Dec

15

Here We Go Again

Posted by cameron

December 15, 2007 |

The drumbeat for recession is getting louder! If enough people say we are heading for a recession then we will certainly go there as the herd followers the naysayers. I guess that could be one definition of a recession; if enough people believe we are, and act as if we are, then a recession there must be. If that is true then we are sliding into one. Of course, by the time enough people say so we will probably be pulling out. We all know housing has been in a recession for a while now and I’m certain that closely related businesses have also been dragged down, which says that part of the economy already tanked. It seems possible that as one part of the economy stabilizes and starts to move upward, that other parts of the economy will go down for a while. Is it possible for an overall economy to enter recession when different parts of the economy are entering and recovering at different times? Of course it is, but when bubbles burst the psychological damage may be longer lasting than the economic damage. Since markets are a lot to do with psychology I have to wonder when the housing market will really recover. Housing has one major thing going for it; we all have to live somewhere, unless it’s under a bridge.

I take heart from one simple thought; the housing trouble will subside some day and will be seen for what it is, a transient, a glitch, a correction of a bubble long overdue. The long term view tends to do that.


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