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An informative article:

http://biz.yahoo.com/cnbc/081024/27345291.html?.v=2

Points to note:

1) Credit crunch has accelearated the impact of recession on retail leading to an accelerated pace of bankruptcies. I think it gives very little time to adjust to the changing realities and create sudden hardships and a seeming larger impact of the recession. The positive could be a relatively faster rebound as compared to similar such recessionary pasts. The negative could be ddeper pain and loss of investor and consumer confidence needed for a rebound. How the two balance out would be interesting to note.
2) No accelerated hiring in the bull market of 2003-2007 in contrast to the dot com era.
3) No inventory pile ups.
4) Wide spread recession: more than 50% of the states in the US and of course globally. Reduced mobility due to collapsed real estate further exacerbates the situation that could be defused with migration to better performing regions. In some sense finding jobs could be easier for those willing to move due to reduced competition caused by loss in mobility.
5) Permanent job destruction in financial services and homebuilding. Some other sector must ramp up to absorb in these people.

It seems to me that many companies took the lessons they learnt in tech crash seriously and have managed better with moderate rises in hiring or inventory build up. But at the same time a lot of these companies got screwed for no fault of theirs due to credit crunch.

What I find interesting is how quickly the fear of inflation have vanished and are being replaced with deflationary fears. There is no dount that commodity collapse has contributed to this sudden shift. And maybe this is a blessing in disguise as it eases the pain on broader economy. Similarly the fall and rise in Dollar has been no less fascinating. Although the conditions that led to a falling dollar still exist and yet the dollar rose primarily due to the collapse of european economy and too much betting against the dollar on a global scale. It is almost like the stage being set for chinese currency to become the next global currency backed by a far robust economy.

Anurag
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