Korean Job Discussion Forums

[raptorsfan]

http://ca.news.finance.yahoo.com/s/18082009/2/biz-finance-recession-recovery-feature-slow-growth-higher-taxes-imf.html

Looks like all those people predicting for economic armaggedon are wrong!

But nevertheless, the days of robust economic growths are over.

[gaffe]

Wooohoo! Let's celebrate! asmith - you are invited to my palatial estate for good times!

[cdninkorea]

I know people the world over are going to be mocking this announcement, but it's important to remember that the term "recession" has a strict economic definition: two consecutive quarters of negative growth. An economy predicted to grow 5% that instead only grows 0.5% for a whole year isn't in a recession, although people will say it is.

According to the loose, casual usage of the word, maybe the recession isn't over. But in the strictest sense, apparently it is (for now?).

[Jane]

The IMF is probably trying to offset any worry in the financial world. Plus, it's not surprising to see economies doing better thanks to economic stimuli in different countries.

Take for instance, Canada.

Canada set aside a stimulus package equal to 2.5% of GDP.

(Aug. 5) Canadian construction heavyweight Aecon Group Inc. (ARE-T11.060.242.22%) is finding new bidding opportunities are coming forward at an unprecedented pace that's likely the result of government economic stimulus packages, top executives say.

http://www.theglobeandmail.com/globe-investor/stimulus-measures-making-impact-aecon/article1242290/

To put it into perspective, any company that receives an input equal to 2.5% of revenue will show improvement.

the US overnight rate is still hovering between 0 and .25%, which means nothing has changed.

[E_athlete]

If the Canadian press reports something it's usually bull.

[benji1422]

Things have stabilized... but that does not mean things will get better. In fact they will probably decline or uptick slightly but basically we will have a lost decade.

There are some people who think there will be another dip. The false money the Fed and financial system pumped in last fall into all the financial institutions before the election was like a credit card which will eventually run out... then this time there will be a real crash. That is one theory.

But even if that never happens here is one thing to consider. There is simply no technology or anything in culture or society which will spark a recovery and great wealth to make people afford a post-WWII lifestyle again. Many of you were not alive during the early 80s but it was just as bad as it is now -- even worse because we had 10% inflation, de-industrialization, worse crime. But there was one thing looming on the horizon -- the computer revolution. That transformed capitalism and business was able to take advantage of it and make incredible strides in productivity which led to the boom of Wall Street stocks, easy credit, the go-go 80s, etc. It fell off but then came the internet in 93 and we know what happened there. Right now there is absolutely nothing happening in terms of technology or major transformations to build up some great wealth to get people out of the rut the U.S., N. America and W. Europe is in.

[Fox]

[tzechuk]

I would approach this piece of news with extreme caution.

[cdninkorea]

[saw6436]

I'm taking the IMF announcement with a HUGE grain of salt. I'm still looking at December or January.

[Sergio Stefanuto]

[4 months left]

There is no official defninition of recession, some say 2-3 quarters of negative GDP. Recessions are determined by a group, NBER in U.S., that look at various economic stats. China is technically in bear market now pulling back 20% after running up almost 100%. All fueled by moronic Keynesian spending. It will take a very long time to get out of the mess and most likely a 'W' shape with the first 'V' of the 'W' being formed here.

Korea has debt levels similar to Americans and their saving rate less than that of Americans (from the Economist) There will be no "pop" in Korea's housing bubble, it will be a "ka-boom."

Household Debt Risks Approach Record High


The soaring amount of household debts in Korea rings an alarming bell combined with the rising interest rates, according to a private think-tank Wednesday.

Samsung Economic Research Institute (SERI), a research arm of the country's top conglomerate Samsung Group, said that the risks of the household debts are feared to approach a record high.

``The amount of mortgages is jumping at an unprecedented pace despite the slumping economy and interests have started to go upward of late,'' SERI senior researcher Jeong Young-sik said.

``These put households at a great risk as amply demonstrated by the rocketing Household Credit Risk Index (HCRI), which is likely to ascend too much later this year,'' he said.

Involving various parameters such as the amounts of debts, interest rates, household incomes and default rates of credit card, the HCRI measures how detriment home loans are.

The HCRI, which is created by SERI, usually lies below 1 but it climbs above the benchmark when household debts become hazardous as was the case in 2003 and 2004.

Due to the credit card bubble burst, the HCRI peaked at 1.63 in the first quarter of 2003 and the figure also mounted to 1.55 the next year.

But the index got back on track as the economy stabilized before surging to 1.48 over the fourth quarter of last year in time with the global financial crisis.

``The HRCI subdued to 0.33 in the first quarter of this year and 0.59 in the second quarter as interest rates were low but the figure has a shot at rising to as high as 1.56 at the end of this year,'' Jeong said.

``In that case, Korea Inc. would experience big troubles. We need to take measures to prevent such a gloomy scenario, which can realize with a substantial possibility,'' he said.

In particular, Jeong took issue with the rising mortgages as the public enemy No. 1.

Indeed, mortgages increased by a historic high 22.6 trillion won for the first seven months of this year although the economy contracted by 3.4 percent in the first half.

``The rich liquidity prompted banks to extend mortgages to people. The low interest rates also prompted people to depend on the debt scheme. From the perspective of banks, mortgages are also a safe way of doing business,'' Jeong said.

``In the short run, the rising mortgages tackled the possibility of asset price deflation. But over the long haul, they might undermine the growth potential of the economy by increasing systemic risks,'' he warned

http://koreatimes.co.kr/www/news/biz/2009/08/123_50367.html