Recession Shit

8/11/2019 Recession Shit

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INTRODUCTION

In economics, a recession is a business cycle contraction, a generalslowdown in economic activity over a period of time. During recessions,

many macroeconomic indicators vary in a similar way. roduction as

measured by !ross Domestic roduct "!D#, employment, investment

spending, capacity utili$ation, %ouse%old incomes, business profits and

inflation all fall during recessions& w%ile ban'ruptcies and t%e

unemployment rate rise.

Recessions are generally believed to be caused by a widespread drop inspending. !overnments usually respond to recessions by adopting

e(pansionary macroeconomic policies, suc% as increasing money supply,

increasing government spending and decreasing ta(ation.

D)*INITION+

.In t%e United tates, t%e -usiness Cycle Dating Committee of t%e

National -ureau of )conomic Researc% "N-)R# is generally seen as t%e

aut%ority for dating U recessions. T%e N-)R defines an economic

recession as+ a significant decline in /t%e0 economic activity spread

across t%e country, lasting more t%an a few mont%s, normally visible in

real !D growt%, real personal income, employment "non1farm payrolls#,

industrial production, and w%olesale1retail sales.2 3lmost universally,

academics, economists, policy ma'ers, and businesses defer to t%edetermination by t%e N-)R for t%e precise dating of a recession4s

onset and end.


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)**)CT O* R)C)ION IN INDI3

)ven t%e strongest feel t%e crac's in t%e face of an eart%5ua'e. T%e

crac's are visible even during a brief recession. 6%en t%e mar'ets are

disrupted t%e effect s%ows. Unemployment is t%e greatest dread of

any man. 7ow will %e feed %is family now8 )(patriates are being s%own

t%e doors. 3merica w%ic% %as been %ome to many people is now turning

t%em out. -ranc%es of 3merican companies abroad are s%utting s%op.6%en t%ere are cuts in t%e wee'ly budgets, priorities c%anges, w%en

9ob see'ers are dumped t%ere is a big c%ange in lifestyle.

6%en t%ere are recessions t%e female employees feel t%e winds of

c%ange first as t%ey are more vulnerable. T%ey 'now t%ey will be laid

off t%e 9obs. It is difficult to believe, but it is true. 6omen w%o wor'

as receptionists, doing odd 9obs in t%e office, public relations and

communications are pic'ed out w%en downsi$ing is done.

Recessions %ave t%e tendency to touc% sore spots of business. T%ose

w%ic% are no longer viable are s%ut off. *or instance publications t%at

are now low on subscription, advertising and sales get t%e first cut.

:ost companies spend large sums on advertising in print and electronic

media. T%e R companies %ave to wor' on tig%ter budgets wit%

ma(imum mileage. C%ances are t%at different agencies t%at were used

for different products are now merged. 3 single agency is given t%e9ob to do. taff in t%e office faces retention as now t%e wor' load is

divided between only t%e most necessary employees. T%e ones left can

also forget about t%e raise in salaries and also wor' %ard.

3s U3 faces a visible recession in current times, it is evident t%at


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economists are in overdrive to review t%e fiscal statistics and give

e(pert opinions. T%e stoc' mar'ets %ave already created a panic

situation in t%e country. T%e biggest lenders are now facing a cas%

crunc% and for t%e first time t%ey are also admitting it.

:ost of t%e credit %as gone into %ousing, car, security and insurance

sc%emes. 3mericans w%o %ave invested in suc% sc%emes %ave only t%eir

stoc's to offer as collaterals and now are facing t%e brunt wit%

embarrassing foreclosures. Does t%is recessive situation warrant a soul

searc% amongst t%e ot%er nations w%o are depending and ban'ing t%eir

economies on Uncle am;s federal reserves8 T%e answer is yes. T%ere

%as been no sustainable development in ma9or sectors li'e %ousing,medical, small scale business. T%e U economy %as reac%ed its pea' and

is slowly going down%ill.

