What is making me laugh lately is all this speculation of "Are we heading into a recession?"
It seems to me we ARE in a recession. People are decidedly NOT spending their money. And why should they? The threat of losing a job or a home, and suddenly NEEDING that money, is keeping most of us from taking any cash out from under the mattress.
I also think that the media and the financial prognosticators are LOATHE to actually say we're in a recession now, because with human nature, to say it's true is to make it true. You only have to look at the run-on-the-bank days of the Great Depression. Financially, we are like lemmings. Panic is VERY contagious.
Here's an article I saw on AOL:
Stocks plunge anew as data points to recession
Investors agonizing over a faltering economy sent the stock market plunging all over again Wednesday after a stream of disheartening data convinced Wall Street that a recession, if not already here, is inevitable.
The market's despair propelled the Dow Jones industrials down 733 points to their second-largest point loss ever, and the major indexes all lost at least 7 percent.The slide meant that the Dow, which fell 76 points on Tuesday, has given back all but 127 points of its record 936-point gain of Monday, which came on optimism about the banking system in response to the government's plans to invest up to $250 billion in financial institutions.
Wednesday's sell-off began after the government's report that retail sales plunged in September by 1.2 percent — almost double the 0.7 percent analysts expected — made it clear that consumers are reluctant to spend amid a shaky economy and a punishing stock market.
The Commerce Department report was sobering because consumer spending accounts for more than two-thirds of U.S. economic activity.
The reading came as Wall Street was refocusing its attention on the faltering economy following stepped up government efforts to revive the stagnant lending markets.Then, during the afternoon, the release of the Beige Book, the assessment of business conditions from the Federal Reserve, added to investors' angst. The report found that the economy continued to slow in the early fall as financial and credit market problems took a turn for the worse. The central bank's report supported the market's belief that difficulties in obtaining loans have choked growth in wide swaths of the economy.
"Even though the banking sector may be returning to normal, the economy still isn't. The economy continues to face a host of other problems," said Doug Roberts, chief investment strategist at ChannelCapitalResearch.com. "We're in for a tough ride."
Fed Chairman Ben Bernanke offered a similar opinion, warning in a speech Wednesday that patching up the credit markets won't provide an instantaneous jolt to the economy. "Stabilization of the financial markets is a critical first step, but even if they stabilize as we hope they will, broader economic recovery will not happen right away," he told the Economic Club of New York.
Analysts have warned that the market will see continued volatility as it tries to recover from the devastating losses of the last month, including the nearly 2,400-point plunge in the Dow over the eight sessions that ended Friday. Such turbulence is typical after a huge decline, but the market's anxiety about the economy was also expected to cause gyrations in the weeks and months ahead.
See the rest of the article here: Stocks plunge anew as data points to recession - AOL Money & Finance
