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You knew it was coming. And it’s even worse than you imagined. [Engadget] More »

 Press Release: Microsoft Corp. today announced KIN, a new Windows^®Phone designed specifically for people who are actively navigating their social lives. Brought to life through partnerships with Verizon Wireless, Vodafone and Sharp Corporation, KIN is designed to be the ultimate social experience that blends the phone, online services and the PC with breakthrough new experiences called the Loop, Spot and Studio. KIN will be exclusively available from Verizon Wireless in the U.S. beginning in May and from Vodafone this autumn in Germany, Italy, Spain and the United Kingdom.

KIN is a new social experience from Microsoft Corp. that combines the phone, online services and the PC.

“Working closely with our partners, we saw an opportunity to design a mobile experience just for this social generation — a phone that makes it easy to share your life moment to moment,” said Robbie Bach, president of the Entertainment and Devices Division at Microsoft. “We built KIN for people who live to be connected, share, express and relate to their friends and family. This social generation wants and needs more from their phone. KIN is the one place to get the stuff you care about to the people you care about most.”

A New Kind of Social Phone

With KIN, social networking is built into the fabric of the phone. KIN has a fun, simple interface, which is designed to help people publish the magazine of their life by making the people and stuff they love the focus rather than menus and icons. The unique hardware design was developed in partnership with Sharp to create a new kind of social phone. There are two models called KIN ONE and KIN TWO. Both phones feature a touch screen and slide-out keyboard. ONE is small and compact, making it a perfect fit for a pocket and to operate with one hand. TWO has a larger screen and keyboard, in addition to more memory, a higher resolution camera, and the ability to record high-definition video. The 5 and 8 megapixel cameras in ONE and TWO, respectively, are designed for use in low light with image stabilization and a bright LumiLED flash.

The New Way to Share

The home screen of the phone is called the KIN Loop, which is always up to date and always on, showing all the things happening in someone’s social world. KIN automatically brings together feeds from leading Microsoft and third-party services such as Facebook, MySpace and Twitter all in one place, making it easier to stay connected. Customers can also select their favorite people, and KIN will automatically prioritize their status updates, messages, feeds and photos. Another unique feature, the KIN Spot is a new way for people to share what’s going on in their world. It lets them focus first on the people and stuff they want to share rather than the specific application they want to use. Videos, photos, text messages, Web pages, location and status updates are shared by simply dragging them to a single place on the phone called the Spot. Once all the people and content are in the Spot to share, the consumer can choose how to share, and start broadcasting.

Your Phone, on the Web

KIN Studio is your phone online. Almost everything created on the phone is available in the cloud from any Web browser. Photos and videos are freed from the confines of the phone and presented in an online visual timeline so they are easy to view and share. The KIN Studio automatically backs up texts, call history, photos, videos and contacts, and populates a personalized digital journal so it’s easy to go back in time to relive a crazy weekend or recent birthday. And the KIN Studio gives customers tons of storage to keep all those photos, videos, contacts and texts so they’ll never run out of space on their phone and lose a memory.

Music and More

KIN will be the first Windows Phone to feature a Zune experience — including music, video, FM radio and podcast playback. With a Zune Pass subscription, customers using Zune software on their PC can listen to millions of songs from Zune Marketplace on their KIN while on the go, or load their personal collection. KIN also has other features customers want in a phone including a rich browser with the ability to share pieces of the Web, local and Web search by Bing, and an RSS feed reader to pull down information on people and stories from the Web.

In the most extreme case of “Bieber Fever” we’ve seen since some radio station in Florida convinced a mother to tattoo Justin Bieber’s name on her body to win her daughter tickets to one of the heartthrob’s sold-out shows, obsessed Australian teens are so in enamored with the “One Less Lonely Girl” crooner, Bieber will have to perform behind a glass shield for his own safety when he takes the stage on a popular Australian morning program later this month.
Are they protecting a teen star or The Pope?

