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Catalyst(s) that end recessions...
Old 11-08-2008, 09:50 AM   #1
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Catalyst(s) that end recessions...

While fundamental causes underly shifts in the economy/markets, the balance between fear and greed add momentum or herd mentality to affect timing and make recessions and expansions deeper and longer than they might otherwise be. Just restoring collective confidence plays a huge role, but that's ellusive.

No idea what will turn this one around, but who knows what the catalyst(s) and/or series of events were that led us out of previous recessions? Following the dotcom bubble, the 87 crash, etc. Not that anyone could have recognized them while they were happening...
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Old 11-08-2008, 12:32 PM   #2
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I think the past couple of months have done all you mention but now I think "uncertainty" has entered the picture. People and Wall Street does not like (to say the least) uncertainty. The Government sure is not helping matters much with all of the bail outs and a almost daily announcement of a change or a new program or new approach. Now we basically have two groups (outgoing and incoming), I think, sincerely trying to "fix the problem" but they are just adding to the turmoil. I know some do not like the phrase "it is different this time" but it sure seems to be. There are so many new problems coming up almost daily and all of the old ones have not gone away. IMHO the developed world will have to ratchet back economically quite a bit before we can go forward again. Frankly, I think we will see slow to no growth for a much longer period than "next year".
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Old 11-08-2008, 01:34 PM   #3
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Perhaps more people are finally beginning to realize that some day they have to pay back their loans and they can't live on credit indefinitely?

If that's the case the recovery will take a long time before a recovery happens. There's a lot of holes to be dug out of.
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Old 11-08-2008, 02:16 PM   #4
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Midpack, I don't know if I could come up with a plausible response to this to save my life but here goes anyway: never underestimate the power of demographics. Heh heh heh if everyone were like UncleMick and if he and everyone his age and 10+ years younger starts seriously spending down so as to enjoy every penny, and leave nothing on the table. The effect would be a gradual steep increase in spending. How much would that put into the economy?
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Old 11-08-2008, 03:48 PM   #5
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In retrospect my question was very clumsy. Put another way, every recession, "bottom" and then expansion is perfectly clear in retrospect. Looking back, can we identify the catalyst(s) and/or series of events that turned the tide in each case (I assume they are probably at least somewhat different each time)? Too bad I can't ask Jack Bogle...
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