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How Long Will The Current Financial Crisis Last?

 This is of course a question who matters to all of us, not only to the investors who read the blogs. As such, we have therefore done a survey to find out among our experts how long will we stay in this financial black whole. And the results were quite interesting…

Some people say that
“The bottom of this market will not be until at least Fall 2009. There will be at least 2 more quarters of negative GDP growth. With or without the financial crisis, there is a predicatable 9-year cycle (+/- 6 months) in the economy which is repeating. Once this recession is over, there will be another period of growth, ending in another slowdown around 2019, 2018, and so on. Thus, if you check, you will see that prior slowdowns/recessions happened around 1973-4, 1982-3, 1991-2, 2000-1.” So the current financial crisis will last u8ntil the end of 2009, with all the consequences – low assets prices, companies going bankrupt, low consumption and hight jobless rates.

Others think that the crisis will continue for the short term, albeit we have seen the worst of the macroeconomical shocks. Most of the surveyed experts seem to think that the governments invterventions in the current crisis all over the world might be helpful. Although there is no definite feeling of how helpful the governments bailouts are…

Other experts think that the current financial crisis will sure last couple of years. “There are lots of similarities between the current crisis and the crisis in 1929, however the reason is different. I think, that we can expect, that financial and stock market will calm down during the next months, but we can’t expect substantial growth in next two years. You can observe already now the lower orders (especially obvious for carmakers now) and that will lead to significantly lower profits in next years.”

One interesting technical opinion says that the workd must undergo through this huge process of deleveraging until the end of it. In other words, it is done when it’s done, not sooner, not later. Some experts surveyed by us made a refference to Japan, which takes already more than 10 years to recover from its wide-ranging stagflation crisis 20 years ago.

Article originally published by, to be continued

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