Fans are reported to have reacted wildly to the news Bieber was due to perform at a shopping center in Sydney on April 25, forcing a change of plans. Bieber will now perform his hit single “Baby” on the city’s Sunrise morning show on April 26, The Sydney Daily Telegraph reported Monday. He’ll be protected from his teen admirers behind a glass window during the entire show, sources tell the paper.

Last fall, Bieber famously sparked a stampede when approximately 10,000 teen girls showed up for a chance to meet the handsome 16-year-old star during a CD signing event at Roosevelt Field Mall in Long Island, NY.

The teen idol he first solo artist to have four songs from a debut album on the Billboard Hot 100’s Top 40 prior to its release.

Those who argue that Democrats might lose one or both houses of Congress are making an economic argument. Slow growth/high unemployment = angry, anti-incumbent voters. But what if the economy really perks up? First some analysis by Larry Kudlow:

Sometimes you have to take your political lenses out and look at the actual economic statistics in order to gauge whether we’re on the road to recovery or not. … No one has written more about the future tax-and-regulatory threats from the big-government assault of Obamanomics. But most of that is in the future. The current reality is that a strong rebound in corporate profits (the greatest and truest stimulus of all), ultra-easy money from the Fed, and some very small stimuli from government spending are all working to generate a cyclical recovery in a basically free-market economy that is a lot more resilient than capitalist critics would have us believe. So conservatives should not lose their cool and blow their credibility over a cyclical rebound that is backed by the statistics.

And now the econ team of Wesbury and Stein at First Trust Advisors:

Unfortunately, there is a group of people who still haven’t arrived at the station – mostly because they confuse politics with economic forecasting. Many Republicans and quite a few conservative television commentators are still trying to use the Clinton/Carville method of winning elections – “It’s the Economy, Stupid.” As a result, they keep telling anyone who will listen that the Obama agenda is going to kill the economy – RIGHT NOW.

But they will be wrong. It is true that more government spending and regulation, higher taxes, and government mandates will erode growth in the future. And it is true that recent growth in government will make it less likely the US will be the home of the next Apple iPad-type device. The fact of the matter is that big government and high tax rates hurt the entrepreneurial spirit and slow economic activity (see growth in Europe versus the U.S.).

But arguing that this recovery is not happening is a losing proposition. It is happening; And it’s V-shaped. We expected a V-shaped recovery as the panic ended, as monetary velocity returned and because Fed policy was easy.

Me: I think the key here is to see what happens with unemployment, incomes, housing and gas prices.  Certainly the economic consensus is for unemployment to stay above 9 percent. And my own analysis shows a big lag between an economic turn around and public perception. Perhaps the jobless rate will outperform on the upside as it has underperformed on the downside. One thing to keep an eye on is Obama’s approval rating which is now 45-48, according to Gallup.

Ron Dennis se despachó contra el Bugatti Veyron diciendo que el superdeportivo italiano era una completa basura, en comparación con “su” McLaren MP4-12C, según dijo a un periódico árabe. Es claro que Ron Dennis le está haciendo muy buena publicidad al producto de McLaren, en detrimento del italiano, considerando que estas declaraciones fueron hechas a un medio árabe, uno de los mercados que la casa británica va a aprovechar muy bien para vender el MP4-12C.

Pero sucede también que en Medio Oriente, es en donde más Bugatti Veyron se han vendido. Y ya veremos si los clientes del Veyron van a opinar de la misma manera que Dennis. Por lo pronto, el británico siguió refiriéndose al Veyron como un coche que no le dice nada y que además es horripilante.

De paso, aprovechó para recordarnos a todos aquella famosa carrera, hecha por Top Gear, entre un McLaren F1 y un Bugatti Veyron en donde supuestamente, el Veyron tenía que ganar. Dennis dice que tuvieron que rodar la carrera unas diez veces para darle posibilidad al Veyron, ya que el McLaren F1 siempre ganaba la aceleración inicial. En velocidad final, el Veyron todavía lleva las de ganar con 404 km/h, contra 390 km/h del F1.

