Here comes the Great Recession

As the West turns to saving and paying down debt after its borrowing and spending binge, so we enter a long recession similar to that suffered by Japan. But unfortunately for us, things are much worse than they were for Japan.

The news is about as bleak as it can get and has "Depression" written all over it. The IMF last week when lowering its forecast for global growth this year from a tiny positive number to a negative one, said that it will be the first time since 1945 that the global economy has contracted and that we are in a "Great Recession" a term that sounds like they are trying to avoid using the word "Depression" but realise the word recession on its own just doesn't do it.

As we have said before, it is all about the news being in the market or not being in the market; the particular news that we are talking about is unilateral retrenchment. Companies' and consumers' abandonment of the bad habits of borrowing and spending and a returning to saving and paying down debt.

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