There was grimly ironic celebration at this news from various quarters, considering the weakness of the growth could so easily slip back into another contraction next quarter; the sad little percentage highlights the pathos of recession semantics. A recession is defined as two quarters of consecutive contraction in the economy, so – hurrah! – this means that we can’t be in another recession until at least the third quarter of this year. But of course in real terms, the recession is unlikely to be over for some time yet.

I recently spoke to Christopher Pissarides at the London School of Economics about what he thought was happening to the economy. He gave reasons to be upbeat: “The housing market is reviving and companies that de-stocked will want to build up their stocks again. The policy response to the recession, both here and in America, has been good, Europe is not in as deep a recession as initially feared and China is growing fast. Britain should benefit from these and from the depreciation of sterling.” But overall, his outlook was sober and gloomy, firstly for the immediate health of business.

“No company wants to use up its own funds to invest now, discover that demand is still weak, and find that its bank is not prepared to lend it funds to carry on with its business. So companies are holding back on their cash and waiting until they see either a recovery of demand or until they can be assured by their banks that they will come and rescue them if they need more cash. It’s a chicken and egg situation and something needs to break it.

“Spending power will eventually get back to trend but it will take long to recover the losses suffered. In 1989-90, when the housing market lost a lot of ground too, it took seven years to recover the losses and start showing positive gains again. Nothing tells us that it will be better this time.” One of Pissarides’ peers at the LSE, Richard Jackman, also told me just how far we’ve fallen: “It will take years, probably between three to five years, to restore the economy to the high levels of employment and to reduce unemployment to the levels of 2006 or 2007.”

Secondly, the more general health of society is being seriously affected, and with effects that lag far behind the immediate upward shifts in the economy. On the same day as the recession was announced as being over, a statistic was published showing that a fifth of UK workers surveyed by HR body the Chartered Institute of Personnel and Development expected to lose their jobs as a result of the recession. This figure was part of a wider survey showing that job satisfaction was at an all-time low in the UK, with the CIPD also saying that unemployment figures masked the true impact of unstable work patterns and their effect on families and communities.

“We have learned a lot from the unemployment experience of the last serious recession, in 1980-83, and the costs of unemployment this time will not be as big as they were then”, says Pissarides. “I expect unemployment to continue affecting young professionals for one or two more years, especially those who trained to enter the lucrative financial sector. At the lower end of the distribution, unemployment causes crime and unhappiness and although government measures, such as the welfare to work programme, help a lot, there is still misery to be dealt with”. The psychological effects of the recession are already making themselves manifest – Raphael Healthcare’s Guy Bannister, writing in the Guardian in early January, said that the recession has been provoking substance abuse, suicide attempts and mental health issues in young people affected by it. His comments that are backed up by research last year at the Economic and Social Research Council, that found that the health effects of the recession are markedly worse in the young.

Considering the highs the economy reached prior to this recession, and the psychological effect that had on society with people becoming increasingly blithe about credit and fortune, we can expect the psychological reaction to our current lows to be worse than ever before. While that little 0.1% isn’t worthy of outright derision, it’s a reminder that we need to fill our lives with something other than personal prosperity, as it won’t be coming back for some time yet. And when it does, we need something else to fall back on once the cycle of bust inevitably renews itself. Pissarides posits a serious collective lifestyle change for us all: “Quality of life will not be measured solely by spending power, in the way that the Thatcher and Reagan governments of the 1980s made every one of us think, but by better health, environment and safety from international terrorism.” It may be corny cat-calendar philosophy, but quality of life can’t be measured in percentage points.

We sip wine, we gulp water. Good manners? Actually, basic economics. Water is relatively abundant and cheap, wine scarce and dear.

So if you’re a central banker, and you want folks to uncork their wine, you threaten to turn it into water (somebody already took the water-to-wine trick).

That’s essentially what many central bankers are doing: opening their cellars – or in this case, their vaults – and giving money away.

For its part, the Bank of England has created £175 billion of new money through ‘quantitative easing’ – buying assets from banks, thereby giving them cash. Factor in reduced interest rates, which should create new money by encouraging banks to lend more, plus government stimulus programmes. Add it all up, and such policies have pumped as much as US $30 trillion of new cash into the world economy.

