A large number of investors, talking media heads, and Wall Street analysts are predicting that the US toward another recession. Even the mention of the 'R' word (recession) sends fear through not only investors blood, but nearly all American's.
Why? Because soon after hearing the word most people begin remembering 2007-08 financial crises which sent the US economy into a 19-month recession, which to make matters worse from a psychological standpoint has been coined 'The Great Recession'. Furthermore, since the 2007-09 recession is still fresh on everyone minds and was terrible in terms of job lose, declining economic activity, low 401-K balances and stock prices, when the 'R' word is used now, everyone immediately thinks of all those terrible things happening again. This causes fear and panic to quickly set in.
From a market standpoint, this can send equity and commodity prices lower, further increasing the likelihood of a recession. (Think self-fulfilling prophecy.)
But let's stop right there for a moment and look at what is really happening with the markets. Continue reading "Stocks Are Down, Talk Of A Recession Coming! It's Time To Panic! Or Is It?"