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When Will We Know We Are Out Of The Woods?
At what point will we know we are out of the woods in terms of having another major dip in the markets?
I remember hearing a lot of talk about how the stock market had a major dip, a small recovery, and then a huge dip right before the Great Depression. Some people were trying to make the case that we are in a similar position and could see another major dip in the stock market. These arguments were being made months ago and we haven't had a second major dip yet.
I know we are not completely out of the woods quite yet. We have a lot of mortgages out there that are being defaulted on. We have a lot of people who are still out of work.
There also are some positive signs. The rate of job losses has slowed considerably. The stimulus package and bank bailouts seem to have the economy out of the credit crisis and the worst of the recession.
I know we can never say we are completely out of the woods because the market could crash again at any point. However, in terms of a double dip stock market crash related to this past recession, are we getting beyond that likelyhood?
I remember hearing a lot of talk about how the stock market had a major dip, a small recovery, and then a huge dip right before the Great Depression. Some people were trying to make the case that we are in a similar position and could see another major dip in the stock market. These arguments were being made months ago and we haven't had a second major dip yet.
I know we are not completely out of the woods quite yet. We have a lot of mortgages out there that are being defaulted on. We have a lot of people who are still out of work.
There also are some positive signs. The rate of job losses has slowed considerably. The stimulus package and bank bailouts seem to have the economy out of the credit crisis and the worst of the recession.
I know we can never say we are completely out of the woods because the market could crash again at any point. However, in terms of a double dip stock market crash related to this past recession, are we getting beyond that likelyhood?
Tags: double dip, out of the woods, recession, stock market
Replies to This Discussion
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Permalink Reply by paul on
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Well, the housing mess still needs to be cleaned up, but I think we are basically out of the woods. We might still have some volatility, but I don't think we will have another huge dip in the stock market or the economy in general for another decade or two.
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Permalink Reply by Vitaly Indinko on -
I certainly don't think we've seen the signs that we're in the clear yet. Nothing has really changed about the banking situation and Americans still have an terrifying amount of debt. There's also some question as to whether the mortgage crisis is over. Obviously to some degree all of economics is playing a game of kick the can, but I think we're running out of room.
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Permalink Reply by Nathan Andover on -
I think there are some positive signs. A few months ago, credit was pretty much frozen. I have good credit and I couldn't get a car loan. Now it seems the credit crisis is loosening. Here's an article from BusinesWeek about the issue.
"The necessary deleveraging of the consumer - their gradual repayment of credit card and burdensome mortgage debt - will continue to be a drag on the economy, but fewer people and businesses that can and should get credit will find their banks turning them away."
So at least we have that going for us.
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