Stack up that many dollar bills, and you’d get to the moon and back, four times. Now, just try to spend that. That’s the point. Print money faster than folks can make things to buy, and money will become cheap. Rather than watch our wealth evaporate, we’ll rush to spend our cash. And voila, the recession ends.

The problem is, too many of us have just come off a decade on the plonk. Spending outstripped incomes, debts rose, and we grew giddy on cheap money. Now, central banks are trying to push hair of the dog on us.

But there’s a problem. In a closed system, when you can either save or spend, and saving only depletes your wealth, for sure you’ll unload cash faster than it can disappear. But today’s economic systems aren’t closed.

Instead of getting zero interest on our savings, we can put them into ‘emerging-market’ funds though. The very poverty of the Third World means there are huge potential returns there. And policy changes in poor countries over the last couple of decades have created environments friendlier to business.

Is it any wonder, then, that a lot of this new money has been shipped out of the country? Institutional investors have been engaging in a ‘carry trade’. They borrow US dollars or pounds sterling cheap, then ship the money offshore. But this is not just a luxury market.

Retail investors have been putting money into mutual funds and, more recently, exchange-traded funds (ETFs). ETFs are funds that are broken up into units, which are themselves traded on exchanges. That makes it easy for small investors to enter and exit the market. Take Barclays’ ishares MSCI-emerging markets ETF, for instance: a punter who bought it at the start of the year will have made about a 60% return. Beats zero interest. But it also beats the FTSE 100 index, which has crawled barely over 10% since January. Not surprisingly, investors have been flooding in: Barclays’ emerging-market ETF has tripled its assets this year.

In the US, since the start of the year, ordinary investors have withdrawn about a tenth of their mutual-fund deposits in the local stock market, and have reallocated most of it to gold and emerging markets. In consequence, all ten of the fastest-rising stock markets this year are in developing countries, Peru leading the list.

Cheap wine can be bad wine. Make it too cheap, and we’ll start drinking pisco or caiprinhas instead.

The first wave of hesitant calling of the end came in May, with Jean-Claude Trichet, George Soros and others saying an inflection point had been reached, with the economy heading back upwards. A quarter later, and people are saying that the recession is genuinely, officially over (there needs to be two quarters of consecutive GDP growth for it to be semantically, if not realistically, laid to rest). Ben Bernanke, US Fed chairman and recent receiver of mad love and props, said yesterday it is “very likely over”, with a reported rise in consumer spending seeming to underline his soothsaying.

Meanwhile, “arc of insolvency” members Scotland are saying they’re on the way up too, Lloyds Scotland’s chief economist Donald MacRae claims; Mervyn King says all’s well south of the border too, claiming “there are now signs that growth has resumed in the third quarter”; Mandy gave his optimistic two cents last week in China; these folks that the Guardian memorably interviewed at the beginning of the year seem to be on the up; and Wachovia’s senior economist Mark Vitner has said that we’re firmly in recovery mode though added, while upholding the tradition of dodgy meteorological metaphors beloved of economists: “Technically, it’s not freezing but it’s still pretty darn cold outside and you see ice everywhere”.

Yes, that’s the ice of real-term economic misery he’s clumsily referring to – while all this is pretty impressive given the dire straits we were in this time last year, unemployment is still a major inhibitor on quality of life and consumer spending. While the City is looking at the GDP growth, the likes of Next are looking at the high street: “we anticipate that the public sector deficit will become the dominant influence on the economy, bringing with it the combined downside risks of further increases in taxation and cuts in government expenditure”. Brown’s use of the c-word yesterday means that things like tax credits and general welfare could be cut, and taxes brought up to fight the massive deficit, thus impacting on people’s spending power. Meanwhile Chris Dodd, head of the US Senate banking committee, bluntly burst Bernanke’s balloon, saying “I don’t think it’s over”.

So basically until you see banks are overleveraging themselves into multinational deals, and people blithely acquiring 110% mortgages and living on credit cards, you can assume we’re still in the “bust” bit of the cycle.

