Friday, December 05, 2008

How Bad Will The Economy Get?

Well, that's anyone's guess, but the blogger Live Grenades gives a pretty informative run-down of where we are right now.

Despite all the pain, I've been feeling, so far, that this isn't as bad (yet) as 2001. 2001 - 2002 was a terrible business year. Then again, I was in New York, where business stopped cold after 9/11 and didn't really start again until 2003.

This time, business hasn't stopped cold. But the mood out there is that it's continuing to worsen. According to the analysis at Live Grenades, job losses so far have been on par with the 1990/91 recession. Having just entered the job market during that recession I can say, yeah, right now, this feels just like that.

However, my sense is that things are going to get worse before they get better. NOTHING HAS BEEN DONE YET TO STIMULATE THE ECONOMY. It's egregious they're going to let this go on another two months like this, but there it is. Bush's final parting gift to America.

So it's impossible to think that December or January will bring any joy. If Detroit is bailed out and money gets released to states immediately after Obama takes office, February may slow the trend, but don't bet on a decreasing trend in losses (let alone job GAINS) until March 09.

That's three more months of big loss numbers to look forward to, or another million and a half jobs lost before things start to turn around. Given that, it's likely this recession will still end up topping the biggest post-Depression recession of 80/81.

I was in college then. Made money in summers selling door-to-door encyclopedias. Now, selling old books on e-bay may be how we pay the bills....

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