U.S. Recessions

• April 1960 – February 1961

• December 1969 – November 1970

• November 1973 – March 1975

• January 1980 – July 1980

• July 1981 – November 1982

• July 1990 – March 1991

• March 2001 – November 2001

• Since WWII:

• Average Recession: 10 months

• Average Expansion: 57 months

• Current Expansion: About 75 months (since November 2001)

• Who decides? National Bureau of Economic Research (www.nber.org), the Business Cycle Dating Committee

• NBER: “A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in 1) real GDP, 2) real income, 3) employment, 4) industrial production, and 5) wholesale-retail sales.”

• Some of these variables have started to peak and either flatten out (0% growth), and several, like employment, have declined for several months in row (negative growth). Recession? Takes 8-9 months for announcement.

• From Forbes “World’s Billionaires” report:• Moscow (74) has more billionaires than NYC (71)

and London (36).• Russia (87) is #2 to U.S (469), and has more

billionaires than Germany (59), India is #4.• Of the eight wealthiest billionaires, 4 are from India

(53 total) and only 2 from U.S.• Many U.S. companies (Caterpillar, Dupont, HP,

Wal-Mart, Pepsi, McDonald’s, etc.) have reported strong earnings and sales in recent quarters, due in large part to strong sales in emerging markets like Russia, China, India, and Brazil.

• Even U.S. companies with weak sales and profits like GM, are counting on strong sales in India, China, and Latin America to help offset slow, sagging sales in the U.S. and Europe.

• Bank Faliures (out of 8,500 total banks):

• 20050

• 20060

• 20072

• 20082

• Bottom Line:

The rest of the world, including the emerging markets (China, Russia, India, Brazil) remain strong and will either:

• 1) Survive a U.S. recession, or

• 2) Help support the U.S. economy from going into a recession.

• Prediction:

• U.S. economy will remain weak in the first half of 2008: Real GDP growth of .5% - 1.5%, but will recover in the second half.

• U.S. economy will be in slowdown, but will avoid an official recession in 2008.

• Recovery, with third and fourth quarter growth of 2 - 2.5%.