Friday, July 3, 2009

Looking more and more like an L-shaped recession

We might be heading into Japanese-style deflation territory according to Krugman (who has also invoked memories of the 1930s, arguably rightly so). Japan's economic meltdown occurred in the early 1990s, and has never truly recovered. Globally, as has been noted previously, the pattern has been largely deflationary. This particular "recession" (or whatever you want to call it) is going to be with us for a while.

Sidebar: since Thursday was the end of the work week (at least for those in government, and in the finance "industries") due to the July 4th weekend, it replaced Friday this week as the designated "bank closure day." We're now up to 52 bank failures for the year so far, with roughly half of a calendar year remaining. Interesting times, folks. Interesting times.

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