A Late 2009 Turnaround in the Economy Seems Optimistic
I’ve really been somewhat riveted by the current economic crisis. Each day seems to bring new twists and the numbers are 
getting worse by the month. Today they announced a 2.7% decrease in December retail sales. Isn’t December the month where everyone is supposed to go gangbusters and spend tons of money they don’t have? Apparently not last December.
I’ve read more than a few articles where economists talk about a mid to late year turnaround. Other articles even cite the real possibility that this recession will be a “V” recovery, where it goes down quickly but then bounces back just as quickly. I can’t find a single reason why I think that will be the case.
- Layoffs are being announced daily by companies all around the country
- Late 2008 saw job losses increasing, not decreasing and early 2009 doesn’t seem to be trending any better
- Companies are still retrenching and are certainly not planning growth and hiring in 2009
- Hundreds of companies around the country are closing up shop now or are planning to this year
- Credit is still tight for a large percentage of the population due to more conservative lending rules. I don’t see why those rules will change much this year as they are simply going back to fiscally responsible standards
- As job losses mount, there is real concern that foreclosures may continue to increase as the next wave of people, who have traditionally paid their bills on time and have good credit, can’t afford the payments
- For every one job that is available, there are 3.8 people trying to get hired for it. That most likely won’t change this year due to all of the other economic factors
- Fear is driving every sector of the economy, from Wall street to the street in front of your house. That doesn’t appear ready to go anywhere any time soon.
So, where do we go from here? I’d argue that we have a long period of flat or negative economic growth ahead of us and we should each take the steps to position ourselves for a long ride. While we have been spending a lot of money over the last week, we are still doing our best to continue to save and build our cash cushion further. I think cash is going to be KING for awhile and the more of it you have, the better you’ll be able to ride out this downturn. Most people seem to be afraid of using the term 2009 Depression but this is probably the closest thing to the first depression that most of us have or will ever see. There are just too many parallels to the first depression and too many incomprehensible things have happened already. Who would have thought that some of the titans of Wall street would fail? Who would have expected Washington Mutual and other high profile banks would fail? Who would have predicted that some of the staples of the retail world would fail? And damnit, who could have predicted the fall of my favorite cookies in the world?
Comment from www.uzoom.com
Time January 19, 2009 at 12:03 am
As we have seen in the middle of 2008 how the economic crisis crash the world economy. In the middle and the pinpoint after the middle 2008 many big and international companies had to closed and all the resource for employment has vanished.But later in Nov/Dec 2008 the companies take some relief. they are now in better condition. So I am agree with you on this point.