The Great Recession happened in the world economy less than ten years ago.
It was the most widespread and deepest downturn the world has experienced ever since the 1920-1930’s Great Depression.
Since 2008, when the stock market crashed the recovery process has been very slow and long. It experienced multiple challenging obstacles along the way.
However, there is still a successful improvement in the economy.
Over the past five years, the S&P 500 index gained more than 92%. It was during the second half of 2015 when the market saw a rapid turn for the worse.
This year, the S&P 500 index is currently 9% down since the beginning of 2016.
Unemployment rates in the United States have decreased dramatically. During the Great Recession, it was nearly at 10% but today it’s at only 4.9%.
Today, let’s take a look into some details.
STOCK MARKET CRASH IN EUROPE
STOCK MARKET CRASH IN EUROPEThe Great Recession in Europe was followed by the sovereign debt crisis. It is a persistent issue since Europe plays an important role in the world economy.
Extraordinary measures to implement quantitative ease with regards to the Eurozone is being made by the European Central Bank.
The PIIGS nations which includes countries such as Spain, Portugal, Italy, Greece and Ireland have been repeatedly bailed out by the IMF and European Union.
The collapse of the euro currency will cause a widespread disadvantage in the entire world economy.
Recession is very likely to happen.
CHINESE ECONOMY
Over the past few decades, the Chinese economy has advanced in an outstanding progress. The Chinese GDP is considered second in the world to the United States.
A lot of economists believe that in the future, China could potentially overtake the United States. The government of China strictly imposes capital controls.
This is to ensure that their money is kept within their borders. As a result, when the Chinese middle class grows, they’re only given a few options to invest their new wealth.
Real estate and stocks have become very expensive.
The Chinese government is taking cautionary measures to prevent recession. In their desperate attempt to counter volatility, the country has implemented circuit breakers which would stop all trading in China if stock exchanges reach 7%.
Globally, we are on the verge of another potential recession. The Stock Market Crash 2016 data explains some causes which contributed to the current economic problems.
Economic data patterns are showing signs of weaknesses which could trigger the market to go further downhill.
Central banks these days have less control over their policies and strategies in preventing the occurrence of a recession. However, they are an inevitable part of the normal macroeconomic cycle within the world.