Kraft’s chief exec Irene Rosenfeld told analysts yesterday that “Given the complexion of the market and the global landscape, we believe it would be difficult for [Cadbury] to go it alone”. These two cats from the Wall Street Journal are saying the deal is definitely going to happen, in a vaguely homoerotic, suppressed bromance manner as they can’t seem to stop pawing at each other. And investors seem to think it’s going to happen too, sending Cadbury shares soaring yesterday. No doubt Hershey’s, Nestle, Kellogg and Pepsi, who have all also been linked with a deal, are indeed troubled by the idea of Kraft getting their hands on Cadbury’s, but whether Cadbury’s is just indulging them in order to drive the actual Kraft deal higher is another matter.

So with it looking like just a matter of “how much” rather than “if”, one analyst told Bloomberg, “We’re moving towards the end game of consolidation in confectionery” – in other words, the world is going to have just two or three companies worldwide making almost all of our teeth-rotting treats. It’s exhumed the old debate about homegrown British manufacturing, as another company looks set to sit alongside such Americanisms as processed cheese and Oreos – “it is really about what Britain should do for a living. If so many people are to survive on this small island we must do more than hawk shares”, says Carl Mortished in today’s Times. All the interviews with Bournville pensioners and sighing over purple foil suggest a certain amount of pointless sentimentality surrounding the opposition to this deal, but Mortished’s point is a good one – we’re giving up and cashing in before the race to new markets (India, Brazil etc) has even properly begun. Rosenfeld’s “submit, puny Brits” comments yesterday should be seen more as symptomatic of her steamrollering ambition, rather than any real forecast of Cadbury’s ability to survive in an ameliorating recession; Kraft make disgusting, oozing foods that only Americans will eat, while Cadbury’s make delicious chocolate that the whole world now seemingly loves.

But hawk shares we will, and the deal is a fillip for a City that has been twiddling its thumbs M&A-wise this year – Goldman Sachs, UBS, and Morgan Stanley are set to receive £100m in fees for putting the deal through, while Bloomberg reports today that Kraft are in talks to bag $8bn in financing via a bridge loan from Deutsche Bank and Citigroup.

So the deal looks like hoisting another American corporation onto the world stage at the expense of British expansion, with a bunch of non-British banks (with admittedly lots of British employees) coining it as the deal goes through. Sigh. Well, just as long as Kraft don’t shut down Cadbury World – as any child who grew up in Birmingham will tell you, it’s a museum where chocolate is fed to you in bar form at regular intervals throughout your trip, culminating in a frenzy of sugar-rushing school parties deliriously spending their pocket money on tat in the gift shop. There are cars shaped like Creme Eggs. If you ever want to create a high-margin business that embeds a semi-religious brand empathy in consumers from a very young age, build a museum in a chocolate factory.

To use one of our own though, the green shoots have been today sprayed with the Agent Orange of investor pessimism, and rather than sprouting blooms of resurgent global finance, are instead creating Venus fly-traps of PAIN! Yes, the much-touted “recession is over” vibes that have been percolating through the world of finance toward the waiting masses have been kiboshed over the last week or so, with investors cashing in on the mini-boom rather than believing it’ll carry on.

Confidence has been high, particularly with financial stocks as a leaner banking sector announced fat profits, but now, as one analyst told the FT, “People are struggling to justify lofty valuations”. “The smartest players in the US stock market – the top insiders who run public companies – are not betting their own money on an economic recovery”, said another. People are now converting stocks into cash, or betting on a fall in their price.

Given the extremely schizo state of various indices recently, this doesn’t spell certain doom for recovery, but unfortunately other indicators seem to point towards the world still being buggered. Unemployment, the main inhibitor of a resurgent economy, is constantly rising, with Seeking Alpha predicting a “protracted bout of nationwide systemic double-digit unemployment” in the States; the UK is faring a bit better, with the unemployment rate declining, though unions are warning that unemployment will continue to rise until the third quarter of 2010, and that this is going to be as bad as the 80s. 

The World Bank has revised its fortune-telling on the recession from what it said in March, and not in the way we want – it’s saying that the global economy will contract 2.9%, rather than the 1.7% it said before. Global trade will drop by nearly 10%, rather than the 6.1% it previously predicted.

And Nouriel Roubini, anointed sage of the financial crisis, is warning of a double dip – a slight rebound (i.e. what’s been happening recently) followed by yet another drop in the global economy. He’s particularly worried about the piles of money that have flooded the world in the form of stimuli and bailouts contributing to rampant inflation.

