Monday, November 26, 2007

Seventeen reasons America actually needs a recession

Seventeen reasons America actually needs a recession - MarketWatch

Interesting if not a strange article by Paul Farrell. I'm not one of those people calling for a recession or predicting a recession - mainly because I've learned that attempting to predict the future is like trying to catch rain (or herd cats for that matter). What I do like about Paul's article is that he states that recessions shouldn't be something to be afraid of - they are a NATURAL part of the business/economic cycle, they are in fact healthy.

This is not to say that I like recessions, they are not fun and good people (along with some bad) get hurt. But they are necessary and natural.

I think that the recession word is being thrown around mainly because of the presidential election and because the financial media loves to have something scary to talk about. What is more fun to talk about: historic low inflation, historic low interest rates, historic low employment numbers, record corporate profits, record inflows to the treasury OR the "plunging" dollar, out of whack trade balance, "$100 Oil", "$150 Oil", "$200 oil", Home prices plunging, and the mother of all scary financial talk....RECESSION.

The financial media will always pick the latter.

By the way, what is the word Recession made up of - the term "Recess" which means to take a break.....what's wrong with taking a break every now and then? But let's not force a recession on us just so we have something to talk about.

Scott Dauenhauer, CFP, MSFP, AIF
President
Meridian Wealth Management