How long will this recession last?

jmarkham

Junior member
38 4
I have heard so many different predictions about how long this recession will last. I have read articles, listened to the news and watched economists, and they all forcast different predictions.

I have heard that it will be over by the summer, and that the worst is yet to come, aswell as many other theories.
 

Trader333

Moderator
8,553 914
I suggest that you stop trying to predict the bottom of the market as you will invariably almost always get it wrong. The reality is that no one knows how long it will last after all these experts were not even able to predict it starting. So why would you think that any views on when it will end are of any value at all ?


Paul
 

SAINT

Well-known member
334 39
As Trader333 said, all of these experts are basically just giving us educated guesses and if they were unable to spot the problems that got us into it then I doubt they'll be right in predicting the next stage.

'Recession' as a term is economic contraction over a sustained period so once GDP etc goes back to positive territory then it would be over. The reality is though, that things may be very different for a long time. The playing field has changed and many of the things that contributed to the boom times have disappeared. Massive numbers have been cut from the jobs market, house prices and consumer/business ability to get and maintain credit so Britain has to face the reality that it's success in the last decade was a mirage built on unsustainable levels of debt and a return to innovation and enterprise is needed to get the country working again.
 

anley

Senior member
2,730 229
It's not so much a question of when it will end but how long the smell will last. Sort of like if your house is flooded by the local river it will dry out but the effect will be with you much longer.

So as as educated guess, 3-5 years assuming it's as bad as it looks.

Ever had a serios debt problem or know somebody who has? How long till they or you get properly back on your feet? 2-5 years is about right, unless you suddenly come into a lot of money or double your salary overnight - both of those are unlikely and even more so if you're a country like the UK.
 
B

Black Swan

0 0
I'd suggest Japan in the 90's is our 'best' hope and comparison. I'd also argue that Japan hardly got out of their recession and have experienced close on 10-15 years of very little growth/development in their 'real' economy.

Having followed Japan with a zirp policy, for the UK specifically, it''ll be a helluva climb out of the benign conditions you then inadvertently create and when a glimmer of economic growth hope eventually does light it may be extinguished just as quickly.

I'll therefore suggest 10-15 years of very little growth in the UK (the recession statistically won't last this long - perhaps 5 years) with economists, closely tied to the govt. of the day, convincing the 'sheople' that things are improving...
 
Last edited by a moderator:

chump

Senior member
2,212 274
chump, was that in response to my suggestion or to the OP?
Hi Tony,
That was for anyone who wanted to read it. Ease and cost of business finance will need to recover as a prelude to any sustainable growth ....investment/employment and everything related to it come off the back of that. Without it I fail to see how anythingelse ignites although I dare say we could see some false launches without it.
I've skipped the drivel above this ;)
 

SAINT

Well-known member
334 39
Just stumbled across a good quote in Fortune from Ray Dalio, founder/manager of the world's largest hedge fund with regards to recession/depression:

"Most people, says Dalio, think that a depression is simply a really, really bad recession. But in reality, the two are distinct, naturally occurring events. A recession is a contraction in real GDP brought on by a central bank tightening monetary policy, usually to control inflation, and ends when the central bank eases. But a D-process occurs when an economy has an unsustainably high debt burden and monetary policy ceases to be effective, usually because interest rates are close to zero, and the central bank has no way to stimulate the economy. To compensate, the value of debt must be written down (risking deflation) or the central bank must print money (a trigger of inflation), or some combination of both.
In recent years the level of debt as a percentage of GDP in the U.S. has skyrocketed past previous highs last seen in the early 1930s. And the Federal Reserve's benchmark rate is now hovering just above zero. To Dalio, therefore, it's clear that a D-process is under way. "It seems very likely that stocks will get materially cheaper," he says. "We have to go through an important debt restructuring process, and a lot of assets are going to be for sale, huge numbers of assets. And there's going to be a shortage of buyers."
Even investors in most hedge funds won't be immune. According to research by Bridgewater, the hedge fund industry in aggregate is 75% correlated to the S&P 500, an issue on which Dalio has been sounding an alarm for a couple of years now. "Too many people have a systematic bias toward positive economic growth," he says. "I think that what we're going to probably have is an economy that's going to get worse, with most people positioned for it to be better." By the end of the D-process, he expects that the reverse may well be the case."
 

nine

Senior member
2,038 506
There is a huge debt hangover + drop off in spending coming as baby boomers retire.

Dipsticks like KRudd from Australia and GBruin from the UK think you can just transfer debt to the taxpayer and the future taxpayer to fix it. Wrong. I wish they were right but they are economic morons.

If its good it might be over in 2012. If not 2014-2015. Although we could still have some pretty weak years to follow that.
 

doberman

Well-known member
264 4
My biggest fear is if say we come out of this 2/3 years time and then double dip there is going to be no money to bail us out with the debt will be in.
 

AudioTactics

Newbie
1 0
It's a long haul...

The recession in the US will probably be over by mid-2010 based on the technical definition followed by anemic growth.

As said above we are in a deflationary process whereby debt must be paid down or re-negotiated before things will take off again. And there is so much debt this time that that process could take 10-15 years. This means very low growth prospects for a good while.

I think the Japan 1990's scenario is an appropriate comparison...
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock