HJV
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#1
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#1
I couldn't find a thread about this in GenDisc, so thought I'd make one.

For the last day or so, this has been in the news constantly.

BBC: Recession fears weigh on markets

FT: London shares struggle in volatile trade


FT: Asian markets plunge for second day

Reuters: Stock market rout fuels U.S. recession risk

Reuters: Recession risk as British bills come due

Are you worried about this? Do you think it's just a temporary slump or the sign of something?
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ukebert
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It's part of the inevitable instability of the capitalist system. Mark my words, this is the beginning of the end and the start of a future anarchistic utopia :p:

Seriously though, no, not good news. I think the next few years will be interesting ones.
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The Sherminator
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It was imminent I think, but its been surprising that the Asian market has held on for so long, I think it has to do with India and China doing very well. The coming recession of America and UK will greatly affect Asian markets but I would feel worried if their recession caused Asia to also have a recession. But I think that China and India might be able to hold on, as this is all caused by the speculative buyers of stocks we don't know what the next steps will be. I do think though if we hear positive things from America in the next few days the markets will recover and we will be happy again

I do think it is temporary, but how do you define temporary? I don't think this slowdown will last for more than a year, US consumers are too materialistic to worry about their debt for longer than that
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Cj-Tj
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A temporary blip I think, the world economy is growing too fast due to the birth rate to have any real negative effects on demand. With people living longer as well there needs to be the services and products there for them.
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LOST
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Asian markets got hit really bad something like a worst plunge in 20 years. It will be interesting to see what happens in US after their MLK holiday
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34253
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I'm really looking forward to finding a job in the middle of a recession when I graduate lol.
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ukebert
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(Original post by Elipsis)
I'm really looking forward to finding a job in the middle of a recession when I graduate lol.
Yeah it's going to be interesting :rolleyes:
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fuglyduckling
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(Original post by Cj-Tj)
A temporary blip I think, the world economy is growing too fast due to the birth rate to have any real negative effects on demand. With people living longer as well there needs to be the services and products there for them.
HAhahahahahahaha

No offense but how over simplistic is that?!?!?!

More people + people living longer -> increased product and services demand -> stronger world economy

Personally, I think that the US is heading towards a recession. We've already got bear markets in some countries; China and India's exchanges are more reliant on the US than previously thought (look at recent % drops on the exchanges and the currencies against the USD!); and I expect further profit warnings ahead, which will tip the US over the edge.
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34253
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If I was the Republican party in America i'd think it a good idea to crash the economy shortly before being voted out, then who picks up the pieces and looks bad for it?
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amazon-bluebird
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No I am not worried about this, to be honest I am overjoyed.

You see, stock market traders (well at least me and the savy ones) knew this was going to happen. We knew that there would be a big January slump, so post christmas we changed our position from bull to bear treading. Nearly always before christmas there is a bull market (stocks rising), and after christmas there is nearly always a bear market (slump); and when there are presidential elections (as there are now) plus difficulties in the market (as we saw in 07) this slump is virtually guaranteed to be bigger and more rapid.

Furthermore, in response to this slump, the news corporations release articles like the ones you've highlighted, and various other "scare mongering" articles, which causes panic selling. Panic selling = even bigger drops in the market. In fact according to Channel 4 News, yesterday the market dropped the most since 9/11.

Why am I overjoyed? It's simple: profits. I made huge profits out of yesterdays drop, it was the most profitable day trading I've seen in a long while. Not only did the profits come from shorting a panic market, but also my hunch on NRK paid off, thats twice NRK has given me a healthy bonus.

So what are we likely to see now? Well let's consider the fact that prices are low, and also consider the institutionalists. Institutionalists have to trade on the market, they have no choice, plus prices being low make stocks an attractive purchase. So we're likely to see a lot of institutionalists buy into the market while prices are low, which therefore means that demand increases and subsequently so does price, especially as institutionalists control a large portion of the market. Therefore, sometime soon we should expect the market to make at least some recovery. As for the long term, it all depends on the US economy. All the world stock markets are impacted by the US stock market, and the US stock market is impacted by the US economy. If the US government does not do anything to improve the state of the US economy, we are likely to see continued volatility in the markets, and ultimately a disasterous effect on businesses and the markets in general. However, if the economy improves, then we are likely to see growth in the global markets, which will be in everyones benefit. Therefore, I think it will be highly unlikly that the US government does nothing.
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