Recession times - Are We Over The Worst Or Has It Just Begun ?
With many key markets and economies now having officially slipped into recession and with deflationary economies looming, many are asking the question if we are through the worst by now or if we have only seen the tip of the iceberg ?
This post looks at some of the expert opinions and where they see it all going.
MarketWatch forecasters, Nigel Gault and Brian Bethune, argue that we are indeed in the worst part of the recession now:
The economy has gotten much worse in the past few months, Gault said. The November payrolls report released last Friday “was a truly awful report,” he said. The news was twice as bad as it looked, because not only did payrolls shrink by 533,000 in November, “but things were an awful lot worse in September and October than we thought.”“You can’t find any rays of hope” in the November report, Gault said.
the December payrolls report will probably be “another very bad number,” although no one’s predicting another 500,000 job loss. “We’ve got to anticipate that firms are struggling to cut back staffing as rapidly as possible,” Gault said.The job losses are coming from everywhere, from construction and manufacturing, and from financial services and retailing. “The shakeout in financial services will take several more months,” Bethune said. The people losing jobs in financial services industries may have never been laid off before, he said, and many of them don’t have the ability to quickly adapt to the informal sector.Construction workers may be able to get work that’s paid under the table, or to barter their services, but no one needs the services of an investment banker in exchange for a haircut or a tune-up.Those investment bankers will have to think of something, however, because the industry is “permanently downsizing,” Bethune said.
“We are pretty confident that the recession will be deep but pretty short,” he said, predicting business and consumer confidence can recover as quickly as it had disappeared in recent weeks. “We don’t have to cut too many jobs.”
Appel said that Deutsche Post’s DHL unit, Europe’s largest express courier company, had invested around $2 billion in Asia in recent years, and “we will see similar numbers in coming years”.
The Reuters article continues with Mr. Appel’s near future predictions which seem more positive than most people’s :
Appel, who spoke at a briefing on a global trade study commissioned by DHL, was more bullish about economic prospects, saying he expected the global economy to recover faster than most people thought.
According to the study by the Economist Intelligence Unit, trade between Asia and the West will shrink by about 4 percent in 2009 before recovering in 2010, recovering faster than cross-Atlantic traffic, which will likely remain in the doldrums until 2011.
Stephen Stanley, chief economist at RBS Greenwich Capital, remains very concerned after the shocking job figures from the month of November where a staggering 533,000 people lost their jobs in the US, and says that :
“The overall picture is the labor market is deteriorating at the fastest pace in decades.” We’re going through the capitulatory stage where everyone is pulling back very sharply,” Stanley said. “We don’t know when it’s going to end, but it could last for a few more months.”
He does see some light at the end of the tunnel i.e. during or at the end of the second quarter 2009 where he belives the economy will start to stabalize, still contracting though but at a slower pace - to read his full predictions and comments from the CNN Money article click here.