Vía | Arabian Business

Please remember we are accepting entries until end of this Thursday, April 15th. Winners will be announced on May 24th, 2010.

How to Apply: Organizations can use this Entry Form to submit entries (opens a Word document).

Description: the new annual Brain Fitness Innovation Awards, designed to foster innovation and best practice sharing by celebrating outstanding pioneers who apply neuroplasticity-based research and tools in the “real world”. The awards will recognize organizations that are devising and implementing results-oriented and scalable initiatives that demonstrate their commitment to the brain fitness of their clients, members, patients, students or employees, and showcase innovative uses of non-invasive tools to improve cognitive and emotional functions and real-world outcomes.

Prizes

• 1 Grand Prize Winner will receive: $2,500 check, plus other benefits.
• 2 Silver Prize Winners will each receive: $1,000 check, plus other benefits.
• 7 Finalists will each receive: $250 check, plus other benefits.

More information on Judges, process, and dates, here: 2010 Brain Fitness Innovation Awards.

Analyst David Rosenberg talks about the obvious this morning: corporate profits.

If you take a look at Q409 or Q110 earnings from a lot of big companies, you’ll almost surely notice a sea change as losses from 2009 have turned into healthy profits. Rosenberg notes that 85% of the overall increase in corporate earnings can be attributed to the financials sector.

Breakfast With Dave: Total U.S. corporate profits (national accounts basis) rose 30.6% YoY in Q4, a huge swing from the -25.1% trend a year ago. Almost the entire story is in the Financial sector where profits have soared 240%, which is unprecedented. With the banks shrinking their asset base, the surge in earnings has been due to the ability to ‘extend and pretend’ post the FASB 157 changes a year ago and the ability to play a super steep yield curve.

Financial sector profits have accounted for 85% of the overall increase in corporate earnings. Total nonfinancial earnings are up the grand total of 5.2% on a YoY basis, though this is still much better than the -17.9% pace a year ago.

The financial share of total profits bottomed at 10.8% in 2008 Q4 and has since soared to 28.2%, one of the highest shares ever (and never higher before the credit bubble of the last cycle). This does not look sustainable to me.

Not surprisingly, many of these names ar ekilling it this year.

Let’s take a look at the obvious: YTD % gains of financial stocks:

• Financial Select Sector SPDR ETF (XLF): +15.31% YTD
• American International Group (AIG): +34.56% YTD
• Bank of America (BAC): +24.03% YTD
• Wells Fargo (WFC): +20.12%
• Citigroup (C): +38.36%
• CIT Group (CIT): +43.60%

Join the conversation about this story »

Bottled water has become a four-letter word in parts of the environmental community. But in Cascade Locks, Oregon where unemployment is at 18-percent the locals see a real four-letter word–jobs.

Nestle wants to build a $50-million water bottling plant near the Columbia River and take nearly 14 million gallons of water per month from a nearby spring. The plant would create construction jobs and 50 permanent positions making it instantly the city’s biggest employer. The company would also become the city’s biggest taxpayer generating close to $1 million for Cascade Locks.

But the environmental group Food and Water Watch is fighting the plant. Leaders say the bottled water industry is bad for the planet on many levels. In 2008 8.7 billion gallons of bottled water were sold in the U.S. Most of it was originally public water sold to companies like Nestle and then sold for a big profit to consumers.

Food and Water Watch has launched a national campaign called “Take Back the Tap” aimed at getting people to drink tap water instead of H2O out of a bottle. The message hammers away at the bottled water industry pointing out all the oil and water needed to make the bottles. And studies that show only about one-quarter of the bottles produced end up getting recycled.

Nestle and others in the industry say they are responsible stewards of the environment putting millions of dollars back into water projects and leading the research on developing a bio-degradeable bottle. While they don’t discourage people from drinking tap water, company officials say many people refuse to do it and for them it’s either bottled water or a less healthy sugary soda drink.

Complicating matters in Cascade Locks, the spring in question feeds a state-run fish hatchery which raises endangered sockey salmon that are trucked in from Idaho’s Snake River. The city of Cascade Locks would replace the diverted water with some of its well water.

