After the initial shockwaves of the banking collapse and credit crunch occurred in September, many experts predicted that the ensuing recession would be relatively shallow. Unfortunately, the massive stock market declines look like they were just the tip of the iceberg, instead of an acceleration of the painful recession. The past week revealed a series of gruesome reports which indicate the recession will result in additional job losses in the millions over a protracted 8-14 month period.
For the Emerginvest perspective, global markets, especially the US and Europe, have been reeling with each new shock like a boxer in the ring for two rounds too many. There are a few promising markets – this last week the Middle East has proven to be an especially attractive area. According to the Emerginvest Middle East Stock Markets page: Qatar is up 5.69%, Saudi Arabia 5.21%, Jordan 5.19%, and Palestine 4.02% all in the last week alone. However as a whole, the Emerginvest Emerging Markets Heat Map paints a gruesome picture of blood-red for the last quarter’s performance of world markets:
The unsettling truth is that, while experts have been agreeing on the fact that the recession will be long and protracted, last week’s report of 500,000+ job losses in a November puts an actual “face” to the monster. Even if job losses continue at a fraction of that pace, it undeniably results in millions of lost jobs over the next year. That alone frames the context of what this recession will mean to the majority of working class Americans.
However, that is assuming we have seen the worst of the recession in November, and given the jargon by most financial experts, there is substantial evidence that the worst is yet to come. An article written by the New York Times on Sunday, December 7th entitled: “In a String of Bad News, Omens of a Long Recession,” begins by a foreboding statement: “This recession, which officially began in December 2007, now appears virtually certain to be the longest downturn – and possibly the most severe – since the end of World War II, as evidenced last week by the rat-a-tat of grim reports on jobs, sales, and public confidence.”
The article goes on to compare the current recession we find ourselves entrenched in, with those from 1982 and 1974, both of which indicate that there will be at least another 6 months of economic pain - and those are with comparably less severe conditions than we have now.
That feeds into a statement made by Jared Bernstein, the economic advisor to Joe Biden in the same article, which states: “’ We’ll be lucky if the unemployment rate is below double digits by the end of next year,” adding to the already tenuous conditions with credit, housing, and stock markets which have collectively wiped out trillions of dollars worth of value from Americans. In addition, the shadow from the teetering American auto industry casts a grim pall on the typically retail-rich month of December. Despite strong language from Congress and the president-elect in regards to the big three automakers, many realize that if the Detroit three were allowed to fail, the instantaneous job losses in the hundreds of thousands might be enough to collapse the already-fragile house of cards that is the American economy.
So what does it mean? It means a number of things, including that we are likely to see some of the most comprehensive government-spending programs in half a century. Given the consistent message from President-elect Obama on the severity of the issues, it is clear he is fully intending on introducing a massive stimulus package once is sworn-in in January. In an interview on “Meet the Press,” yesterday, he stated that the package would be “’the largest infrastructure program in roads and bridges and other traditional infrastructure since the building of the federal highway system in the 1950s.’”
In addition, for those who are lucky enough to have saved up some discretionary income above a contingency laid-off emergency nest egg, there are tremendous retail deals to be had in light of the approaching holiday season. In addition, there are some incredible growth-buys in terms of investing – both here and abroad – for those who are looking to save, assuming they can stomach the recent volatility. Lastly, for those who are looking to enter the housing market, it might just be one of the best times to do so in the last 30 years. The impending significant job losses will coerce some those who have been holding out to sell their homes until after the crisis at severely depressed rates, creating opportunities for buyers while simultaneously losing significant value for sellers.
For everyone else who is not looking to enter into any of the investment or housing markets, it looks to simply be a grim time with the omnipresent threat of job loss, pervasive belt-tightening, and overall low consumer confidence for the next 8-12 months.
For the Emerginvest perspective, global markets, especially the US and Europe, have been reeling with each new shock like a boxer in the ring for two rounds too many. There are a few promising markets – this last week the Middle East has proven to be an especially attractive area. According to the Emerginvest Middle East Stock Markets page: Qatar is up 5.69%, Saudi Arabia 5.21%, Jordan 5.19%, and Palestine 4.02% all in the last week alone. However as a whole, the Emerginvest Emerging Markets Heat Map paints a gruesome picture of blood-red for the last quarter’s performance of world markets:
The unsettling truth is that, while experts have been agreeing on the fact that the recession will be long and protracted, last week’s report of 500,000+ job losses in a November puts an actual “face” to the monster. Even if job losses continue at a fraction of that pace, it undeniably results in millions of lost jobs over the next year. That alone frames the context of what this recession will mean to the majority of working class Americans.
However, that is assuming we have seen the worst of the recession in November, and given the jargon by most financial experts, there is substantial evidence that the worst is yet to come. An article written by the New York Times on Sunday, December 7th entitled: “In a String of Bad News, Omens of a Long Recession,” begins by a foreboding statement: “This recession, which officially began in December 2007, now appears virtually certain to be the longest downturn – and possibly the most severe – since the end of World War II, as evidenced last week by the rat-a-tat of grim reports on jobs, sales, and public confidence.”
The article goes on to compare the current recession we find ourselves entrenched in, with those from 1982 and 1974, both of which indicate that there will be at least another 6 months of economic pain - and those are with comparably less severe conditions than we have now.
That feeds into a statement made by Jared Bernstein, the economic advisor to Joe Biden in the same article, which states: “’ We’ll be lucky if the unemployment rate is below double digits by the end of next year,” adding to the already tenuous conditions with credit, housing, and stock markets which have collectively wiped out trillions of dollars worth of value from Americans. In addition, the shadow from the teetering American auto industry casts a grim pall on the typically retail-rich month of December. Despite strong language from Congress and the president-elect in regards to the big three automakers, many realize that if the Detroit three were allowed to fail, the instantaneous job losses in the hundreds of thousands might be enough to collapse the already-fragile house of cards that is the American economy.
So what does it mean? It means a number of things, including that we are likely to see some of the most comprehensive government-spending programs in half a century. Given the consistent message from President-elect Obama on the severity of the issues, it is clear he is fully intending on introducing a massive stimulus package once is sworn-in in January. In an interview on “Meet the Press,” yesterday, he stated that the package would be “’the largest infrastructure program in roads and bridges and other traditional infrastructure since the building of the federal highway system in the 1950s.’”
In addition, for those who are lucky enough to have saved up some discretionary income above a contingency laid-off emergency nest egg, there are tremendous retail deals to be had in light of the approaching holiday season. In addition, there are some incredible growth-buys in terms of investing – both here and abroad – for those who are looking to save, assuming they can stomach the recent volatility. Lastly, for those who are looking to enter the housing market, it might just be one of the best times to do so in the last 30 years. The impending significant job losses will coerce some those who have been holding out to sell their homes until after the crisis at severely depressed rates, creating opportunities for buyers while simultaneously losing significant value for sellers.
For everyone else who is not looking to enter into any of the investment or housing markets, it looks to simply be a grim time with the omnipresent threat of job loss, pervasive belt-tightening, and overall low consumer confidence for the next 8-12 months.
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