Recession

[Gio]

So... Its my first post although I have been lurking for a while, and for my first post I wanted to post about something that really interests me (even more than bespoke suits) and its economy.

The signs are clear, we (and I say we because although Im not american my country will get hurt by this) are entering into a recession...

What are your thoughts on this? What are your toughts on what the government is doing?

P.D. I would have posted this in the power and money place but I dont have enough posts

 

[Jbreen1]

We've had signs of a recession for a long time. Many economists believe after long periods of growth, which we have had, recessions are a necessity. I don't think it's a major problem yet. The main factor in this, after my semester research project, is the housing market and it's problems with sub-prime lending. The dollar has weakened but give it some time and it will pick up again.

 

[imageWIS]

The market naturally goes up and down over the course of time. After a bull market during the 90's, this is the bear that comes afterwards. All one has to do is look at the S&L fiasco of the 80's to see how history repeats itself.

Jon.

 

[kwilkinson]

Originally Posted by imageWIS

The market naturally goes up and down over the course of time. After a bull market during the 90's, this is the bear that comes afterwards. All one has to do is look at the S&L fiasco of the 80's to see how history repeats itself.

Jon.

Speaking of the ups and downs of the market..... what does someone who is retiring in 5 years to do? This isn't me of course, but i think it's interesting. Their 401(k) would have looked awesome during the 90's, and they'd have been stoked, but now they plan on retiring when the economy is bad... I really don't know too much about the subject... but would they be forced to work and not retire until the next bull?

 

[dkzzzz]

My amateur prediction is: We are heading for a tremendous one.
I hope I am wrong.

When last recession came people bailed on stocks and invested in RE. Now that we have credit/banking recession, RE recession and now stocks recession where investors would go?

Outside of the country is my answer.

 

[Eustace Tilley]

Originally Posted by imageWIS

The market naturally goes up and down over the course of time. After a bull market during the 90's, this is the bear that comes afterwards. All one has to do is look at the S&L fiasco of the 80's to see how history repeats itself.

Jon.

A recession is different from stock market swings. You're refering to market corrections, loss of investor confidence and the like. A recession refers explictly to a contraction in GDP growth for two or more consecutive quarters.

Yes, I believe we'll hit recession very soon (if we haven't already). Here is Goldman Sachs' take:

http://news.bbc.co.uk/2/hi/business/7179298.stm

 

[imageWIS]

Originally Posted by Eustace Tilley

A recession is different from stock market swings. You're refering to market corrections, loss of investor confidence and the like. A recession refers explictly to a contraction in GDP growth for two or more consecutive quarters.

Yes, I believe we'll hit recession very soon (if we haven't already). Here is Goldman Sachs' take:

http://news.bbc.co.uk/2/hi/business/7179298.stm

Well, stock market swings downward can result in recessions. I wasn't implying that every downturn in the market will lead to a recession.

Jon.

 

[Eustace Tilley]

Originally Posted by imageWIS

Well, stock market swings downward can result in recessions. I wasn't implying that every downturn in the market will lead to a recession.

Jon.

Yes, but this recession wasn't started, nor is fueled, by stock market swings.

 

[Thomas]

I think if we're not in recession yet, we will be shortly. With debt levels where they are, it's hard to see any spending growth anywhere. Those with any sense will pull back, spend less, and reduce their debt load, and this also goes for those companies who are leveraged to the gills. I would think that once spending falls below a certain level, debt would hopefully fall as well.

Then again, the more I think about this, is there any time in history where debt has fallen significantly? I mean retired, not written-off? I'm at a loss here.

 

[Coho]

Thank God, I'm still in school. Hopefully, by the time I am out in the workforce, things will look a little better. I'm hoping that by the time I've accumulated enough capital to invest, the business cycle is in a better phase. As some people have pointed out, we may have already entered a recession. The sign and government reaction to look for is whether the USA is currently at war with another country (has been American diplomatic game play for decades). When we're in a recession, we start a war to get the economy going again. I fear that at the lowest point of the recession, US would be at war with Iran and possibly Mexico (he he, albeit unlikely). We'd lose California and Texas the next day due to civil unrest if we are ever at war with Mehico.

Originally Posted by Eustace Tilley

A recession is different from stock market swings. You're refering to market corrections, loss of investor confidence and the like. A recession refers explictly to a contraction in GDP growth for two or more consecutive quarters. Yes, I believe we'll hit recession very soon (if we haven't already). Here is Goldman Sachs' take: http://news.bbc.co.uk/2/hi/business/7179298.stm

 

[imageWIS]

Originally Posted by Eustace Tilley

Yes, but this recession wasn't started, nor is fueled, by stock market swings.

Not directly, no. But the economy (vis-Ã -vis the stock market) was already headed towards a downward direction.

Jon.

 

[itsstillmatt]

Originally Posted by imageWIS

Not directly, no. But the economy (vis-Ã -vis the stock market) was already headed towards a downward direction.

Jon.
No. Don't confuse things. ET was correct and you are not. If you look at market performance in recession and going into recession over a long period there is not enough correlation to support your point.

 

[dkzzzz]

Are you saying that market performance is not a good predictor of recession?

 

[Panzeraxe II]

You're backpeddling here Jon and I think you know it. Eustace (and Matt) are correct.

 

[itsstillmatt]

Originally Posted by dkzzzz

Are you saying that market performance is not a good predictor of recession?
Markets can be good predictors of recession, but historically they have not generally been. Sometimes markets have gone down before a recession and recovered as the recession started. Sometimes markets have gone down and there has been no recession to follow, and sometimes markets have gone up into a recession and then tanked in the middle of it. Here is a worthwhile chart. The shaded areas are times of recession over the last 90 years. You see just about every sort of market action possible in and around the recessions. http://www.valueline.com/pdf/valueline_2006.pdf