The Oregon Department of Fish and Wildlife is currently testing the well water to see if it’s suitable for the fish. If it’s determined to be OK the state will likely sign off on the water transfer. That is unless public opposition grows.

Right now almost all of the opposition is coming from environmental groups in Portland and beyond. Cascade Locks city leaders and and an overwhelming majority of residents are currently backing the bottling plant.

They acknowledge that the spring water is a public resource and they believe it can be managed to help the whole community. The tax revenue alone might be enough to allow them to reopen their high school which was shut this year due to lack of tax base. Students are being bussed 25 miles to the closest school.

Many developers are up in arms about a new policy from Apple that mandates all iOS applications to be written in either a flavor of C or JavaScript. It’s original motivation is apparently to prevent Adobe’s imminent Flash-to-iOS compiler in CS5 from working, but the collateral damage is much greater than that.

There’s a wealth of cross-compilers in the wild that looks to be outlawed by the same provision. Titanium, Gambit Scheme, MonoTouch, and Unity3D are a few of the bigger ones. These layers allow you to write applications in programming languages like Scheme or C# and compile that into a native iOS applications (as well as other platforms like Android).

Lots of developers, me included, have had such a gut-turning reaction to Apple’s new policy that we have a hard time thinking and speaking rationally. The emotions take over and we start screaming “fascists!”, which isn’t very persuasive to non-developers who don’t have the same instinctual reaction. So instead, allow me to go through five (mostly) rational arguments for why this is a bad idea.

More…

Here’s the Quitter’s new employer, Fox News, makin’ stuff up about the Teabaggers.

The Tea Party Express has toured state after state trying to kick up a debate about constitutional rights and cast doubt on the legality of the recently passed health care overhaul, all with an eye toward the 2010 elections.

But while organizers have held the tour as a way to stay front-and-center as a political force, the rallies have also attracted the kinds of mistruths, exaggerations and conspiracy theories that make Tea Party leaders cringe. Though the movement is still trying to shore up its credentials as a grassroots power that’s here to stay, the so-called “fringe” and its accompanying antics continue to give critics fodder.

Just who are these “fringe” Teabaggers?

Bigots!

“Obama, to me, is a socialist. He’s a Muslim and all he wants to do is bankrupt us and run us into the ground,” Ken Schwalbach of Escanaba, Mich., said at a rally on Friday.

Birthers!

Other Tea Party members continue to question the president’s citizenship — a sign reading “Show Us Your Birth Certificate” popped up at a recent rally in Traverse City, Mich.

“What’s more disturbing is that he’s not answering them,” Tea Party member and conservative blogger Andrea Shay King said of the questions over Obama’s birthplace.

Conspiracy nuts!

Ron Moore of Petoskey, Mich., said he stood firm in his belief that the Democrats’ goal was to implement “death panels” to decide who receives medical care and who does not.

“They’ve already started,” he said.

Will the Quitter call Fox out on the air for smearing her beloved Teabaggery like this? Will she demand Fox corrects the record?

I’m going to go with no.

Filed under: Coupe, Performance, Ferrari

Chances are you probably haven’t seen the 458 Italia in person in the United States. The company’s newest mid-engined V8 coupe missed out on expected appearances due to Ferrari’s absence at the major auto shows this year, and only top clients and celebrities were invited to the private party and auction held for the 458 Italia in Southern California last month.

Ferrari did finally show off the 458 Italia to the public this past weekend – not at a major auto show or concours event but rather near the small town of Tooele, Utah. The decision wasn’t completely random, however, as Miller Motorsports Park was hosting the second Ferrari Challenge event of the year.

The 458 Italia was prominently on display next to the garage filled with Corse Clienti and F430 Challenge cars, and it definitely attracted its fare share of attention. Check out the gallery of live photos below, and check back soon for more coverage from the Ferrari Challenge.

Photos by Drew Phillips / Copyright (C)2010 Weblogs, Inc.

