What is your take how long can this recession last ? and How fast will recovery be.

No one knows. No one can tell for sure. Imagine the worst and plan accordingly.

QuoteOriginally posted by: vbprogrammerNo one knows. No one can tell for sure. Imagine the worst and plan accordingly.The worst says this going to be a depression, for which no body can prepare.

No one knows. My concern is that, at least in the US, business cycles have been marked by swings in two of the major industries, housing construction and auto production/sales. Housing construction is at the lowest level since records have been maintained, or so I've read. It may have a sharp percentage bounce soonish but the oversupply is staggering. The auto industry in the US, in my opinion, is beyond mature and is in overall decline. Market share will just continue to shift though. So if the runup to the 2001 recession was fueled by the dotcom boom, in which few people really benefited at the end of the day, and the last boom was fueled by ridiculously low interest rates that caused excessive housing speculation, my quesiton is what will be the leading sectors in the next upturn? I guess I'd be happy with a return to the general business cycle, but I don't see the catalysts for an expansion in the next year.

I'm expecting a U-shaped recovery in which we have a month of lackluster performance for every month of increasing unemployment (asset bubble recessions take much longer to fix than do business cycle recessions). If the job losses stop this instant, the recovery will start around Dec 2010. But I don't expect the joblosses to stop this instant (the entire auto industry is still too fat, airlines have too much capacity, housing hasn't hit bottom, banks will face conditions more adverse than the adverse scenario). Each additional month of of losses means two months of poor economic performance. At some level, the recession's duration or the recovery's speed is not relevant to individuals because the economic trajectories of individuals are far more diverse and divergent than are the trajectories of companies which are, in turn, far more diverse and divergent than are the trajectories of economies. Even if we face a true depression, some people (and companies) will find jobs, opportunities, and profits.

QuoteOriginally posted by: prasenjit0211QuoteOriginally posted by: vbprogrammerNo one knows. No one can tell for sure. Imagine the worst and plan accordingly.The worst says this going to be a depression, for which no body can prepare.You could by keeping your money as much as possible.Moving to a less expensive neighborhood or renting a cheaper apartment. Alternatives are also that you could move to less expensive state or another country which is relatively less expensive or where the dollar would go longer.Alternatives are also to go back to school or enter a career like health care and education that is not so much affected.

prasenjit0211 is right, we might even define a depression as a recession where planning is pointless.I am waiting for the day that someone on TV calls it the worst recession "since the fall of the Roman Empire..."But...We aren't there, and the indicators are pointing up, or at least not very down in the mid term.Property and autos are good measures of the economic cycle, but not great predictorsI'd go further, I agree with KTE that the US car industry has not been viable since the late 1970s, and resembles the smaller but equally stupid British car business.Both bought off unions with unsustainable deals and produced really quite remarkably shit cars. America can produce craft that probe space, plumb the ocean depths, and hurl missiles across the world to kill people with an accuracy better than most people could manage with a handgun on the person sitting next to them. It can produce drones that can fly for days on a fuel tank, then play terrorists at chess for their lives, with certainty of winning. But when presented with the task of producing a car that can turn corners properly or accelerate, GM & Chrysler act like they've been asked to produce a Warp Drive. Such are the low expectations of US car buyers that when Obama asked US manufacturers to achieve the pitiful fuel economy achieved by Porsches and off roaders like the Range Rover, many American consumers genuinely believed that driving such "flimsy" vehicles would be more dangerous than driving a "Jews for Jesus" truck through Baghdad.It is not a coincidence that America's part in Formula One car racing is as strong as it is in Cricket.America can't do cars. I can't fly a helicopter gunship, cook a souffle, or do Origami.I can live with that, the US must do the same.99% of world economic activity is not making cars.

As long as capitalism survives. Even if we're able to reinflate the credit bubble, it won't be sustainable.

If someone was able to answer your question with full accuracy, how would it help you? I think a better question would be; how could someone with a quantitative background and perhaps some capital make profit during a recession like this one?As long as the recession last and businesses are going bankrupt, there is a lot of money to be made by new players in the market. I see recessions as times for opportunity.

