Recession Vs Widening Gap Between Investors and Non-Investors

Update

Saturday, June 4, 2011: This past week's stock market drop and the horrendous job report on Friday, June 3, 2011, for the month of May, has others thinking of a "double dip recession. Again. I came across this headline after my original post yesterday: Jobs Report Stokes Fear of Double Dip Recession.

With government cutting back on employment and private sector job growth slowing, many economists now fear the economic recovery has stalled and could be heading for a double-dip recession. Government fiscal and monetary programs are set to expire between now and the end of the year, and traditional engines of economic growth like construction and housing are still in free fall.

Original Posting

Friday, June 3, 2011: Today's market action and commodity plunge has all the feel of a tipping point: either back into a recession or another widening of the gap between investors and non-investors. I am conflicted which way it will fall.

Data points that suggest slipping back into recession:

• Pundits noting that $115-equivalent oil in the past has resulted in recessions (oil almost hit $115 a couple weeks ago) [I can't remember the exact number, or the link, but it's out there.]
• Housing prices have officially hit a double dip [that link is easy to find if anyone is interested]
• Prices on high-end bicycles down the street are being slashed [no link; personal observation]

On the other hand:

• Productivity/worker hits new record
• Earnings reported 1Q11 higher than ever; more companies than ever participating
• High-end bicycle prices down the street are still over $5,000/bike

On second thought, I don't think the two events (slipping back into a recession and a widening in the gap between investors and non-investors) are mutually exclusive, especially for investors with nice-dividend-paying stocks. Many companies increased their dividends this past quarter.