Ferrari 458 Italia makes North American public debut in…Tooele, UT originally appeared on Autoblog on Mon, 12 Apr 2010 12:30:00 EST. Please see our terms for use of feeds.

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[JURIST] The US Court of Appeals for the Ninth Circuit on Friday ruled that federal prisoners are not entitled to a base level of compensation for work performed while incarcerated. Serra v. Lappin grew out of a challenge brought by attorney J. Tony Serra, who was imprisoned for failure to pay federal taxes. Serra and two fellow plaintiffs claimed that their rights were violated according to the Fifth Amendment to the US Constitution and various sources of international law. Judge Richard R. Clifton delivered the opinion of the Court:
We conclude that prisoners have no enforceable right to be paid for their work under the Constitution or international law, and we affirm the district court’s dismissal of the action…The Constitution does not provide prisoners any substantive entitlement to compensation for their labor…Although the Constitution includes, in the Thirteenth Amendment,a general prohibition against involuntary servitude, it expressly excepts from that general prohibition forced labor “as a punishment for crime whereof the party shall have been duly convicted.” In addition to rejecting a cause of action on the basis of the Constitution, the Court also ruled that the International Covenant on Civil and Political Rights (ICCPR), a UN document entitled Standard Minimum Rules for the Treatment of Prisoners and the law of nations “do not confer judicially enforceable rights.” In February, the Ninth Circuit held that inmate strip searches are constitutional. That court also ruled in January that a Washington state law that prohibited felons from voting violated Section 2 of the Voting Rights Act.

Maybe this is the real reason job fairs are being cancelled: A sheriff’s deputy in Colorado has been suspended after using his taser on 30 high school students at a job fair last week. And it wasn’t a case of overzealous policing; the students volunteered!

According to reports, the deputy has been suspended for one week with pay after demonstrating his taser on willing high school students at the job fair.

One student was treated at the hospital following the tasing, while others had burns of varying degrees.

Authorities are considering whether to file criminal charges, but we have to ask: If the kids volunteered, did the deputy do anything wrong? Or perhaps a job fair was not the most appropriate place to demo his stun gun?

Stunning: Cop tasers 30 students at job fair [Daily News]

Twitter today open-sourced the code that it used to build its database of users and manage their relationships to one another, called FlockDB. The move comes shortly after Twitter released its Gizzard framework, which it uses to query the FlockDB distributed data store up to 10,000 times a second without creating a logjam.

The code was posted last night on GitHub, although as Twitter developer Nick Kallen writes (under a “warning” and a “what the hell is this?”) label:

This is in the process of being packaged for “outside of twitter use”. It is very rough as code is being pushed around. please forgive the mess.

This is a distributed graph database. we use it to store social graphs (who follows whom, who blocks whom) and secondary indices at twitter.

Still, ahead of Twitter’s Chirp conference this week — and in the wake of moves that may alienate some of the popular client applications through which many access Twitter — the company has released code that may improve the web for all. In a GigaOM Pro piece published over the weekend (sub. req’d), Derrick Harris said:

Twitter’s newly open-sourced Gizzard tool seems to have promise, as well. By eliminating some pain from the often difficult sharding process, Gizzard makes it easier to build and manage distributed data stores that can handle ultra-high query volumes without getting bogged down. Like Google, Yahoo and Facebook before it, Twitter has played a role in evolving how we use the web, and software developed within its walls should be a hot commodity for present and future Twitter-inspired sites and products.

Simply because of the number of users and the scale of its service, Twitter is solving problems that many other web-based startups hope they will have one day. So now I’m back to wondering if FlockDB and Gizzard will join the ranks of  Hadoop or Cassandra as open-source solutions for managing data at webscale.