I can’t help but think the 24-hour news cycle is creating weirdly microcosmic cycles within this recession – the constant information feedback seems to breed an ongoing rupture in predictions, with long-term outlooks being updated every two weeks. Add to that the always-capricious stock market and the national obsession with house prices, and its enough to make you throw your hands up in defeat at trying to suggest an end for all this. It makes you long, as Gordon Brown did at the weekend, for a day with “no news to report”; better that than the cacophonous chaos of a world scrabbling for those green shoots.

They’re pointing to credit conditions still being unfavourable for businesses, but have at least improved their forecast from April. “We are past the worst but we can’t say with any great certainty that the recession is over”, said Richard Lambert, the CBI’s director-general. Lower incomes and higher unemployment are going to eat away at growth, thanks to none of us having any money to spend any more, or if we do, we’re putting it into savings. The expenses scandal has distracted government from tackling the recession more aggressively; Lambert expressed disappointment at credit not being given to the UK car industry when it’s been needed.

This is also the week when everyone crosses their fingers and hopes that people want to buy our debt. In order to keep public spending aloft, Darling announced that we’d be taking on record levels of debt to fund it. This involves selling it as bonds, and those sales are going to continue in a big way tomorrow, with as much as £5bn-worth being sold.

Even if we do return to growth, the impact on real people will lag a quarter or two behind; unemployment is set to peak in 2010, and then tail off throughout the year. There’s still a lot of pain to be had while recovery trickles down. Thanks a lot CBI! Bummer Monday or what.

But this news wasn’t imparted via Trichet punching the air and pouring big tubs of Gatorade over his VP Lucas Papademos, but with the rather more sober verbiage: “In all cases we see a slowing down of the decrease in GDP”. This faintly-praised damnation is what passes for optimism these days, but we’ll take it.

Similar semi-upbeat messages are emanating from the retail sector – value of sales at UK stores rose by 6.3% over April, the fastest rise in three years, compared with just 0.6% a month earlier. It can’t just be those Matthew Williamson bikinis that are doing it – that’s a serious amount of spending! And manufacturing too is, if not blossoming, then not wilting as forcefully as it was – the industry posted its smallest decline in 13 months. “A slight increase in UK GDP in Q2 is possible,” said Neville Hill, an economist at Credit Suisse told the FT. That could mean that the recession is officially over come the autumn. High fives all round.

Yesterday’s other optimists include billionaire investor George Soros, who said: “The economic freefall has been stopped, the collapse of the financial system averted. National economic stimulus programmes are starting to take effect. The downward dynamic is easing.” Barclays Capital strategist Barry Knapp said at the end of last week: “We appear to be in the sweet spot of a recovery”; Deutsche Bank’s George Buckley said yesterday: “total output would be growing again by as soon as June and would be back to its average rate of growth by July… The ‘green shoots’ phraseology might need to be replaced with outright ‘recovery’.” Germany are also potentially out of the woods, with the export market they’re so reliant on finally growing again.

But there are some party poopers. The Bank of England is set to contradict Alastair Darling’s upbeat take on the recession during his budget speech when it announces its quarterly inflation report this week. Meanwhile, HSBC chief exec Michael Geoghegan said yesterday: “We’re still in a recession. It’s still got some time to go”. In regard to the recent confidence in the banking stocks, he said that he would be “very, very cautious about the extent to which that continues”, and as if by magic, the market is heading back down, and there’s a feeling that stocks are no longer such great value. I’m blaming this on you, Geohegan! We nearly had it in the bag!

But despite contriving to make Web 2.0 seem dull and dogmatic, Darling’s confidence comes as there are a number of signs that the recession might have gone past its worst point. CBI announced today that GDP has so far fallen 4%, most of the 5.1% total that they forecast; they expect recovery to begin in a year’s time. 

