If you want to see a good overview of where the economy really is and where it's probably going, I strongly recommend reading this post by John Fernald, VP of the SF Fed.
The current recession is longer than any recession since 1933 and, in terms of GDP, is as deep as any in the post-war period. Yet the forecast for recovery is anemic compared with historical experience. The relative weakness reflects in part continuing tight credit conditions for households and businesses as financial institutions and markets slowly heal. At the same time, as noted earlier, consumer spending is likely to remain relatively weak. In the forecast, it takes 11 quarters, until the third quarter of 2010, just to get GDP back to its pre-recession level.
Remember when buying Tech stocks would make you wealthy? Then that bubble burst.
Remember when buying a house would make you wealthy? Then that bubble burst Remember when...
Remember when the present crisis broke in 2007, the reassurances that it would not spread beyond the confines of subprime; when it did spread, the forecasts that Wall Street banks
' losses would amount only to a total of about US$200 billion. Remember when "experts" insisted no widespread credit crunch would result. Remember when they insisted that the crisis was unlikely to spread from Wall Street to the real economy on Main Street?
Perhaps one of the more important benefits of the financial collapse and the economic depression is that it is forcing economists to re-examine their profession. Well, OK, some economists. And maybe not so much "examine" as just plain old internecine warfare.
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