European Economic and Monetary Affairs Commissioner Joaquin Almunia presents the spring economic forecast during a news conference at the EU Commission headquarters in Brussels May 4, 2009. Europe's economy will not start recovering until the second half of next year, the European Commission said that week, as it slashed its forecasts to reflect the region's deepest recession since World War II. (Francois Lenoir/Reuters)

The Great Recession of 2009

One step forward, one step back?

By Thomas Mucha
Published: May 16, 2009 06:45 ET

BOSTON — For those paying attention to the global economic meltdown, this week started pleasantly enough.

On Monday, European Central Bank president Jean-Claude Trichet said the global downturn had bottomed out. The world economy was around the “inflection point,” he said, with some economies already turning higher.

“In all cases, we see a slowing down of the decrease in GDP,” Trichet beamed. “In certain cases, you see already a picking up.”

Trichet’s buoyancy was accompanied by a report from the Organization for Economic Cooperation (OECD), which noted a “pause” in the economic contractions of the U.K., France, Italy and China.

Two days later, there was even some hopeful news out of struggling Japan, the world’s second-largest economy. The country’s central bank governor, Masaaki Shirakawa, said the Japanese economy is showing signs of recovery and is expected to stabilize by the end of the year.

Throughout economic circles there was a sudden lightening of the doom and gloom that has darkened much of the world the past eight months.

Former IMF chief economist Simon Johnson and Peter Boone of the London School of Economics co-wrote a piece in The New York Times Economix blog that argued, in part, that “the restoration of confidence is due to a targeted and appropriately sized fiscal stimulus” by the Obama administration.

“This is a major achievement,” Johnson and Boone wrote. “We cannot emphasize enough how bad the world’s financial markets have looked at various points since September — including during the first month or so of President Obama’s administration. Market attitudes have changed profoundly since the beginning of March. It’s no longer ‘sell the collapse’ but much more ‘buy the dips’; this is the essential ingredient needed to stave off bank runs and to keep markets from spiraling downward in self-fulfilling collapse.”

Comments:

No Comments.

Login or Register to post comments

Recent on Commerce:

Gay sex on film? No problem. Baring political rifts? Problem.

Patrick Winn - Thailand - November 7, 2009 11:27 ET

Live and let live in Thailand. Except when one gay man is Buddhist, and the other is Muslim.

China and Costa Rica move toward free trade agreement

Alex Leff - Costa Rica - November 7, 2009 11:01 ET

China wants ties in the region, Costa Rica wants Chinese goods. But not everyone's pleased.

Indonesia: Corruption junction

Peter Gelling - Indonesia - November 6, 2009 14:02 ET

A corruption scandal hits — you guessed it — the country's anti-corruption commission.

Easter Island: even more difficult to get to?

Pascale Bonnefoy - Chile - November 6, 2009 06:42 ET

Indigenous population considers limiting visitors and immigrants to one of Chile's top tourist destinations.

Design within reach

Daniel Grushkin - NGOs - November 5, 2009 17:36 ET

Cameron Sinclair founded Architecture for Humanity to bring thoughtful design to the world’s neediest.

The asses of New Delhi

Jason Overdorf - India - November 5, 2009 05:41 ET

With a year to go before hosting the Commonwealth Games, Delhi targets the poor. Its donkeys, too.

On Location: Haryana — India's looming food crisis

Jason Overdorf - India - November 2, 2009 17:30 ET

Tweeting from Fugitiveland

Patrick Winn - Thailand - November 2, 2009 06:35 ET

Thailand's ex-premier is on the run. And he wants the Twitterati to know about it.

In Taiwan, pro baseball is all mobbed up

Jonathan Adams - China and its neighbors - November 1, 2009 10:27 ET

For some professional players, losing is an offer they can't refuse.

The world's biggest problem: Our hungry planet

Thomas Mucha - Commerce - October 31, 2009 08:42 ET

Global hunger just got worse. What can the dismal science do?

In India, C-sections are in the stars

Mridu Khullar - India - October 31, 2009 06:00 ET

When's that baby due? The astrologer knows.

Shackleton's whisky, lost then found

Emily Stone - Commerce - October 30, 2009 18:33 ET

Explorer Ernest Shackleton loved his Scotch whisky and he left a stash at the bottom of the world.

Whisky on (Antarctic) ice

Emily Stone - Global Green - October 30, 2009 18:28 ET

Explorer Ernest Shackleton loved his Scotch whisky. And he left a stash at the bottom of the world.

Exploiting the motion of the ocean

Colin Woodard - Canada - October 30, 2009 09:35 ET

Energy companies are trying to turn eastern Canada's coast into the Saudi Arabia of tidal power. Critics fear for the fisheries.

Interview: India's Foreign Minister S.M. Krishna

Saritha Rai - India - October 29, 2009 15:37 ET

What does a rising power think about China, Obama, the Taliban, Pakistan, Afghanistan and more?

Child sex boom fueled by poverty

Deena Guzder - Thailand - October 29, 2009 11:24 ET

It's just another dark day in Thailand.

Debating the daddy state

Nick Miroff - Cuba - October 27, 2009 05:54 ET

As the economy slides, Cubans have been asked to rethink socialism.

Whose line is it, anyway?

Laura Fitch - China and its neighbors - October 26, 2009 05:46 ET

What's the best way to cope with the migrant life in China? Improv theater, of course.

Argentina's Slaughterhouse Blues

Charles Newbery - Argentina - October 25, 2009 11:13 ET

In the name of domestic politics, President Kirchner is alienating investors and squandering her country's reputation for premium beef.

British politics: The cookie crumbles

Barry Neild - United Kingdom - October 25, 2009 11:08 ET

Will the U.K. government finally fall over thanks to Biscuitgate?