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"The best that can be said for 2009 is that it could have been worse" - Joseph Stiglitz, in China Daily

That pretty much sums it up right there. I have been looking through some of our posts from late '08 and early '09 and things looked pretty grim on a number of fronts. But the year did not turn out quite as badly as it could have. Let's have a look back at some notable items from the world of economics in 2009, shall we?

Some Statistics from 2009
# of US banks shuttered by the FDIC: 136; the current yield on a 1-year US Treasury bond: 0.00%; China's government stimulus package: 4 trillion yuan ($586 billion); inflation of the gold bubble this year: 27%; IIF's projected decline in foreign direct investment to emerging market economies in 2009: 82%; Actual decline as of October 2009: about 30%; IIF's prediction for 2010: probably worth ignoring entirely; The Economist's global public debt clock as of today: $32,052,820,000 (or thereabouts).

Protectionism
When we started our year, the threat of protectionism loomed large in many different countries. We've seen some bad examples throughout 2009 - government-sponsored stimulus packages being probably the worst offenders - but I suspect the above quote from Stiglitz applies here. We can find a number of protectionist anecdotes that make us shake our heads, but it doesn't appear to be systemic. Encouragingly, the G20 at least got the right language in their public statements, even if they haven't followed it to the letter.

The G20's extraordinary economic intervention
Surpassing my wildest expectations, the G20 has proven itself to be something other than a complete waste of time. The members of the G20 have shown themselves to be genuinely interested in making a crack at international cooperation on economic affairs - albeit with the usual cases of counter-productive grandstanding by leaders for their domestic political purposes. Granted, the "trillion dollars" of stimulus money pledged by the G20 in April may have been fudged a little, but the perception that governments were willing to step up and do something probably helped counter the deep-seated uncertainty felt by markets and citizens across the globe.

In all likelihood, the G20's accomplishments will be less about the big numbers and rhetorical posturing of the summits, and more about the incremental changes made by sub-bodies. Take the Financial Stability Board which, despite sharing an acronym with Russia's domestic security services, may prove to be quite useful. The FSB, like the IMF, has been tasked with some of the heavy lifting for the G20: strengthening regulatory standards, developing principles for compensation practices, and monitoring "exit strategies." They will also likely play a role, alongside the IMF, in the G20's efforts to conduct peer-review evaluations of each other's financial policies starting in 2010. Something to watch for.

Return of growth or govt life support?
Many of the economies of the world officially exited recessions my mid- to late-2009. These stats are always subject to later revision, but the overall point - that things did not get profoundly worse for economic growth - is the take home message. Of course, what's unclear is whether this growth will sustain itself when governments begin to ease off the stimulus measures. Moreover, the focus on overall GDP growth ignores the fact that unemployment rates have skyrocketed in many countries.

Macroimbalances
A running theme throughout the year was the dynamic between the US's efforts to re-balance their chronic deficits with China's efforts to continue export-led growth with an under-valued currency. Pressure on China has been growing throughout the year and will continue into the next.

Public Debt
Really piled up.

Some Losers
American auto-makers (esp. GMAC and Chrysler); traditional newspapers; global trade & Mother Nature (casualties of shifting priorities); Gordon Brown (policies as finance minister came home to roost); the US dollar (losing relative clout to China, maybe); frozen waffles & the Icelandic BigMac.

Some Winners
Gold, Goldman Sachs (God's work is apparently quite lucrative); Gordon Brown (crisis has temporarily breathed new life into premiership); IMF (relevant & better resourced); Ben Bernanke; and crackpot populist economic measures