Image courtesy of Flickr user Tim Morgan

Professor Rick Garnett on the future of the Supreme Court

NPR:
http://www.npr.org/templates/story/story.php?storyId=125641988

Boston Herald:
http://www.bostonherald.com/news/us_politics/view/20100410supreme_court_justice_john_paul_stevens_exit_sparks_intrigue_ex-crimson_dean_rumored_for_supreme_spot/

The Baltimore Sun:
http://www.baltimoresun.com/news/nation-world/bal-te.stevens04apr04,0,2964380.story

Professor Mary Ellen O’Connell on the legality of drones

CBS News:
http://www.cbsnews.com/stories/2010/04/08/opinion/main6377556.shtml

Wall Street Journal:
http://online.wsj.com/article/SB10001424052702303450704575159864237752180.html?mod=googlenews_wsj

This morning, Wells Fargo released its weekly dispatch of economic and financial analysis, providing an outlook based on the latest jobs, consumer spending, housing and interest rate figures. The report confirmed the growing consensus that the worst is behind the U.S. economy and the chance of a double-dip recession is receding. Still, it seemed a bit queasy. ”A recovery not led by a rebound in housing and consumer durable spending and accompanied by high unemployment?” it says. “Such is the strange brew we appear to be making for this recovery.” It goes on to elaborate:

Mortgage rates are rising while many homeowners see flat prices and rising foreclosures. Unemployment rates are high and yet both monetary and fiscal policies are gearing up for moves to tighten policy. The structural excesses of too many houses and too many goods relative to demand persist as many low-skilled and semi-skilled workers see very little in their future. Indeed a very strange brew for this very atypical economic recovery.

A strange brew — but not necessarily a bad one. Indeed, to see a “typical” recovery would be worrisome, given the atypical economic fundamentals. The housing market remains fragile, with waves of foreclosures on the horizon and analysts such as Meredith Whitney predicting that prices might continue to decline. So too with consumer spending: The chance that it might “lead” the recovery should be low, given the rates of joblessness and underemployment. (And, as an aside, the United States might want to be wary of housing-led anything for some time. Robert Shiller and others have convincingly argued that the last housing-led recovery, after the dot-com bubble, was nothing but the beginning of the economically catastrophic debt-fueled housing bubble.)

If the Obama administration is betting on anything to lead the recovery, it is exports, which it hopes to double in the next five years even as international demand remains soft. But the economic fundamentals at least for now point to a nothing-led recovery, with slow, incremental gains across sectors and persistently high unemployment.

The death of FDR in 1944 meant no New Deal, The Sequel. What did happen? This (via the WSJ):

Instead, Congress reduced taxes. Income tax rates were cut across the board. FDR’s top marginal rate, 94% on all income over $200,000, was cut to 86.45%. The lowest rate was cut to 19% from 23%, and with a change in the amount of income exempt from taxation an estimated 12 million Americans were eliminated from the tax rolls entirely.

Corporate tax rates were trimmed and FDR’s “excess profits” tax was repealed, which meant that top marginal corporate tax rates effectively went to 38% from 90% after 1945.

Georgia Sen. Walter George, chairman of the Senate Finance Committee, defended the Revenue Act of 1945 with arguments that today we would call “supply-side economics.” If the tax bill “has the effect which it is hoped it will have,” George said, “it will so stimulate the expansion of business as to bring in a greater total revenue.”

Me: Research indicates that top U.S. tax rates are already on the wrong side of the Laffer Curve. And our corporate tax rates are highly uncompetitive internationally. All play into a New Normal thesis over the long term.

Sony today announced the A845 OLED Walkman player. The Mp3 player is a mere 7.2mm thick and has an AMOLED screen. The size of the screen is 2.8 inches and has a resolution of 240*400 (WQVGA). The device has a storage capacity of 16Gb. Sadly the player is available only in England as of now.

One unique feature of the A845 Walkman player is that it is compatible with BBC iPlayer. The player can provide continuous audio playback of 29 hours and video playback of 8 hours. The device weighs in a mere 62g. Amazon.co.uk lists the Sony A845 OLED Walkman player at 149.90 Pound.

