I'll start right off the bat and admit I'm not economist. At least, not in the "diploma on the wall" sort of way. So let's get that out on the table. I'll begin right off and say that we are in an economic recession, and have been for at least the past 4 months.

How can I say that? Or, why do I think that? I'll list 3 economic indicators that tend to back me up on this one. They are: energy, housing, and for lack of a better term, bank policy.

1. Energy

Anyone who commutes or drives lots of miles regularly for business, lives in the north or northeast, or pays an electic bill, has noticed the incredible surge in energy prices dating back to last year.

My electric bill alone nearly doubled. I've since cut back (electric heat in my office turned down to 55, with a space heater turned on when I'm there to work and not on the road), but my bill is still more than it was last year, with half the usage. And I'm not alone.

How about $3.25 for a gallon of the cheap stuff to fill my tank. It used to cost me around $30 to fill-er-up. Now? Try $45.

Since lots of people tend to commute to work (on average an hour each way), increased energy costs for the average consumer typically means decreased consumer spending (unless it is offset by credit cards spending, but more on this later under "bank policies.") So this is strike one.

2. Housing

For the past 4 years, while attending business networking events, people would always ask me "is housing the next bubble?" In the beginning I'd say "gee, I'm not sure." That switched to "it doesn't matter if I think it is, the Federal Government thinks it is." And this was true. That's why the fed starting raising rates, to "cool off" the housing market.

Rate increases meant less demand for cash, less purchasing of new homes, etc. But what became the double-whammy for the housing market was the fact that all those adjustable rate mortgages started coming due. And right as rates were increasing.

Strike two.

Don't beleive me? Go ask any real estate person or mortgage broker around how business is. That is, if you can find any. A couple of real good friends of mine are still in the business. Last year they kept telling me they were waiting for the "spring market" to arrive. Right up until October. No spring market ever came.

So, pile incredibly high mortgage payments on top of high energy bills, and where did discretionary spending go? It's all used up. Which leads us to...

3. Bank policies

By last estimate, if I remember my friend correctly (he's "in the know," as they say) the foreclosure/bad loan mess that wall street and the banking industry created (yes, created) amounts to a loss of 240 billion. So, let's assume that's accurate. Heck, even half is a LOT of money. How are the banks going to recoup their losses?

You guessed it. Have you noticed the increased rates on credit cards. My capital one card, for instance, went from 7.99% to 12%. Overnight. Thank you very much. Of course, since they were bailing out (i.e. buying) North Fork Bank (my wife's car loan was with them), they needed to come up with some money. So they passed that along to us.

About a year ago the banks were told to increase the minimum payment due on credit cards. That hit consumers right in the wallet, just at a time when it hurt the most. Now interest rates have risen (ok, the fed recently lowered rates, but I haven't noticed a difference on my credit card statement, have you?), CD rates have fallen (and continue to fall), and wall street has reacted.

Strike three.

With little to no money available for consumer spending (paying off credit cards, putting gas in the car, and trying to stay in your home), most people aren't able to spend their money anywhere else, because it's all tapped out. During the past holiday seaon, while we were in the mall buying a few gifts, I noticed the mall was packed. But... no one was carrying any shopping bags. No one. What does that tell you?

So, these 3 factors, in my opinion, spell recession. Like, it's already happened, not as in "coming soon to a theatre near you." Now, if you ask me how long I think it will last... my crystal ball's in the shop for needed repairs, but other friends of mine in the know (real estate appraisers, commercial lenders, etc.) with enough experience to remember the late 80s and early 90s, tell me that, in their opinion, this could last another 3 to 4 years. Not sure if I buy into that completely, but let me say this, it wouldn't shock me to see this current environment play out for another year or two.