Original source: Xinhua

NEW YORK, Jan. 2 (Xinhua) -- The US economy is already in recession for a year and is expected to hit bottom in mid-2009, which would make it the longest recession since World War II, Standard & Poor's chief economist David Wyss said in a recent interview with Xinhua.

'As we expected, the peak is dated to December 2007, implying that the recession has already lasted longer than average,' Wyss said in an emailed reply.

'We expect to hit bottom in mid-2009, which would make this the longest recession since World War II,' although the recession is expected to be average in depth, Wyss said.

But he warned that if financial markets remain locked up and especially if oil prices rebound, this could turn into a deeper recession, with unemployment hitting 10 percent as it did in the early 1980s.

The coming Obama administration could push for a large stimulus package and continue to bypass normal credit market channels as needed, which should help keep the recession in check, he said.

On the current financial crisis, Wyss said the major cause was a glut of world liquidity, that pushed interest rates down worldwide and caused investors to disregard risk.

'In the end, the primary cause remains human nature. Whenever there is an extended period of stable expansion, people think it will go on forever, and underestimate risk. Then when risk appears, they panic and go straight from irrational exuberance to irrational panic,' he said.

Asked to comment on the prospects for some major economies in the world, Wyss said the United States was the first into recession, and will be the first out.

'China still has the highest growth rate and the best long-term prospects,' he said, adding that the European recession will be milder than in the United States.

Asked if he were invited to write a book about the economy in 2008, what the title would be, Wyss said for the United States, that would be 'The End of Indulgence: Learning to Live Within Our Means and Not Liking It.'