Sony also announced the W250 MP3 player and the B150 MP3 player. The W250 is a water-resistant and wearable MP3 player, made for rough use. The player has a storage capacity of 2Gb and the battery life is rated at 11 hours. The B150 series has increased bass which is mostly preferred by school and college going students. The B150 MP3 player features a dedicated Bass Boost button along ‘with flashing red LEDs.’ The B150 also has a 2Gb storage capacity.

The pricing of Sony B150 and Sony W250 is still unknown though. All the three MP3 players are expected to release all over the world by June, this year.

Don’t miss these Related Posts:

• Sony Walkman Tops The Sales Chart In Japan This Month
• Sony Announces Two New Cybershot Cameras
• LG Introduces A 15inch OLED LCD Screen

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Robert J. Gordon of Northwestern University is a member of the National Bureau of Economic Research’s Business Cycle Dating Committee, which declined to declare an end date for the recession this morning. Gordon disagreed with the delay and explains why he thinks the downturn has ended.

It is obvious that the recession is over. Real GDP has recovered strongly from a trough in 2009:Q2 and by 2010:Q2 (the current quarter) will have reached (or be very close to) its value reached in the peak NBER quarter of 2007:Q4, according to forecasts of private organizations that so far have proved to be remarkably accurate in forecasting real GDP changes a quarter or two in advance..

The committee also considers real GDI (the income-side measure of real GDP). For reference, this appears in the NIPA tables as Table 1.7.6 line 11. Most macroeconomists think that the BEA should feature this measure more strongly. Real GDI was at essentially the same level in 2009:Q2 and 2009:Q3, and then rose strongly in 2009:Q4 as did real GDP. The issue of whether the economy troughed in 2009:Q2 or 2009:Q3 is settled by the average of real GDP and real GDI, which reached its trough in 2009:Q2.

Real GDI is an important variable. It reached its peak in 2007:Q4 which ratifies the BCDC decision about the date of the peak. While it did not rise from 2009:Q2 to 2009:Q3, it rose strongly in 2009:Q4 and will presumably rise strongly in the first half of 2010.

Those who doubt the sustained momentum of the current recovery fail to appreciate the inherently temporary nature of the recession itself. There was a powerful economic downdraft that started with the failure of Lehman in September 2008 and extended into the winter and spring of 2009. Everybody panicked. Firms laid off employees by the millions, and real gross private domestic investment declined between 2008:Q3 and 2009:Q2 at an unprecedented annual rate of -41.6 percent, even faster than at any time during the Great Depression.

Numerous measures demonstrate that the panic phase was over long ago. Libor spreads declined from abnormal to normal in the winter of 2009. Junk bonds experienced a renewed wave of confidence and indeed were the best place to hold your money between December 2008 and March 2009. Then the revival of the stock market after March 9, 2009, ratified the end of the panic period. The first sign of the end of the recession on Main Street was the peak in weekly new claims for unemployment insurance (4-week moving average), which occurred in the week ending April 4, 2009. Historically, that measure is a reliable forecaster that the end of the recession was in sight, perhaps within weeks or or several months.

A useful way to characterize the end of the 2007-09 U. S. recession is the boomerang effect, also called the “rubber band effect” or in recent writing the “reverse gravity effect.” The harder you fall, the faster you bounce back. This idea, which some have traced back to Milton Friedman, suggests that the unprecedented downward force of a negative shock in 2008 and early 2009 automatically puts in place the forces that propel the current recovery. There are no plausible shocks that would suddenly push real GDP below its trough value of 2009:Q2 in the next year or two. If another cyclical downturn were to occur after a year or two, the NBER committee would treat this as a new recession, just as the 1981-82 recession in the current official record is regarded as a separate recession from the downturn that occurred between January and July of 1980.

