1. lordofhats
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    lordofhats Contributing Member

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    Fear of Recession, causing Recession?

    Discussion in 'The Lounge' started by lordofhats, Jan 17, 2008.

    I'm not an economical expert or anything but when I log on I automatically go to yahoo and of course there is yahoo news. Now in the past few days I've seen five articles about stocks dropping because of the fear of recession, or some guy making a report about the economic situation, or because the FED made a report about the economy.

    May question is: Can the fear of a recession cause a recession?
     
  2. wordwizard
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    wordwizard Contributing Member

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    hmmm I heard that there pretty much is a recession happening already. Not sure if fear of a recession played a part in it.
     
  3. Montag
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    Montag Senior Member

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    Isn't that what caused the stock market crash? People saw the market was sliding, so they sold their stocks early, which drove the prices down more, and so more people sold, and the price dropped, and then the whole system imploded.
     
  4. PrincessGarnet
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    PrincessGarnet Contributing Member

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    i was actually thinking that question myself with all this talk, because when there is talk about house prices falling or the prediction of a crash - people who have the equity in their house already spent, or were thinking of selling their house at some point, might do it sooner, and so this leads to a greater supply in the market and thus prices are likely to lower. But i'm no economist- (thank god :p)
     
  5. Domoviye
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    Domoviye Contributing Member

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    Well right now the US economy is increasing by 3.5 or 4%. That should not be considered a recession. But because of some factors like the housing bubble, people are claiming its the end of the world, led primarily by the media.
    What people should be doing is using the good economic times to plan ahead and try to back up the housing bubble so that when it does pop it doesn't take everything with it. Instead a whole lot of chicken littles, and a media more interested in creating stories then reporting them are trying to cause a panic because it makes them more money as people do exactly what they say and read their papers to see what is happening.
    Remember the word for all media, "if it bleeds it leads". The MSM wants to make sure this story bleeds.
     
  6. lordofhats
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    lordofhats Contributing Member

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    I think the housing bubble has already popped, hasn't it (In the US that is)?
     
  7. Lengo
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    Lengo Member

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    Yes. The fear of recession causes recession. Likewise, the alleviation of such fears will improve a recession. But recession is not necessarily a bad thing. When people are reluctant to spend, it means they're re-evaluating their financial situation, and thinking and planning (which, of course, is highly desirable).
     
  8. Domoviye
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    Domoviye Contributing Member

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    It's in a slow motion pop right now. If it was an actual burst like the Asian tech bubble the stock market would be at record lows right across the board and falling.
    Some good news and intelligence could pull this out.


    So we're all doomed.


    Lengo I kind of agree. But it has to be properly managed. If the government or businesses do the wrong thing or panic it spirals out of control way too easily. Right no I don't think anyone is capable of controlling it properly.
     

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