Well, at least in USA, stock market bottomed out in March 2009. Macroeconomic indicators will bottom out in October 2009. Unemployment will peak at about 11% (from 3.9%) in March 2010. Unfortunately, there will be no strong recovery like what happened in the 1990s. All macroeconomic indicators indicate that economy and stock market will move sideways for the next 10-15 years. This is similar to what happened in Japan. Japanese NIKKEI index is currently 30% lower than what it was 25 years ago and Japanese economy has stagnated in this period. This year Japanese economy will contract by 12%. Larger percentage of this shrinking economy is healthcare, which is basically taking care of old, sick, unproductive people. Expect the same thing to happen in other Western economies. People will live longer and the only sector of the economy which will show strong expansion is healthcare. If you want a secure job for life, retrain as a Nurse or Doctor and take care of the old, retired, sick, people. If you are picking sectors for investment, healthcare is one sector where you cannot lose.

QuoteOriginally posted by: DominicConnorprasenjit0211 is right, we might even define a depression as a recession where planning is pointless.I am waiting for the day that someone on TV calls it the worst recession "since the fall of the Roman Empire..."But...We aren't there, and the indicators are pointing up, or at least not very down in the mid term.Property and autos are good measures of the economic cycle, but not great predictorsI'd go further, I agree with KTE that the US car industry has not been viable since the late 1970s, and resembles the smaller but equally stupid British car business.Both bought off unions with unsustainable deals and produced really quite remarkably shit cars. America can produce craft that probe space, plumb the ocean depths, and hurl missiles across the world to kill people with an accuracy better than most people could manage with a handgun on the person sitting next to them. It can produce drones that can fly for days on a fuel tank, then play terrorists at chess for their lives, with certainty of winning. But when presented with the task of producing a car that can turn corners properly or accelerate, GM & Chrysler act like they've been asked to produce a Warp Drive. Such are the low expectations of US car buyers that when Obama asked US manufacturers to achieve the pitiful fuel economy achieved by Porsches and off roaders like the Range Rover, many American consumers genuinely believed that driving such "flimsy" vehicles would be more dangerous than driving a "Jews for Jesus" truck through Baghdad.It is not a coincidence that America's part in Formula One car racing is as strong as it is in Cricket.America can't do cars. I can't fly a helicopter gunship, cook a souffle, or do Origami.I can live with that, the US must do the same.99% of world economic activity is not making cars.Interesting post. I agree with most of it. I will add that on an equal playing field, America cannot outcompete the Germans, or the Japanese. They're simply not that industrious...But, America still keep winning. Why? Because the US usually get there first. That was exactly the case with autos (got there first, made lots of dough, but when the japs/germans caught up, it was basically over). That is why innovation is so crucial to this country, if it doesn't innovate, it loses. So far, the US is still winning though.

QuoteOriginally posted by: traderjoe1976 All macroeconomic indicators indicate that economy and stock market will move sideways for the next 10-15 years. Can you give some references where I can find the results for macroeconomic indicators.

QuoteOriginally posted by: DominicConnorI'd go further, I agree with KTE that the US car industry has not been viable since the late 1970s, and resembles the smaller but equally stupid British car business. american cars may not be as good as japanese and korean cars, but our cars beat british cars, ha!

QuoteOriginally posted by: traderjoe1976All macroeconomic indicators indicate that economy and stock market will move sideways for the next 10-15 years.What indicators may these be? Also, I don't buy deterministic models of economics. What the economy is going to be like on 10 years depends on the decisions that are getting made in the next year. In October-January, the government made a set of crucial decisions that prevented a total collapse of the financial system. There are still a ton of decisions left to me made.QuoteThis is similar to what happened in Japan. Japanese NIKKEI index is currently 30% lower than what it was 25 years ago and Japanese economy has stagnated in this period.And Fed policy in the the last few months as been based on a "do something different from Japan". The US has down some massive loan write downs and de-facto bank recapitalizations, and has not used regulatory forbearance. Also, US banks do not own stocks, which prevented the sort of problems that Japan had.QuoteLarger percentage of this shrinking economy is healthcare, which is basically taking care of old, sick, unproductive people. Expect the same thing to happen in other Western economies.I doubt it. Japan has an aging population because it has some extremely restrictive immigration policies. It's very unlikely that the US is going to run into the same sorts of problems. The US age structure is relatively young because of immigration, and having a President whose middle name is Hussein throws open the welcome mat. Now if the US changes immigration policy, then you do risk a Japanese style situation, but that goes to my point that history isn't deterministic.

QuoteOriginally posted by: vbprogrammerNo one knows. No one can tell for sure. Imagine the worst and plan accordingly.That's actually pretty easy. Hide some gold coins in your house, learn to fire a gun, and you are in good shape to confront a total breakdown in civilization. Once you've prepared for the worst case scenario, then you have to think about what to do if things don't totally break down.