Aug 11, 2010

JP Morgan's David Kelly on double-dip immunity and the growing US economy

I think [the odds of a double-dip] are very slight. I'd put it at no more than 15%, possibly 20%, but no higher than that. And the reason is -- and it's very important for people to understand this -- recessions are all about a collapse in the cyclical sectors: autos, housing, business equipment spending, inventories. If those are already in the basement, it's very hard for them to collapse.

That's why you get this immunity after you have a recession, which makes it hard to have another recession. We've got some bad economic numbers today, we think second quarter GDP will be revised down significantly, but overall it still looks like a growing economy to us.

~David Kelly, chief market strategist, JP Morgan Funds, CNBC Street Signs, August 8th, 2010

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