Here’s an interesting article about the so called recovery….
There are two worries to spoil this improving picture. One is what happened after the third quarter. Mr Hoekman believes that there was a “distinct slowdown” in the pace of recovery towards the end of 2009. Preliminary figures suggest that the volume of world trade expanded by just 1.1% in November, less than the October increase of 1.4% and much less than the 5.4% rise in September. The bank reckons that the value of world trade (which is also affected by price and exchange-rate fluctuations) fell slightly in November. A rebound in shipments in and out of some of the world’s busiest ports also faded (see chart). Why would the resurgence have fizzled? The best explanation is that third-quarter growth was buoyed by the rebuilding of inventories, which were slashed in the depths of the crisis. That effect may have ebbed.
The global trade statistics paint a very clear picture of what the global economy is dealing with. In 2008-1Q2009 there was record levels of contraction. At this point every country enacted their own stimulus measures, with the most notable being China. It was obvious things had to improve off record lows and since the governments decided to do the bidding, things appeared to be improving. Combine this with inventory restocking and you have what appears to be growth. In the fourth quarter of 2009, we began to see these measures failing to improve the most fundamental measures and resorting to Plan B (protectionism). Now we’re at the stage where stimulus measures are set to run out and all the hidden problems will slowly re-emerge. There’s no surprise behind these numbers and we will see it spread to capital markets, deflation readings, real estate, and GDP before long. The W shaped recession is looking more likely by the day (except it will likely be a www shape).