Is the Recession Almost Over?

This past weekend, while I was enjoying the beauties of nature — and the company of my family — in Idaho, the leaders of the G8 were having a meeting in Italy. Members of the G8 spent most of the time patting themselves on the back, telling each other that they had done a marvelous job of stimulating the global economy. Many of them began discussing “exit strategies” to counter the future effects of possible hyper-inflation as a result of rampant borrowing and quantitative easing.

At any rate, it is clear that G8 leaders think that the recession is very nearly over (if it hasn’t ended already). The IMF expects that the U.S. economy will begin growing again next year — albeit at a rather sedate pace. There was a great deal of optimism in general over the weekend. However, it doesn’t appear as though the markets are buying it. Equities around the world, as well as commodities are falling. While investors believe that the recession will come to an end, they do not seem to think that the economy will begin recovering as quickly as world leaders seem to think.

Jobs continue to be lost, and it appears that unemployment in the U.S. is likely to hit 10% before things start to stabilize. And housing prices still have not hit a bottom. Before true optimism with regard to the economy can be found, the labor market and the housing market need to reverse their current direction.

What do you think? Is the recession almost over?

Image source: Miranda Marquit