The facts(?) indicating depression.

But, what about the facts pointing to actual recession and not the psychology of it?  The state of the US economy at the end of January, 2008 is an excellent example of the confusion surrounding hard facts. Examine the January news stories and you get CNN MarketWire leading with “Top Wall Street Economists: US may already be in a recession”, the key word here is may, BBC News, Business, quoting Merrill Lynch with “Recession in the US has arrived”, and Business Week reporting, “No recession but most experts we polled expect meager growth”. If all those experts can’t decide, then what do you know, right? And your neighbor next door, is he right? And the cab driver who takes you to the airport for your recessionary get away to the winter sun, is he right?   

So, it is not so much a question of worrying about being in a recession as it is to recognize the signs of an approaching one. And, what to do about it. Right here would be a good time to remind readers to review an earlier article on stocktrades.ca explaining leading economic indicators. It deals with some of the important signs and information you can glean from various ongoing measures of economic activity.

Economies are a big, big machine and there is not much the individual investor can due to alter an economies course away from adjustment, decline, technical recession, extended recession, deep recession, or the real bogeyman of economic woes– depression. Insight into the health, direction and potential of a country’s economy is an essential for the investor to include in his decision making process.

One thing is for sure in recessionary times. Business activity slows, employment falls, retail sales drop off and therefore industrial production decreases.

Recessions are a natural part of a nation’s economic cycle. An over heated or growing economy needs a period of recession in order to stabilize and revitalize. The old saying of what goes up must come down is true, but remember the market bounces when it hits the ground. Count on that.