Do you expect a double-dip recession?

Sentiment is running low, as evidenced from the above quotation by Bill Gross. Deflation risks are high and if by
accident the world economy recovers, it will be hit by inflation risks. But the reality for 2012 and beyond might
fall somewhere in between, which represents a safety net: slow growth with non-threatening inflation and a long
business and shipping cycle. With financial and shipping markets having discounted the worst in the second half
of 2011, the outcome may be a pleasant surprise on the upside, especially in 2013 onwards. This does not mean
that there are no risks to such a sanguine view of the world.

The downside risks, as viewed by the consensus, stem from the asset and debt deflation process that has hit the US ever since the burst of the housing bubble. The rest of the paper goes in great length to explain that the process has run its course and does not pose new risks to the economy. Should the income of households recover, the housing market would improve modestly. This is supported by evidence that nominal and real house prices have returned to the pre-bubble levels, houses are more affordable than ever before and the level of unsold stock of houses has fallen markedly, although it remains elevated compared to the pre-bubble level. Therefore, the consensus downside risks from US personal sector deleveraging may be exaggerated. Equally, the consensus upside risks of inflation stemming from the printing of money by central banks are equally exaggerated. Core inflation, which is governed by the spare capacity in the economy, will remain subdued because of subpar growth.

The true downside risks of the US stem from the high inflation that has eroded the purchasing power of
households. Notwithstanding this risk, as imported inflation is dwindling with the burst of the commodities bubble in mid-2011, the prospects of the real incomes of households have markedly improved. But new risks are emerging from the resurgence of the price of oil as a result of the intensified tensions of the US and its allies with Iran. If the price of oil were to mount to $150-200 per barrel and remain there for six months or more, which forms the basis of the risk scenario, then the balance would tip and the already frail US economy would fall into recession.

Europe will slide to a mild recession in 2012, as a result of the widespread austerity measures across the euro area
dragging down the US and China. US growth will remain subpar, but in the main scenario, namely barring the
explosion in the price of oil, the economy will avoid a recession. The most frightening risk factor, the breakup of
the euro, will probably be avoided not because politicians will change course and become more resolute than
before, but thanks to the ECB, which under Mario Draghi, is taking the initiative to defend the euro and the euro
area economy.

Today in my management class in Melbourne, Australia, we watched Inside Job, the documentary about the Global Financial Crisis. I was astonished at how these big banks are allowed to operate.

Fortunately, my country was no where near as affected as America and the rest of the world, and my heart goes out to those still suffering from recession and unemployment, whilst these big companies are being bailed out by the government, and their former CEOs being able to resign with $1M+ in their pockets during the mean time.

Something needs to be done...

Privatised banking system with its internationally state-sanctioned fractional reserve system is cause for perpetual "Booms & busts".

This is supported by neoliberal economic policies forced on "democratic" governments worldwide by the international banking plutocracy. Unjustifiable wars (financed by the banks) are also started with countries so as subjugate them to neoliberal economic invasion (e.g. Libya). The United Nations is party to all this. Etc, etc.

Go look at RT television showing Keisser Reports, etc. for what television news should be showing worldwide. But, of course, embedded journalism ("in bed" with the status quo) wouldn't show things as they really are.
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Growth is virtually non-existent at the moment and things are going to get worse - that makes a double dip a virtual certainty

From 2008 onwards political leaders failed to take effective action on banks gambling with other people's money. The notion that they can continue to privatise the benefits of this gambling while socialising the downside risks is simply untenable. Economic policy needs to promote sustainable business and remove the taxpayer guarantee from casino bankers.

It certainly looks likely now in the UK, at least. I'd be surprised if there are positive figures for growth in the current quarter.

The seeds of second recession already sown before the first one hit us. So the second one can not be avoided.

We seem to be sleep walking through the problems. No real cuts have been felt yet. Business is holding its breath in anticipation of something - anything big - happening. Britain still has a £1 trillion overdaft and overspends by more than 20% of its tax income. The population still carry huge personal debt. They grudgingly accept that something needs to be done - but reject any cuts - like spoilt children complaining, "Dad's redundacy isn't their fault", why should their trip to Disney be cut back.

Sorting out the deficit over ten years, still leaving us with £500B of loans, would have meant huge cuts backs in the order of 40%. It's this gap between the reality and actual small cuts, that threatens confidence. There is a sense that something big will happen soon.

The austerity measures being undertaken by governments in Europe are bound to stifle growth so I fully expect a double dip recession.

Deficit reduction is all well and good for the markets, but the jump from stimulus to austerity will play out badly in the long term.

I think it is a long-term short-term question:
short term, yes there will be a double dip.
mid term, yes there will be good times.
long term, I expect the world to change profoundly in 50 years, and this could well mean that the current industries need to be re-worked completely. Very interesting times to come when you are just graduating, very uncertain times if you base future expectations on what is currently available (pension? social security? ).
I doubt this change can even be labeled a dip.

QE2 announced on November 04(wednesday) envisaging stimulus at the rate of US$75 per month till June 2911 totalling US$600 billion will go into consumption or used in preventing foreclosures.The amount will not help in exports or in investmen leading to production. With the result the jobs will not be created and GDP is unlikely to rise.Hence double dip recession in my view.

I very much agree that we are in a double dip recession my pockets are empty unlike before thanks the david cameron

The regulations on mortgages are to strong, the head up the backside mortgage management can't get away with deceptive practices. Banking management are held accountable for mortgages and purchases/investments. The SEC will rain down on them.