If Recession or Depression happens what would be impact for investor as these things are said after it has happened only and not before
I have seen 2Double dip recession one in 1990-1992 it was very early for me to understand the other was 2001-2003 and this was worst period to be an analyst in simple words Rs.100 stock became half and then became half and there was no stopping for price erosion, in 2002 & early 2003 if I talk about Stock market people use to hate me and then came a time from April/2003 Nifty from a low of 920 has made a high of 6357 by January/2008 in 5years stock market gave more than 5times returns and most analyst, investor and traders today have not seen worst of market what happened in 2008-2009 crash is just a blip and recovery was also fast, so pain was less comparatively.
Now Indian Government in my view has prepared itself for the worst and PM has already warned of Double Dip recession in G20 summit and the strong decision to raise fuel in my view is to save funds today for any fresh stimulus tomorrow.
Nobel Prize-winning economist Paul Krugman talks about Depression which I have never seen or my 70 years old father so I would lack experience to face this. I do not have record of market behavior to understand how market behaved in India. India with strong growth will not be impacted as much as Globe but we will not be isolated as RBI in a statement said, “India has become more vulnerable to slowdowns and financial crises abroad as foreign trade plays a bigger role in the economy -Trade represented 35% of GDP for the year to March 31, 2008, up from 21% a decade earlier”.
So investors should understand that many of analyst and investor lack experience to handle a global crisis and my simple advise is Market in long term 5-6years can also give good gains. But many so called investor are today 6months to one year where I advise then to take informed decision as we can only say the impact after it happen and not before it can happen.
The Third Depression By PAUL KRUGMAN
http://www.nytimes.com/2010/06/28/opinion/28krugman.html?_r=2 Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31. Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.
Double Dip Recession http://www.investopedia.com/terms/d/doublediprecession.asp
The causes for a double-dip recession vary but often include a slowdown in the demand for goods and services because of layoffs and spending cutbacks from the previous downturn. A double-dip (or even triple-dip) is a worst-case scenario. Fear that the economy will move back into a deeper and longer recession makes recovery even more difficult.
Prime Minister Manmohan Singh today warned that fiscal contraction across industrialized countries could result in double-dip recession. http://www.business-standard.com/india/news/fiscal-contraction-can-cause-double-dip-recession-pm/399644/
http://graphics.thomsonreuters.com/10/GLB_CYC.swf Double Dip Monitor
http://graphics.thomsonreuters.com/10/GLB_CYC.swf Double Dip Monitor
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