DEEPENING RECESSION

The entire Europe is in recession. Never has economic situation so dire since WW2. And the data and statistics announced shows the US recession is getting worst. More pain is expected in the near-term as bleak economic reports roll in, flagging more bankruptcies, bad debts and layoffs. Unemployment rate is climbing towards double digits. Home and properties continued to fall. Foreclosures do not seem to abate.

Across the world, manufacturing outputs and exports keep shrinking forcing factories shutdown. Cargoes carrried by both ships and aeroplanes too drop dramatically. Trade collapse and a slowdown are forcing many governments in Asia to take extraordinary measures to boost the economy.

Across the globe, from developed countries and developing countries, stimulus measures were announced. America has just announced another 800bn dollars stimulus package. In fact many countries are annoucing stimulus packages for the second or third times, like the US. Surely, behind closed doors, government officials and economists will be wondering with trepidation, whether all these measures can actually turn the economy around. The danger is what to do if it doesn’t work. Too much at are stake, both socially and politically. There will be more sleepless night for everyone from central bankers to consumers struggling to pay off their mortgages and daily bills. I too have my doubts. The economic crisis is so severe and the deterioration totally uncontrollable. Government and economist have been behind the curve and are still behind the curve.

The measures so far are simply reactive. They seem only to address the problem of boosting the economy through spending. While this is not wrong, the world leaders need to move faster to tackle the roots of the problem. In my view, the world, especially the US needs to address the failure of banking system, falling home prices and foreclosure. But the hardest part is to rebuild confidence. Confidence is the most critical part of economic recovery. With job losses and bankruptcies mounting, sentiment on the ground is at its lowest. You can put money in the pocket, but you can’t put confidence in the heart. When confidence is shattered, it likes repairing a broken glass.

The world economy is doomed. Obama said, ‘Recovery will be likely be measured in years, not months’. If the US takes unprecedented measures to have a total solution to address the banking and housing problem, there is still hope. Only great leaders with great vision can motivate it people that there is hope. Great leaders can convince its people to take the pains to achieve a better tomorrow. This responsibility now falls on the shoulders of Barack Obama.






----------------------Living to see the world--------------------------------------