Thus the American economy is enjoying strong upward momentum that is evident every day in the announcements of retail sales, service sector production, and almost everything else. There are no negatives in the actual data, but rather the negatives reside in doomsayer worries that consumers are too weak to spend or that the economy will collapse after the Obama stimulus dollars have been spent. Yes, consumers are saving and repaying debt, but nevertheless they are boosting retail sales from 2009 to 2010 by amounts that essentially cancel out the panic period. The slow but steady recovery of consumer spending will be fueled throughout this year and next by growth of employment. While the payroll survey measure of employment only began to increase in March 2010, the household survey measure increased by a strong 1.1 million (an annual rate of 3.2 percent) in the three months since its trough in December 2009. The lag of recovery in the payroll survey behind the household survey also occurred in the 2001-03 recovery, when the household survey proved to be a more accurate indicator of economic activity. When households say that they are finding jobs, those jobs give households income that can be spent on consumption goods and services.

The Date of the Trough

The committee decided not to declare that the recession was over and thus did not devote serious attention to determining the trough month. However, the data are clear, once we focus on measures of production rather than measures of employment, which historically have lagged the recovery of production. The lag of employment and aggregate hours behind production was particularly long in the most recent previous recoveries of 1991-92 and 2001-03.

The traditional measure of production used by the committee is the Federal Reserve Board Index of Industrial Production (IIP), which reached a well-defined trough in June 2009. For those who object that the IIP refers only to about 15 percent of the economy, the broader monthly measure real manufacturing and trade sales also reached its trough in June 2009. The private firm Macro Advisers has constructed a measure of monthly GDP that is available back to 1992, and this also indicates a cyclical trough in June 2009. While real GDI is flat across 2009:Q2 and 2009:Q3, quarterly real GDP reaches its trough in 2009:Q2, as does the average of quarterly real GDP and real GDI. Thus we have three monthly measures that reach a trough in June, the average of two measures of aggregate economic activity which reach their trough in 2009:Q2, and no clearly defined troughs occurring later than that in any series other than the traditional lagging data on aggregate hours of work and total employment.

The Committee’s Verdict

I am allowed to characterize the committee’s verdict in general terms without attributing any views to other members of the committee.

The reason that the committee was unwilling to declare that the recession was over had nothing to do with the belief of any individual committee member that the recession is not over. Rather, the reason for the verdict was different.

The committee viewed the likelihood of a double dip that would take the level of real GDP back below its previous trough of 2009:Q2 as extremely unlikely. However, the committee thought that, even if that probability was extremely small, it would be very costly to the committee to be proved wrong after the fact. Thus the committee was swayed by the view that the low probability of a double-dip multiplied by the high cost of being wrong in declaring the recession prematurely still amounted to a significant potential cost.

I disagreed with the committee’s verdict for three reasons:

(1) A double dip, i.e., two quarters with negative real GDP growth, is extremely implausible at any time over the next year.

(2) Because real GDP is on track to reach a value in 2010:Q2 roughly equal to its value in the previous NBER peak quarter of 2007:Q4, marking a full recovery, any subsequent “double dip” would be treated by the committee as a new recession rather than the continuation of the past recession. The precedent for declaring a second recession was established by the experience of 1980-81, when real GDP substantially exceeded its previous peak value in early 1981 before turning down in the second half of 1981.

(3) Even if there is a double dip, with a quarter or two of negative real GDP growth, that decline would have to be implausibly large to bring the level of real GDP down below its trough value of 2009:Q2. For instance, for real GDP in 2010:Q3 to decline below its previous trough value from the widely forecast levels likely to be reached in 2010:Q2 would require a 15% annual rate of decline in 2010:Q3. For a two-quarter dip in the second half of this year to bring real GDP below its previous trough by 2010:Q4 would require a 7.5% annual rate of decline for two straight quarters, a faster rate of decline than in the panic quarters of late 2008 and early 2009. If any such double dip were to happen after 2010:Q4, say at some point in 2011, by then the upward pace of real GDP growth would have brought the level of real GDP far above its value in the peak quarter of 2007:Q4, thus again requiring the committee to declare a new recession rather than the continuation of the recession that began in December, 2007.

In summary, a double dip is implausible, if it were to occur in the future it would be classified as a new recession rather than a continuation of the 2007-09 recession, and any hypothetical double dip would have to be more severe in magnitude than the late 2008 panic period to bring the level of real GDP down below its trough level of 2009:Q2.