Global Recession really over?

[mookiemookie]

Originally Posted by NeonSamurai

On another note I really don't think the western world is going to return so quickly to their excessive spending ways. Demand has been vastly over inflated in the west by marketing, particularly when it comes to technology. People were convinced by marketing that they needed all this new crap, that they needed a brand new state of the art cell phone every 6 months, that they need to spend 1000$ on computer video cards every year. Large numbers of rather foolish people were getting heavily into debt trying to keep up with the trends and technology. On top of it we have the "i am entitled to everything I want" generations who see no difference between borrowed money and money in hand.

I agree wholeheartedly on this point. We're seeing a secular, as a opposed to cyclical, change in consumer behavior here. They are being buoyed by government stimulus, but that's a temporary distortion and, long term, I expect we're going to see some reckoning. In this current recession, people have lost the "use your home as an ATM" option - home values have been slashed, and still have a long way to go, and credit is still tight from banks ravaged by bad loans. People are re-learning to spend what they have instead of running up purchases on credit. I don't believe that we can have recovery, at least for America, can truly be over until the consumer leads us to it. Consumer spending accounts for, on average, 2/3rds of domestic GDP.

Is the recession over, meaning have we stopped cliff diving in every measurable barometer of the economy? Yes, probably so. Does the end of a recession equate to recovery? No. It's going to take years to replace the job losses that we're seeing and will continue to see for a while. So if you want to call it a "jobless recovery" I think that'd be pretty close to accurate. And if things turn sour again over the next year, they're probably going to look at it as a continuation of the Great Recession instead of a second one.