Whats the difference between a recession and a depression?

So, what is the difference between a recession and a depression? The old joke states: "A recession is when your neighbour loses their job. A depression is when YOU lose your job".
On a more serious note, whilst there is no agreed definition, a depression may be defined as a recession where real GDP falls by more than 10%. The last one in larger developed economies was the Great Depression of the 1930s, where unemployment in Australia got to 20%. Recovery from this was patchy, with another less severe depression during 1937-1938.
Normal economic activity did not return until 1940-1941. Since then the US has not had anything close to a depression. The worst recession in the last 60 years was from November 1973 to March 1975, where real GDP fell by 4.9 percent. 

Given the sober global outlook for 2009, Perennial’s latest projection is that our economy will have a mild recession with the second half of 2009 starting to see positive growth returning.

The experts are saying Year-on-year GDP growth for 2009 should be just positive (could possibly turn out to be slightly negative), with positive growth for 2010. Therefore, the view that this is NOT a depression. Whilst we believe unemployment may hit 7% at its worst, with 93% of Australians still employed, this is not near depression levels.
So, don't read too far into the media who suggests we are going to see unprecedented job losses, and all is doom and gloom for years to come. There is some hope in the near future.

Keep your clients up to date

There is alot of news coming and going about how terrible the economy is going, and the world market falling to bits, etc. But what does it mean to the everyday Australian?
Many 'ordinary people' who have minimal understanding of how markets and economies work struggle to relate this news to their lives.
This article, found in our Spotlight series is written by David Potts of the Sydney Morning Herald outlined gives a good explanation that is easy to understand and what some of the predictions are, coming from economists and leading financial authors. It may be something you want to pass on to clients or include in a newsletter.

Are you prepared and willing?

Welcome back to the working week, and I'm sure you've had a great Christmas period.
It's that time of year where gym memberships are at their highest and Non smoking ads are gracing our sreens more than Eddie McGuire. It's also the time when small business plans for the year ahead.

With all the doom and gloom talk that has been around for the past few months, what are you doing to make this year different than the last? We all want to increase business from the previous year, however many of us fail to put things in place to succeed at it.

We are committed this year, to providing brokers with quality marketing material for new and existing clients, and are happy to help with additional services if needed.

One of the biggest advantages many of you have over your competitors, is you current client base! There is a vast range of people who know and trust you, who NEED advice in areas such as insurance. Do they know you have access to insurance? We have some great, non-intrusive letters that can be sent to your client base, either via a newsletter, or just on it's own. There are several letters that can be used along with printed material, all with the option of having your own brand and contact details on there. Please contact me to get hold of it. We know this type of resource works. It's been tried and proven.

I would challenge you to try to be more proactive in your approach, not only to your core business, but also in areas such as insurance, to give clients more value by dealing through you. Successful brokers are in regular contact with their clients, and offer access to a range of financial services. This way, clients have no need to go anywhere else.

I look forward to working with you over the next 12 months. Let's make this a great year, and learn something new along the way.
Kind Regards,
Paul