Will the Recession End in 2009?

Over the weekend, Ben Bernanke indicated on 60 Minutes that the recession would come to an end this year, and that recovery would begin in 2010. I found this very interesting, in light of the fact that some economists (including “Dr. Doom” Roubini) believe that this could be a 36 month recession — dating from December 2007. And, of course, whether or not you think the recession will end in 2009 depends on whether you believe Bernanke. Some of the stuff he’s said in the past has turned out to be less than accurate.

To be fair, the economy, markets and other finance-related items are very hard to accurately predict. This is because a change in perception or confidence (factors dependent on human emotion, which can be irrational and erratic) can change the outcome of the markets. Additionally, circumstances can change quickly, leaving one with inaccurate predictions. Bernanke knows this — which is why he was careful to hedge during his 60 Minutes interview. Some of the points he made about an end to the recession in 2009 include:

• A financial market recovery is vital. If financials don’t turnaround, the economy may not begin recovery by 2010.
• The end of the recession does not equal complete economic recovery. Bernanke takes pains to make it clear that the end of the recession will come when the negative trends stop.
• Recovery will likely begin in 2010. But not until after the negative trends that are causing the recession have ended.

I’d like to believe Ben Bernanke. After all, if the economy gets better, most of our personal finances are likely to get better as well.

What do you think? Will the recession end this year? And will your personal finance situation improve by 2010?

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