They join manufacturing organisation EEF, who said: “For the past six months manufacturers have been grappling with a collapse in global demand, but attention is now turning to preparing for the upturn”. David Miles, of the Monetary Policy Committee, said last week that he saw “green shoots” in the economy. Also using that phrase are the head of the Dallas Fed, and Ben Bernanke, head of the US Federal Reserve, who used it last month on TV show 60 Minutes, and said: “Recently we have seen tentative signs that the sharp decline in economic activity may be slowing.” And much was made last week of Obama’s “glimmers of hope” speech, which, if you’re still given to taking his word as gospel, announced America’s passage into prosperity again. The stock market has been listening to all this and reacting accordingly. And housebuying is on the up too.

But don’t take out that 100% mortgage just yet, because various leaders have been queuing up to chuck a bracing bucket of cold water on these optimistic scenarios. The Organization for Economic Cooperation and Development (OECD) said on Saturday that the world was still in a period of “extreme uncertainty”, and that the recession would continue well into 2010. Obama meanwhile reformatted his botanical metaphors, swapping nice green shoots for a scary-sounding wood: “We’re not out of the woods. This is still a difficult time for the economy. Credit is still contracted”, he said at the weekend. Head of the European Central Bank, Jean-Claude Trichet, said: “I would not overemphasise whatever we are observing… let’s be prepared for a very difficult year”. Quelle bummeur!

But king of the pessimists is Paul Krugman, who reminds us via a bullet-pointed list that we’re still very much screwed: “1. Things are still getting worse. 2. Some of the good news isn’t convincing. 3. There may be other shoes yet to drop [??]. 4. Even when it’s over, it won’t be over”. That’s right – the recession is here to stay. Forever.

The economy is not a mob of zombies that is actually going about eating peoples brains, but the downturn has been associated with some very high profile suicides. They may not be a synchronized diving of suited businessmen from skyscraper windows, but there have been a series of deaths likely related to the economy. 

On these pages we’ve seen Patrick Rocca, who put a gun to his head in his home after losing nearly £500m; German industrialist Adolf Merckle who threw himself under a train after a short position on VW ended badly; and French financier Rene-Thierry Magnon de la Villehuchet who stabbed himself after losing big with Madoff. Add to them Chicago real estate mogul Steven Good and London-based financier Kirk Stephenson and you’ve got yourself a certified cultural meme. 

Jonathan Alpert, a Manhattan psychotherapist, says: “The identity of these people is so tied into their career that when it’s gone they don’t know who they are any more. These are high achievers, high earners, ‘Alpha Male’ types who have a good education, a good career, a high standard of living and suddenly it disappears on them and they have to re-evaluate everything.”

So if you’re used to the good life, it can be impossible to leave behind. Princess Luciana Pignatelli washed down a bottle of sleeping pills with gin at the age of seventy because she had lost what she believed to be most important: her money and looks. The author of The Beautiful People’s Beauty Book told friends “I can’t face being old and poor”, after learning all of her investments were worthless.

Unfortunately the money troubles faced by the incredibly rich can end up trickling down and affecting the more average person. Last month Major William Foxton, 65, scribbled a suicide note, marched to a park bench near his home and put a pistol to his head after he lost up to £1million to the Madoff fraud. ”People think econocide is a problem on Wall Street but it is also affecting people on Main Street, ordinary families who have lost their homes, their jobs, their savings,” says Dr Leslie Seppinni.

Dr Alan Berman of the American Association of Suicidology warns of the dire econocide-filled future we may face: “If the current recession lasts as long as the experts are predicting we expect we will see something parallel to the Great Depression. During the Great Depression, suicide rose by more than 50%, to 17.5 per 100,000 of the population.”

On a side note, the 1930s had its own suicide anthem in the form of “Gloomy Sunday”, said to be responsible for hundreds of deaths. But the noughties has gone one better, and we’ve got an actual band called Econocide, playing bedroom grindcore so awful that ending it all seems like the only method of truly cleansing your ears of the sonic memory.

All of this doom, gloom and econocide talk is absolutely depressing and inflated when lumped together like this, but at the moment these cases are rare. While the billionaires’ shame at not being able to provide for their employees can easily be replicated in an average family situation, let’s hope ordinary people maintain perspective. Just don’t listen to Econocide and you should be fine.