?@, t%e U.. %as encountered AB


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cycles of e(pansions and contractions, wit% an average of = mont%s of

contraction and A> mont%s of e(pansion. 7owever, since =>E t%ere

%ave been only eig%t periods of negative economic growt% over one

fiscal 5uarter or more,and four periods considered recessions+

=1November =>B+ =@ mont%s

mont%s

:arc% BEE=1November BEE=+ > mont%s

December BEE1


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tates could go into recession. On October =, t%e -ureau of )conomic

3nalysis reported t%at an additional =?H,EEE 9obs %ad been lost in

eptember. On 3pril B, BEE>, nine U states were declared by

:oody4s to be in a recession. In November BEE>, employers eliminated

?AA,EEE 9obs, t%e largest single mont% loss in A@ years. *or BEE>, an

estimated B.H million U.. 9obs were eliminated.

T%e unemployment rate of U grew to >.? percent in :arc% BEE, and

t%ere %ave been ?.= million 9ob losses till :arc% BEE since t%e

recession began in December BEE. T%at is about five million more

people unemployed compared to 9ust a year ago. T%is %as become

largest annual 9ump in t%e number of unemployed persons since t%e=@E;s.

3lt%oug% t%e U )conomy grew in t%e first 5uarter by =,by some analysts stated t%at due to a protracted credit crisis and

rampant inflation in commodities suc% as oil, food and steel, t%e

country was nonet%eless in a recession. T%e t%ird 5uarter of BEE>

broug%t on a !D retraction of E.? t%e biggest decline since BEE=.

T%e H.@ decline in spending during JA on non1durable goods, li'eclot%ing and food, was t%e largest since =?E.

3 Nov =, BEE> report from t%e *ederal Reserve -an' of %iladelp%ia

based on t%e survey of ?= forecasters, suggested t%at t%e recession

started in 3pril BEE> and will last =@ mont%s. T%ey pro9ect real !D

declining at an annual rate of B. in t%e fourt% 5uarter and =.= in

t%e first 5uarter of BEE. T%ese forecasts represent significant

downward revisions from t%e forecasts of t%ree mont%s ago.

3 December =, BEE>, report from t%e National -ureau of )conomic

Researc% stated t%at t%e U.. %as been in a recession since December

BEE "w%en economic activity pea'ed#, based on a number of measures

including 9ob losses, declines in personal income, and declines in real


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!D.-y


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ne(t growt% cycle, particularly wit%in 3sia, could last longer t%an most

analysts are predicting.

7istory s%ows us t%at unemployment normally pea's rig%t after a

recession %as ended and if we loo' at w%at is going on around us it

stands to reason t%at now is in fact not too dissimilar to previous

recessions. Ket4s follow some tried and tested met%ods for recession1

testing to gauge w%et%er we really are coming out of t%e recession. If

all t%e bo(es %ave been tic'ed, t%en it4s pretty safe in our view to say

t%at t%is recession is coming to an end if not in fact it %as ended

already.

T%e case still remains t%at most countries don4t actually 'now t%ey4re

out of recession until t%e official numbers are produced.

3s official numbers are generally crunc%ed in arrears, t%en most

countries typically %ave moved out of recession already by time t%e

numbers are released to t%e public. It also wor's in reverse if we loo'

at w%at %appened w%en t%e recession begun.

C%ina again is leading t%e recovery. T%e official purc%asing managers4

inde( fell slig%tly to ?A.= from ?A.? in 3pril, its t%ird straig%t mont%

above t%e mar' of ?E t%at separates e(pansion from contraction.

T%e acceleration in industrial production growt%, to >. percent in :ay

compared wit% .A percent in 3pril, beat economists4 forecasts of a

.? percent rise but was in line wit% figures reported in two C%inese

newspapers following t%e release of t%e figures.

Retail sales also grew by =?.B percent in t%e year to :ay, beating

forecasts and up from =@.> percent e(pansion in 3pril.

*urt%er afield in -ritain, %ouse prices %ave stopped decreasing. Kast


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mont% t%ere was a B.H percent rise in UL %ouse prices.

T%is was t%e biggest mont%ly 9ump in -ritain since October BEEB and

t%e overall year1over1year rate of decline improved from =. percent

to =H.A percent.

3lt%oug% t%ese are still ma9or declines it does signal a bottom is being

reac%ed.

It is our belief t%erefore t%at t%e global recovery is turning a

significant corner, bamboo s%oots %ave indeed sprouted and t%at t%e

recession %as in fact ended already.


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