The Recession Will End… When I Can Afford College

Says who: College Board, the not-for-profit responsible for the SAT, the PSAT/NMSQT, and the Advanced Placement Program

“Our studentPOLL study, a random national sample of high school seniors who registered and/or took the SAT, found that the recession is having a considerable impact on two-thirds of these students and their families. Nearly one-third indicated that their parents’ income had declined, 23 percent reported that their family had fallen on hard times, and one in six revealed that the current economic circumstances have forced them to change their college plans.” (via College Board)

Why it might be false: In a recent Gallup poll commissioned by student loan provider Sallie Mae, more than half of U.S. parents indicated that they plan to pay for all or part of their children’s college expenses with their current income and are confident they can continue to support them despite the recession…

The Recession Will End… When GM Starts Hiring Again

Says who: The 250,000 Americans impacted by fallout in the automotive industry (i.e. lost their jobs), whether they worked on site for the companies, at dealerships, or supplier companies.

Why it might be false: manufacturing is just 10 percent of the economy; not the 38.8 percent it once was, so what happens in manufacturing won’t move the needle nearly as much as it once might have. Adding jobs by any employer will surely offer a positive sign that the recession is ending, but it’s almost impossible for General Motors to offer enough jobs to crack that.

Why it might be true: If – and this is a big if – General Motors could hire back, and prompt its dealerships and suppliers to hire back – all the people it caused to lose their jobs, that would certainly do something for the economy: In a single swoop, it would lower the national unemployment rate from 9.4%. It would also be a sign that output is up, a key indicator of economic health…

The Recession Will End… When Staycations Are a Thing of the Past

Says who: Staycationers – those who have had to cut back on their normal vacation plans to far-flung destinations and chosen instead to spend their time off in their own backyards.

Why it might be false: Just because staycations are said to be the summer’s hot thing doesn’t mean that everyone’s doing them. In fact, cruises, campgrounds and destination spas are experiencing surges in traffic. Priceline.com’s recent 35% second-quarter profit increase contradicts the idea that staycations are dominating “time off time” and underlines that there are some great deals on the market. Even if staycationers aren’t spending a lot of dough on transportation or accommodations, they are still spending money and bolstering the local economies. In short, they aren’t as damaging to the economy as other spending cutbacks might be (like, say, on buying homes)…

The Recession Will End… When I Get My Damn Job Back!

Says who: 14.7 million unemployed Americans, some of who spend their days sending resumes, setting up networking meetings, scrutinizing expenses. Others have given up.

Why it might be false: There have been A LOT of predictions about a gradual and jobless recovery, ranging from Federal Reserve chairman Ben Bernanke to economist Nouriel Roubini. Housing indicators are rebounding well, with starts and sales climbing, and we’re seeing more consistent growth than in the past year. There’s a general consensus that the start of economic growth is projected to start in early 2010, lowly workers be damned.

Why it could be true: As recent as this Sunday, U.S. Treasury Secretary Tim Geithner noted that unemployment may peak in the second half of 2010 on ABC’s “This Week” program, and Larry Summers, director of the White House National Economic Council, also admitted that the jobless landscape will be in critical condition for a while…

The Recession Will End… in 2010

Says who: Ben Bernanke

“FOMC participants generally expect that, after declining in the first half of this year, output will increase slightly over the remainder of 2009. The recovery is expected to be gradual in 2010, with some acceleration in activity in 2011.” (via Federal Reserve testimony)

Why it might be false: Even if output, the total value of all goods and services the country produces, does increase before the end of this year, it won’t really matter unless someone actually buys all that stuff…

The Recession Will End… by 2010

Says who: None other than “Dr. Doom,” Nouriel Roubini, professor of economics at the Stern School of Business, New York University and chairman of RGE Monitor, an economic consulting firm.

“I have said on numerous occasions that the recession would last roughly 24 months. Therefore, we are 19 months into that recession. If, as I predicted, the recession is over by the end of the year, it will have lasted 24 months with a recovery only beginning in 2010. Simply put I am not forecasting economic growth before year’s end.” (via RGE)

Why it might be false: Not too long ago (a mere four months), Roubini was predicting an end not until December 2010 or so. And with his new call, he adds so many caveats that you almost think he’s hedging himself against getting it wrong. In line with his Dr. Doom image, he’s described the recovery as “very ugly” and “subpar,” and highlighted that, “It’s going to feel like a recession even when it ends.” While it’s a somewhat nice change to see him cautiously optimistic, he makes it hard to believe him…

The Recession Will End… in Six Months (End of 2009)

Says who: Wachovia

“In a clear sign that the economic winds have shifted, our recession model puts the latest probability of recession two quarters from now at 37 percent—down significantly from the 80 percent readings earlier this year…the results suggest economic recovery is likely in six months…our outlook is that the recovery will begin in the third quarter of this year.” Wachovia Economics Group

Why it might be false: Who are they to say? Wachovia itself won’t be around much longer as it’s absorbed bit by bit into Wells Fargo. But back to the data: The Wachovia prediction relies on an increase in consumer spending to support economic recovery…

The Recession Will End… Not Until 2011!

Says who: The World Bank

“While the global economy is likely to begin expanding again in the second half of 2009, the recovery is expected to be subdued as global demand remains depressed, unemployment remains high, and recession-like conditions continue until 2011,” said Hans Timmer, Director of the World Bank’s Development Prospects Group. (via World Bank report)

Why it might be false: Governments worldwide have announced about $2 trillion in economic stimulus programs, and China targets GDP growth of around 8% this year, keeping it in a position to suck in more raw materials and capital goods…

The Recession Will End… Later this Year

Says who: Richmond Federal Reserve President Jeffrey Lacker

“It now appears as if the pace of contraction is diminishing, and at some point later this year, activity will bottom out and begin expanding again.” (via Reuters)

Why it might be false: Well, for starters, how about those rising interest rates? Rates on 30-year fixed mortgages increased to 5.79% last Wednesday – that can’t be very good for the single family housing starts which have risen steadily since a low in January. And we think that generally, Lacker’s just a bit too U.S.-centric and myopic. Let’s not forget, the Treasury Secretary Timothy Geithner just met with his G-8 counterparts. The U.S. economy is not an island, it’s entangled in the global one – for better or for worse. Any prediction on the recession’s end can’t ignore international market indicators like a record loss of 1.22 million jobs in the 16-country euro zone in the first quarter.

Why it might be true: We’re not about to call these “green shoots,” exactly, but it seems like good omens that new jobless claims and consumer spending are no longer in freefall. Also, ten big banks are expected to start repaying the government bailout funds, a big sign considering that the financial industry played a big role in the creation of this crisis. On the global front, there are also some positive signs from China with industrial output increasing 8.9% and retail sales up 15.2%, at least according to the Chinese National Bureau of Statistics.

Our call: The end of the year is not completely unrealistic given the positive shifts in unemployment, consumer spending and banking, but it also depends both on how domestic and international factors play out. Either way, we’re going to have a little faith that the bank repayments are good signs that an industry that helped create the crisis will try to redeem itself and lead us out of it.

How a Banker Reinvented Herself

When I first met Vivian Chen, she was an investment banker. She had spent eight years working her way up the ranks to vice president. She had become an expert in her area of coverage, health care. Her staff numbered 100. And she had a global purview.

And then Vivian became one of the many casualties of the financial crisis. That’s when she came to see me.

I had been working in the public relations industry, with a focus on corporate communications. Since the recession began, I had also started to feel somewhat of a career coach, with so many friends of friends aspiring to move into PR. I found myself conducting informational interviews on a regular basis. Most of them were fairly standard introductory conversations, and I usually never heard from them again…