Economy downturn... Is recession approaching ?
We know that every 10 years or so there is a expectation of recession which cause world turmoil, economist predicted the worse is yet to come. Composite Indexes and CPI is depreciating badly that no quick fix can be applied. Policy makers, Investors and stakeholders are debating how much damage could the downturn cause, but none could bravely make any decision.American economy has in recent years aided by a global web of finance so elaborate that no one seems capable of fully comprehending it. That makes it all but impossible to predict how much the economy can be expected to fall before it stabilizes (NYTIMES). Although many quick measures are being undertaken, it is difficult to undermine the huge investment that need to be made to restore the current situation "amicably" , US is shouting for campaigns and luring people by giving tax rebates & slashing interest rates. The construction Industry is threatened as the building of new houses as dropped to 50% since the peak of 2006-2007. The sales of new house has fallen much faster thus causing over supply to demand, this dragdown the value of houses much lower. There is a expectation many firms will tend to hide or delay in giving reporting on losses they made to erode more anxiety.
Malaysia doesn’t escape from the domino effect that US had created, although we don’t read much on the newspaper, KLCI is good enough to show how the WALL STREET downward spiral is circling to sweep the ecomomy of Malaysia, A pinch in US will cause pain in all other Countries. The worst recession ( same as what happened in 1930’s) is predicted to happen in 2008-2009.
The banking panics put downward pressure on economic activity in two ways. First, they put fear into the hearts of depositors. Many people concluded that cash in their mattresses was wiser than accounts at local banks (people save money in such way during World War II). The three researchers show that the leading economists at the time, at competing forecasting services run by Harvard and Yale, were caught completely by surprise by the severity and length of the Great Depression. What’s worse, despite many advances in the tools of economic analysis, modern economists armed with the data from the time would not have forecast much better. In other words, even if another Depression were around the corner, you shouldn’t expect much advance warning from the economics profession (N.Gregory Mankiew).Let’s hope for the best and safeguard our job, save/invest money in trusted and reliable banking & investment firm.
