As you all know the crisis began in the US because of indefatigable consumption which has been urged by local banking credit system. Society of consumers at a certain point in time weren't able anymore to swallow another big bite and started to choke. To the joy or sorrow of anti-globalists (they were right as usual) the rest of the world also started to suffer. As we see from the history, volatility (disposition towards drops) is always higher at developing markets rather than at developed ones. As inter-consistency of economic indicators of various countries is constantly growing, we all saw how hard the crisis hit the rest of the world even harder than the US.
Many experts of economic science stated right after the crash that they saw it coming. Here we want to turn back to the previous recession of 2000-2002. It was a whole different story of course, but let's remember the panic we saw during those days and all the statements that the whole world economy was about to crash. Positive growth happened in 2003-2007 however stroke through all the pessimism and possibility of another recession wasn't taken into consideration. At least by the majority of experts. Official economic science wasn't expecting this crisis. They thought that some consequences may occur, however no one had an idea that it would be that deafening.
Economists like to make forecasts based on trend analysis. This can be explained by the fact of good knowledge of linear law of economic development when market dynamics aren't affected by structural alterations. Demolition of trends however confirms this theory very clearly. Many would say that there are many good ones which are various in non-linear dynamics, lice cycles theory for example. And that Kondratiev predicted everything almost 100 years ago when he came up with his paradigm about global non-cyclic changes in the economies connected to the technology revolutions. These are all true however the issue is that non-linear dynamics are very hard to predict and contain many parameters ones that are tough to predict and ones that are casual by their nature. Same time cycles have been defined with about 20 years precision. So, economists may describe a qualitative picture, especially after some time, however its much tougher to give a quantitative forecast.
Stability of economy recovery after the crisis.
Due to weak macroeconomic data the last couple of months we hear quite often that we should expect restrained and weak recovery of the world economy. Let's see what is going with the global markets that make economists think that way. Several facts:
Stock exchanges aren't able to go on with a rapid positive dynamics of the last year;
Consumers cut their expenses, real estate construction business is barely alive;
GDP for the second quarter of 2009 is +2.4% against +2.5% predicted;
Unemployment rate is way above the forecasts.
This data shows that enthusiasm about quick recovery has run dry. Sure the global economy shows positive trends, however these trends slow down substantially this year and the stock exchange market shows it perfectly. Volatility of the markets have grown high, investment risk remains high (2-3 times higher than values we had 6 months ago, however not as extreme as we've seen a year and a half ago).
Nevertheless slow scrambling up is much better than a free fall.