America is in a 'Depression'

America is in a depression, and so is the UK.

I hate to say it, but those words spilled from the lips of my lunching companion, the brilliant Stephen Lewis from Monument securities, and frankly I agree. This is what he had to say:

“Depression is a prolonged period of sub-optimal economic activity in which policy measures are ineffective in improving performance on a substantial basis and based on this, then the USA is in depression”

Well in the light of the awful double-digit US unemployment figure that came recently, this idea is not so inconceivable.

So what does this mean for America?

Well it would mean that for the next year or two, it will not feel like much for a recovery but more of a recession.  Moreover, there is no doubting that unemployment still has a long way to go before peaking. I am guessing that it might hit 12%.