Surviving the Recession of 08-09 It WILL End but the Recovery Will Present Its Own Challenges Chris Kuehl Economic Analyst...
 
The Recession of 2008-2009 is OVER!! <ul><li>Stock market has gained 30% since March </li></ul><ul><li>CMI has been up for...
 
OK – So It’s Not Exactly Time to Pop the Corks <ul><li>Unemployment has moved above 9% </li></ul><ul><li>Industrial produc...
How Bad Was This Last Recession? <ul><li>Comparable to recessions in the last three decades – not necessarily the worst bu...
 
 
 
 
Stimulus  - China vs. US <ul><li>$780 billion  vs. $600 billion </li></ul><ul><li>US version – divided into three unconnec...
Banks, Capital Markets and Bail Outs  <ul><li>Some movement in the capital markets – Libor is close to normal again, most ...
Five Things to Keep You Awake at Night <ul><li>Global recession affecting Europe and Asia differently </li></ul><ul><li>In...
Coming Out of a Recession <ul><li>The first few months of a recovery are often the most threatening in the whole recession...
 
 
 
 
 
 
 
 
 
 
Contact Information – ckuehl@armadaci.com <ul><li>For more information on all this excitement please request  </li></ul><u...
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Chris Kuehl, Economic Analyst, Fabricators &amp; Manufacturers Association, and Managing Director, Armada Corporate Intelligence

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Surviving the Recession of 08-09 (It WILL End but the Recovery Will Present Its Own Challenges)

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Chris Kuehl, Economic Analyst, Fabricators &amp; Manufacturers Association, and Managing Director, Armada Corporate Intelligence

  1. 1. Surviving the Recession of 08-09 It WILL End but the Recovery Will Present Its Own Challenges Chris Kuehl Economic Analyst Fabricators and Manufacturers Association Managing Director Armada Corporate Intelligence
  2. 3. The Recession of 2008-2009 is OVER!! <ul><li>Stock market has gained 30% since March </li></ul><ul><li>CMI has been up for three straight months </li></ul><ul><li>PMI has started to trend upward (but is still under 50) </li></ul><ul><li>Banks have survived the “stress tests” and Libor rates are back down to traditional levels </li></ul><ul><li>France and Italy have seen indicators trend back up – so has the UK </li></ul><ul><li>China is back in growth mode and so is India </li></ul><ul><li>Investors pouring more money into emerging markets than anytime in past twenty years </li></ul>
  3. 5. OK – So It’s Not Exactly Time to Pop the Corks <ul><li>Unemployment has moved above 9% </li></ul><ul><li>Industrial production is roughly 40% below where it was last year </li></ul><ul><li>GDP growth is anemic and still negative in some nations </li></ul><ul><li>Credit markets have improved but are still cautious </li></ul><ul><li>Deficit spending is pushing many nations to the brink and many will have a hard time reducing it </li></ul><ul><li>Inflation is the next big challenge and it will require moves that will slow recovery </li></ul>
  4. 6. How Bad Was This Last Recession? <ul><li>Comparable to recessions in the last three decades – not necessarily the worst but some unique issues </li></ul><ul><li>Fundamentally a bank led crisis and one that will not end without a bank recovery </li></ul><ul><li>Worst quarters were in 2008 Q4 and 2009 Q1 – more hope for Q3 and Q4 </li></ul><ul><li>Factors that play into global recovery – consumer attitude, banks, foreign trade, stimulus plans and the threat of inflation </li></ul><ul><li>Asia as a major force for recovery </li></ul>
  5. 11. Stimulus - China vs. US <ul><li>$780 billion vs. $600 billion </li></ul><ul><li>US version – divided into three unconnected plans – stimulus, recession relief and tax modification </li></ul><ul><li>Chinese version – highly targeted on job building and economic growth </li></ul><ul><li>US version – slow to evolve – highly regulated environment </li></ul><ul><li>Chinese version – very quick to implement – little concern for details – just get something going to create jobs </li></ul><ul><li>No more than 3% allocated thus for infrastructure in US as opposed to 60% in China </li></ul>
  6. 12. Banks, Capital Markets and Bail Outs <ul><li>Some movement in the capital markets – Libor is close to normal again, most seem to have survived the “stress test” </li></ul><ul><li>Desire to nationalize has faded but intervention is significant – regional banks fared better than most but FDIC worries them </li></ul><ul><li>Why the banks got in such trouble – equal measures greed and stupidity and the law of unintended consequences </li></ul><ul><li>What happens with the automotive sector – Fiat comes back to US, GM shrinks, Ford gloats and the new auto sector is in the south and has Asian roots </li></ul>
  7. 13. Five Things to Keep You Awake at Night <ul><li>Global recession affecting Europe and Asia differently </li></ul><ul><li>Interest rate policy – when do they go back up? </li></ul><ul><li>The return of the oil and commodities bubbles </li></ul><ul><li>The recession expanding beyond this year </li></ul><ul><li>The recession ending soon while providing something else to worry about - inflation </li></ul>
  8. 14. Coming Out of a Recession <ul><li>The first few months of a recovery are often the most threatening in the whole recessionary period. </li></ul><ul><ul><li>Competition is prepared to exploit any weaknesses. </li></ul></ul><ul><ul><li>Ammunition to respond to these threats is in short supply – especially this time given the problems with finance. </li></ul></ul><ul><ul><li>Consumers are highly demanding if they have money to spend – other consumers are moribund </li></ul></ul><ul><ul><li>Precise knowledge of the recovery period is not available – how fast and how soon are the major questions. </li></ul></ul><ul><ul><li>Policy shifts by the government can provide help or it can deal a death blow – depending on who the policies are designed to assist </li></ul></ul>
  9. 25. Contact Information – ckuehl@armadaci.com <ul><li>For more information on all this excitement please request </li></ul><ul><li>Business Intelligence Briefs ‘ </li></ul><ul><li>Daily e-mailed briefs on economic and business issues of interest </li></ul>

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