The world slipped into its worst recession since World War II with all developed economies facing contraction during the forth quarter of 2008 and the first quarter of 2009, therefore as the US experienced the worst 6 months that ended on 31 of March 2009 since 1957, Europe faced the worst recession since the start of the European Central Bank contracting by 2.5% in the first quarter, while Japan and UK saw the same scenario of contraction in their growth.

Some optimism is finding its way back into the markets as the pace of the economic contractions is slowing down shown by the economic indicators like the confidence indexes, the PMI or the industrial production levels giving hope that recovery will come no later than the end of this year.

The excessive easing in the monetary policy and the quantitative easing policies along side some governments interventions and stimulating plans  played a big role in this stability, as the US lowered rates to the lowest on record between 0.0%-0.25% as well as Europe which lowered rates to 1.0% and UK which lowered rates to 0.5%

If the expectations will turn out to materialize and the world will recover no later than the start of 2010 then it means that we witnessed a “V” pattern recession known as severe slowdown of the economic growth followed by fast economic recovery where the economy starts to stabilize and returns to its previous status, which could be the perfect scenario for a recession, and if China’s current expectations of a fast recovery this year this “V” pattern will be confirmed.

Unemployment levels rose sharply lately as in the United States and Europe reached to 8.9% while in the United Kingdom it rose to 7.1% meanwhile in Japan it reached to 4.8%, and the expectations still point to a further rise as the 8.0% rate in unemployment could become normal during 2010 and 2011 while the level 9.5% or even 10% could be easily surpassed breaking the figures recorded in 1980 when the US and some other economies fell into two consecutive recessions also known as the “W” pattern recession.

The “W” recession is a much worst scenario, known as a collapse in the GDP followed improvements resulted by the central banks interventions then again followed by another collapse in the GDP affected by the effects from the first recession, as the steps taken by the central bank that’s drive the economy out of recession while unemployment levels remain elevated while risk appetite and investments were still low driving the economy into another severe slowdown which could be in the same magnitude.

The path that the worldwide economy is walking into is very similar to the 80 scenario, and here we’re not referring to the causes we are talking about the symptoms since the worldwide Financial Crisis is severe and might cause damage that could reach to 4.1 trillion dollars as the IMF expects and so far only 1.5 trillion were lost.

While the unemployment levels are high supporting the “W” recession pattern, that’s why Obama’s administration concentrates on improving this sector while in Europe and UK policy makers struggle to support employment, however without some official data from this sector its very possible that the world economy could be heading towards a “W” recession that could cause considerable damage during 2010 and 2011.