subject: Is The Recession Over Or Will We Have Another Market Correction? [print this page] There's something quite odd about society today imo...it definitely doesn't feel like the worst recession since 1930's. For instance in Merthyr Tydfil area in the 1930's things got so bad that the government of the time considered moving the entire town to a London overspill...there was no work no shops and no social events. All we are seeing today is that house prices have started rising again, commodities rising again, food, etc.
Fast forward to today....Joe blogs who bought 10 buy to lets after lying through his teeth got bailed out and given more disposable income instead of going bust allowing our kids to buy cheap property. This is really a great debate in itself since it is a fact that recessions happen for good reasons -:
1. rubbish companies fail allowing the prudent successful ones to thrive and employ more people
2. people change their attitude to life and are often happier and nicer
3. people are forced to sell their houses or get re-possessed allowing the next generation of tax payers to buy into society
4. banks become more cautious on lending which encourages thrift
Something says we have yet to feel the pain... but it's coming... there might be another rise in April's pay check due to the forthcoming elections but after that we can expect more taxes and cuts! Paying for it all will soon start. This is not to say that I want to see people get smashed but once the real pain has come then the real recovery can happen. I still don't meet many people who have lost a job, home or struggled yet and I'm an average Joe myself.
So all in all I think we will have another market correction, but sadly in my opinion it will be very hard to make a profit out of this ever since the Fed chose inflation in place of depression by cutting rates (hello stagflation). Markets tend to go up in high inflation environments, but the economy tanking will create downwards pressure. End result = highly volatile and highly risky. Clearly any options in this environment should be, and are, horribly expensive, and along with the upwards force of inflation are not a good bet IMO.
