Crisis Forecast, One Year and 3 months Later (reality check)
Mar 5th, 2010
In the “Economic Downturn Magnitude and Duration Quantitative Study” we published in November 2008 a Crisis Forecast in which we established a few classes of “Measurements of Magnitude” for the crisis to come.
economic downturn recession Crisis preditction 2008
Now let’s analyze more in detail the case of Greece (not a G20 country, but a Euro country). What can be read in the news is that a “new round of painful austerity measures, including salary cuts for civil servants, pension freezes and tax hikes” is going to be undertaken.
Therefore we can conclude that Greece went from the class “Blues” to “Generalized Poverty” (see http://www.slideshare.net/Foboni/crisis-forecast-one-year-later). Generalized Poverty is characterized by high rate of unemployment (up to 10% -12%), poor to nonexistent maintenance of civil systems, reduced health programs, reduction of salaries of public officers, protests, some criminality increase, and some violence.
In our paper we defined the probability to see the next level, i.e. “Severe Impoverishment”, characterized by extreme rate of unemployment (over 12%), severe reductions of public transportation offer, gradual replacement of police forces with armed forces patrolling, reduction of state-managed retirement plans, with generalized protests and criminality increase, high violence etc…
Tagged with: assessment, crises, crisis, decision, demining, downturn, economic, management, risk
Category: Hazard, Risk analysis, Risk management
From “The Globe and Mail”, Sat. March 6th 2010, in “Report on Business” I read:
“…the Spanish economy- a collapsed housing market, a persistent recession, an unemployment rate of almost 20%…”
“…Greece, whose spending clampdown…included pension freezes and cuts to bonuses for civil servants”…
“…since 2008, a million Spanish workers have lost their jobs, nearly half of them in construction”…
“…(in Spain) taxes are rising,…and only one in ten retiring civil servants will be replaced…a process that could take many years and possibly trigger social turmoil, as it already has in Greece”…
It looks like you guys wrote the book ahead of time!
For the moment you are bang on target.
Bang on…and now, from Globe and Mail, Sat. March 13th
“Can Ottawa tame its beast”
“..after a mass re-calibration of the private sector that resulted in tens of thousands of layoffs, lost benefits and in some cases the destruction of pension plans, the pain is shifting to the sprawling public sector…governement, …education,…public entreprises.”
“…public sector employees now are afraid of just how far (cuts) will go…”
“…similar cases of austerity can be seen in Britain, Ireland, France, Germany, Italy, and the worst case scenario, Greece”
“In the US, at least 42 state governments have cut jobs, frozen new hires, slashed wages or forced workers to stay home whithout pay…”
“…in the US, where nearly 200,000 state and local government jobs have vanished since the recession began…”
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