Ed Morrison · Thoughts on the recovery

March 1st, 2009

NYT has compiled a good set of views on the prospects for recovery.

James Grant:

[B]ear markets end when investors give up hope..just don’t ask when.

Stephen Roach:

[I]t looks to me as if this recession won’t end until late 2010 or early 2011.

Michael Spence:

If governments are quick and clear in their intentions and intervene in a coordinated way in both the real economy and the financial sector, we will probably have an unusually long and deep global recession through 2010. If they don’t, it is likely to be worse than that.

William Poole:

Heavy-handed federal intervention into the management of companies from banks to auto makers will also delay recovery.

Eric Schmidt :

In early to mid-2010, as banks recover and begin to lend, we should see further progress with consumers taking advantage of the once-in-a-lifetime economic opportunities emerging from this historic collapse.

George Cooper (after discussing two measures of credit market correction):

If we go by the first measure we may see two or more decades of readjustment. If we go by the second, …the broader credit cycle will likely remain a significant drag on economic activity well into the next decade. Either way, we have a long way to go.

Niall Ferguson:

This is a crisis of excessive debt, the end of the Age of Leverage..At the moment, I find it quite easy to imagine two consecutive years of contraction. And I don’t rule out two more lean years after that.

Alan Blinder:

Here’s the hard truth: Nobody knows when this recession will end. Economic forecasting is a dark art, and predicting when recessions begin and end is its weakest link. That said, my best guess is that growth will return in the fourth quarter of this year.

Marcelle Chauvet and Kevin A. Hassett:

[T]he history books give us cause for hope.

The good news is that the odds of this recession lasting into the fourth quarter of 2009 are below 50 percent. But the dice will be thrown each month, and we could get lucky and be out earlier — or unlucky and be stuck in the doldrums.

Carmen M. Reinhart:

After the most severe banking crises around the world in the postwar period, the economy has taken an average of four years to return to its previous peak in personal income. After the Depression, it took the United States 10 years.

Nouriel Roubini:

Even if appropriate aggressive policy actions were undertaken — monetary and fiscal stimulus, bank clean-up and credit restoration, mortgage debt reduction for insolvent households — the growth rate would not rise closer to 2 percent until 2011. So this recession may last 36 months.

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