A recession has a defined meaning, from the USA’s NBER, via Wikipedia
A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.
Most define it as two quarters of declining GDP, but I’ve always preferred to be less analytical and more anaecdotal. Besides – the statistics tends to get revised a few months later, and you can find out too late that you’ve just lived through a recession.
So I’ve just been in the USA – and yes, there is a recession underway there. People are losing jobs, the general feeling is pessimistic (Obamarama notwithstanding) and the economic fundamentals are shocking.
Meanwhile the feeling in Perth is boom town – it feels like the USA did in 1999. Anything is possible and there is plenty of money for great ideas. Even housing prices are still high here, while the mining industry continues to frantically search for people. The Australian dollar is reaching for USA dollar parity:
and the major companies are rising on the markets. Here’s BHP Billiton (a client right now) on the US market:
All this is feeding into my future plans. Of course – is it better to be in a market where everything is doom and gloom, or where everything is rosy? I actually prefer to enter when everything is hard, because the ride u is so much better. So while I believe there is some weakness in the US economy yet, the underlying strength is astonishing.
Meanwhile Perth fails to take advantage of immediate prosperity, investing in dubious real estate options rather than focusing on how to outlast the resources boom. It often feels, here in Perth, like New Zealand before David Lange’s quiet revolution. e.g. Taxis and supermarket hours are still regulated, which means that you cannot get a cab nor shop when you want to. So post boom I can imagine the Perth will empty out pretty quickly, a nice climate does not compensate for a city stuck in the past, which is incredibly geographically isolated, a cultural wasteland, and wildly expensive.