The credit crisis began to surface late in 2007 when the Dow was trading near 14,000. The Dow now sits below 7,000 and the economy is tumbling lower and lower each and every month. I still remember quite clearly the economists and the talking heads on television saying that this recession would likely be a short lived recession and talking of  economic recovery taking place in early 2009. Fast forward to early 2009 and not only has an economic recovery not taken place, the economy is in the worst shape it has been in yet. The housing industry started it all, but it has become spread across the entire economy now.

Lately many major economists, including the Federal Reserve itself, have lowered their economic projections for 2009 as well as future years. Ben Bernanke has said that he believes the unemployment rate will continue higher for quite some time and remain high through at least 2011. He also stated that he believes an economic recovery in 2010 is still possible, but only if are ailing banks are stabilized. The problem with that is those same banks were ailing badly more than six months ago now, and it seems very little has changed since that time. At this point it is hard to tell if progress of any kind is being made in the banking industry.

Even though the labor market continues to worsen and expectations are that it will take years to recover and the consumer confidence rate is at record lows some still continue to believe that 2010 will be a strong recovery year. I find it possible that 2010 will be a year where a turnaround could begin, but it will take a long time and it should be a very slow recovery. Remember that as the economy worsens these estimates of when an economic recovery will take place are likely to keep getting farther and farther out.