Recession woes

It’s official, Canada is now in a full bore recession.  There are now two camps emerging (I listened to podcasts during the treacherous ride back from the ‘Chi today).  The optimistic camp sees economic growth returning in early 2010 and the pessimistic camp won’t say when growth will return but cite parallels to at least two separate decade long periods of no growth in the past 140 years.

The DOW is back to 1997 levels and the TSX is back to 2004 levels. 

I hope there will be market for bargain rate economic development consultants in these times….

5 thoughts on “Recession woes

  1. Unfortunately, the “pessimistic” camp is more realistic. The optimistic view is based on economic forecasts that are skewed by a flaw that is inherent to economic analysis: the models are built on relatively recent economic data. What we are seeing today is relatively unprecedented so traditional economic models cannot be applied freely. A better tool for getting a sense of where things are headed is history.
    My advice: there is money to be made from the lessons learned during the lost decade in Latin America (and elsewhere). Living in LA in the 80s and 90s has helped me forecast virtually everything that we have seen in the last 6 months.
    But this is not for everyone. There is a huge difference between learning things from experience and just knowing because we read it somewhere. Some business trips to Brazil may prove handy 🙂

  2. Just what I said yesterday is now in today’s Globe and Mail :

    [Mr. Orr and other economists] say the power to revive economic growth is out of Ottawa’s hands because Canada is utterly dependent on sales to the recession-ridden United States, a $14-trillion (U.S.) economy that buys 80 per cent of this country’s exports.

    “It’s largely more about the U.S. recovery than it is about any stimulus package in Canada,” Toronto Dominion chief economist Don Drummond said. “We just so desperately need the U.S. and world economy to recover before we’re going to get some traction.”

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