Wednesday, September 15, 2010

Period After Recession

Do you remember reading about how the recession was going to end in 2009? Whether or not that has happened is a subject of debate. Some say that the recession is alive and well, others see signs of a comeback. It seems that the one consensus here is that we are in for a long slog back to an economy that resembles what it was in the mid-2000s. 


There are good signs of a comeback, or pending comeback. They include a Dow Jones industrial average that is in the 10,000 range and some reported job growth in 2010. 


Leaders at the United States Federal Reserve are saying that the American economic recovery is moving slower than expected. 


In a recent episode of “Meet The Press”, former U.S. Fed Chair Alan Greenspan noted that, “Small business, small banks, and a very significant amount of the labor force, which is in tragic unemployment is pulling the economy apart.”  Recent data shows that the economy grew at a rate of just over two percent in the second quarter of 2010 for the United States. This falls below the anticipated three to three point five percent growths. 


The concerns in America reflect concerns across the world. In China, recent trade data is bad news. While Chinese exports grew 38.1 percent in July from a year earlier, the number is down from the growth of 43.9 percent in June. Chinese imports grew 22.7 percent in July. That is down from June’s 34.1 percent increase.


American policy makers are reportedly hesitant to take new steps right now. But pressure is growing on them to do something. The bailouts of recent years have proven to be bad for public relations. A number of Americans have criticized our government for throwing money at failing companies.




The Economic Policy Institute, a Washington, DC think tank, spoke about the steps Americans must take to recover. In a statement, the group said that, "With a deficit of 10.9 million jobs--a 9.5% unemployment rate--the private sector is not yet able to provide a robust recovery, and it is time for the government to do substantially more to create jobs so the backlog of unemployed workers in this country can have a desperately needed chance to get back to work."


The group’s latest research shows that the labor market is stuck and that the forward momentum that many economists envisioned for 2010 has stalled. This has brought about new demands for the government to act.




The Economic Policy Institute issued another statement acknowledging that federal efforts to bailout companies have been criticized as largely ineffective and overly expensive. However, the group says that without federal intervention, unemployment could reach highs of 14 percent. This statistic does not include underemployment.


A recent survey suggests that only 18 percent of Americans are happy with their current financial situation. Only 13 percent of people polled in the United Kingdom were happy with their financial situation.  The trends on different b2b site that allows the business to business trade across the globe and have the presence of sellers and buyers from many countries at a time also show the same trend. 


Meanwhile, the same poll, by Ipsis Mori, shows that the people of India and China are not unhappy with their financial picture. In India, 85 percent polled were happy. In China, 77 percent were happy with their economic status.


Analysts believe that it reflects the feeling of overall economic growth in those nations despite the slowdown of the recession. Analysts also believe that the global economy is likely to rebound on the shoulders of China, India and Brazil. Where do investors turn to invest? Surveys say that Asia is the emerging market that experts are pointing at for growth.


Emerging markets underperformed in a period from fourth quarter 2008 to second quarter. They were 21 percent below the MSCI World equity index. Since May, emerging markets have rebounded by eight percent. China and India have, in general, performed well.



Experts believe that China is positioned to outperform any nation in the coming months. This is due to the fact that investors across the country are interested in putting money back on Chinese stocks. 


The Chinese government has made moves to enhance investors’ excitement about investing in its nation’s stocks. Critics say the Chinese government has been keeping its currency weak to boost export numbers and manipulate investors to invest in Chinese stocks.


While talk of a “double dip” recession is horrifying to people all around the world. Asian officials are also taking measures to curb inflation. Asian nations have seen a great deal of money come in from investors in recent years. The concern about this leading to inflation is growing.


Another concern expressed by investors across the world is whether or not emerging Asian markets have seen all of their growth potential. If that is the case, it could lead to big losses for all who bought into the theory of growth in Asia. 


A recent Reuters poll shows that while financial experts are accepting that there has been a cool down, we are unlikely to see a “double dip” recession. The experts note that the growth and potential growth in China and India will likely bring about good financial times for the linked in European and American economies.


Government financial groups internationally are not expected to raise interest rates until a few months into next year.


The international b2b portal trends also show the same across the globe.