What we’re currently experiencing is not a recession (or a depression).
Steve Ballmer (Microsoft CEO) recently (Stanford UniversityMay 2009) said “...what we have been suffering through is no normal recession, but rather a reset to a lower level, a kind of severe rejiggering of the economy that has happened just four times in the past 200 years.”
There are also claims that not even economists could predict the events we have all seen as their models of prediction simply were outdated and not updated with information about new financial ‘products’ such as Collateralized Debt Obligations (CDO). In a way, I think many many people were blinded by the greed/growth being experienced – in this case it really does fit the cliche that ‘what goes up must come down’.
What’s the moral of the story? I hope more people become educated about money, where it comes from and how it’s used more than they do today. In a way it’s easy to blame the households that took out too-large mortgages underpinning the CDO’s but that would be glossing over the systemic problems brought about at many levels of the finance/banking industry that really showed how internally frail the whole system was. House built of sticks?