This generation is going to be, they say, like a wifi-enabled version of the “Silent Generation”, a term coined by Time magazine to describe people born during the Great Depression. They were characterised by a lack of zeal to accomplish the gung-ho stuff their parents had, stuff that reads like the spines of turn of the century adventure novels: “Few youngsters today want to mine diamonds in South Africa, ranch in Paraguay, climb Mount Everest, find a cure for cancer, sail around the world or build an industrial empire.” The equivalent today would presumably be: “Few youngsters today want to create vast multinational banks in Scotland, found internet companies without a business plan in San Jose, build hubristic new cities in the Gulf, or find a cure for cancer”.

Instead, they suggest the children will be feeling more civic duty during this recession, pointing to increases in signups to Peace Corps and Teach For America. In the 1930s, young people were taught to be prudent, turning into conformist parents that bred risk-taking offspring. Now, despite a pervasive feeling incubated by the age of credit of being able to have anything, it’s being suggested that this new generation will be equally prudent.

The article comes alongside a wave of warnings about the impact of the recession on The Kids. The Children’s Society warned last month about the psychological impact of a nation of worried parents; sociologists found that “with incomes dropping, parents fought more and drank more, leaving children bewildered and often alone” during the Great Depression. It’s been suggested that this generation will be less entrepreneurial, with a US poll finding that thanks to recession fears, fewer teenagers want to start their own business. And the Local Government Association is warning against a “lost generation” of young people created by the recession, who can’t get work thanks to lack of training and education; unemployment amongst 18-25s was already rocketing even before the recession really started to bite. In America, 2.2m under-30s have lost their jobs since the recession began.

University is probably a good bet right now, insulating oneself from the recession with a womb of skills consolidation, pub golf and bad sex – applications for next year are up 8%. But graduate recruitment is turning into a scrum for positions, and emergency plans are being drawn up to provide graduates with work. And while some go off to try and better themselves, others are sat on the sofa – we’ve seen how video games are surging in popularity as young people have less money to do properly fun stuff, and now an increasingly large proportion of TV audiences are in the 18-24 bracket. 

While it’s heartening to see evidence of the pampered Gen-X “worker” having to do some hard graft rather than lounge in a beanbag discussing last night’s Friends, there’s going to need to be some concerted public works and training programs to help young people get into work in the first place. Paid community service could work, but needs to be alongside education and not be presented, as the Mail inevitably does, as the only thing preventing a wave of violent youth crime.

With all this going on Roberto Cavalli still showcased his main line that featured a toned down version of himself, a big departure from his usual bright colours and animal prints. There was an array of suede miniskirts, cropped jackets and spray-on leggings - the whole combo looked almost armour-like, to metaphorically fight back against the economy. Cavalli said: “It’s not a time for romance. You have to be aggressive to win.” He added that he had “declared war on the (financial) crisis.”

A return to our hunter-gatherer roots was the predominant theme of Prada’s contribution. Drawing inspiration from the recession, designers attempted to take us back to utilitarian styles of the past, with colourful tweed jackets, sweaters and massive hip waders. I’m not too sure how the massive hip waders fit into the theme, unless they’re assuming we’ll soon have so little money that we are going to have to fish for our own dinner, and we can do this with our stylish new Prada hip waders. Who would have thought that the concept of absolute poverty could be made to look so posh? 

The collection was also filled with very sensible and scratchy looking tweed suits; just like the Milan menswear lines, they pointed at a frivolity-free future. The models were haunting with their overly teased hair and ghostly pale faces; maybe their faces are sombre due to the uncertainty of the week itself, or maybe it’s the fibre-pill-and-cocaine breakfast they had. 

So the theme in Milan seems to be wearable pieces, driven by the economy, but the paradox is that the collection is designed for the elite few that can actually afford to buy a simple sweater and some hip waders for an outlandish amount of money in order to prepare for an economic collapse. Most of us would have to sell everything we own and actually take up fishing to feed ourselves just to afford one of these low-key pieces, which doesn’t seem to help.  

The difference between the fashion collections was significant as we discussed previously, New York’s fashion week was aggressive and took a frightened attitude toward money troubles while London laughed in the economy’s face with its ridiculous “mashups” and technicolour palette. Now Milan is taking a conventional approach. What is next? Space suits for the elite to move to the moon with? Zoolander-style “Derelicte” where the fashionistas and hobos look one and the same?