Are we due for a Recession?

Nobody likes, everybody hates it; it's the R-word. Everybody, the stock markets included, freaked out today when long term interest rates dropped below short term interest rates. This is called an inverted Yield Curve. The repurcussions of this (the majority times that it happens) is a recession. Most recently, this occurred in 2000 (of course the election of one Mr. George W. Bush and the 9/11 attacks helped perpetuate it) and in 1989.

Are we in for another one? In my opinion, probably not, but then again you never know. Interest rates are a funny thing, and I'll do you all a favor and spare you the finance lesson on why Interest Rates and bond prices are inversely related, but whenever rates go down, bond prices go up, thus making them more expensive to investors. What do we have to worry about? A couple things:

-Housing Bubble: If this things bursts, you can bet your sorry little ass that this country will plunge into a recession. This bubble bursting will make the stock market drop of early 2000-2001 seem like a walk in the park.

-Another Terrorist Strike: The fact of the matter is, is our country is woefully unprepared for another terrorist strike, let alone one that would cause mass casualties (i.e. an atomic or dirty bomb). This was evidenced earlier this year by Hurricane Katrina.

-Another War: Hey, with Bush in the White House, anything is possible!

The bottom line here is that another recession would be devestating for this country. Our trade deficit is currently at a record high, and with this administrations lack of desire to cut taxes, we would be left with few options, other than adding to the deficit, should a recession strike our nation again.