So it’s official. We’re in a recession and have been since December 2007, according to the National Bureau of Economic Research (NBER).

It’s difficult to know who and what to believe these days, but I feel pretty safe trusting a non-profit research group that’s been around since 1920. Heck, 16 of the 31 American Nobel Prize winners in economics and six of the past chairman of the President’s Council of Economic Advisers were researchers at the NBER.

The question now becomes, when will this recession end? Well, that’s exactly what Leon LaBrecque, managing partner and founder of LJPR, a Troy, Mich.-based investment firm with more than $300 billion in assets, wrote about in his firm’s blog in December. He called what we’re in now a bear-cession.

There have been 13 bear markets since 1926, including the one we’re in now. There have been 15 recessions, including the current one, and nine bear-cessions.

The average length of the recession part of the bear-cession was 14 months, while the average length of the bear part of the bear-cession was 23 months. The bear market always preceded the recession, and did so by an average of seven months, wrote LaBrecque.

The one bear-cession we’d like to ignore, LaBrecque continued, was the one that occurred between October 1929 and July 1932. That was when the country saw an 86 percent market decline and a 34-month bear market. The recession lasted 42 months. If you toss out this grizzly of all bears, the average bear market was 20 months and the average recession nine months or three quarters. He further observed — and hopefully this gives you some hope — that we’ve effectively moved away from the mistakes of the Great Depression. LaBrecque added that he believes the current bear-cession is halfway over.

Between LaBrecque observations and the NBER’s revelation, that means our F&I Conference and Expo later this year should be very interesting.

I think everyone is looking for that silver lining these days. I know I am. On our forum there was a rumor about a possible consumer bailout that would suspend the Federal Insurance Contributions Act tax and federal taxes for 2008. Boy, wouldn’t that have been great?

All I know is my wife and I spent the last two months of 2008 hoping to make it through unscathed. Like this industry, there are many naysayers about the future of my profession — journalism. I even had a guy who spent the last couple of years in the mortgage business tell me that journalism was dead. I guess he’d know best what a doomed industry looks like.

When my eyes were first opening up to the realities of life, I remember complaining to my dad about how impossible it was to get out of debt. My father laughed and said, “Greg, you’ll never be debt-free. The only thing you can do is learn how to manage it.”

The problem today is there’s no way to manage anything. That’s why the Fed’s December unveiling of an $800 billion plan to bolster lending was met with such a cool reception. Many wondered if it was a good idea to encourage Americans to borrow more money in a time like this.

Since the crisis began to reveal itself last year, every pundit said the other shoe would drop if unemployment jumped. Well, that’s what the NBER saw when it said we were officially in a recession. Unfortunately, the news worsened a couple of days after the research group released its report, with the Labor Department reporting that employers slashed another half-million jobs in November.

That’s why I hope we’ll be talking about a bailout for the domestic automakers when we’re in New Orleans for the National Automobile Dealer Association’s convention later this month. The consumer psyche is in need of some good news. I won’t even mention that our industry makes up almost 4 percent of the country’s gross domestic product. And I won’t even mention the millions of jobs at stake here. Things didn’t sound too positive at press time, with the U.S. Senate rejecting a $14 billion bailout in December.


I wish I could tell you things are about to turn around, but I can’t. All I can say is that I hope you’ll view the magazine as a survival guide for the months ahead. That’s why we have an exclusive interview with CUDL to discuss whether credit unions will remain active. It’s also why we’re talking about reinsurance in this issue.

Besides reading those articles, there’s one other thing you can do for me. Write to me about what your store is doing to weather this economic storm. I’m sure other readers would be interested.