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DOW != economy A stock crash is not a recession. The stock market is not the economy. Stocks falling is not a recession.

• dragonwriter 9y ago
  OTOH, stock market crashes are not uncorrelated with recessions.
  • jorblumesea 9y ago
    There are actually a lot of examples where this is not true 1987 stock crash? No recession. 1980-82 recession? No stock crash. 1992 recession? Also no stock crash.
    • dragonwriter 9y ago
      There's a big difference between “X is correlated with Y” and “X both implies and is implied by Y”. Instances that demonstrate that the latter is not true do not contradict the former.
    • fallingfrog 9y ago
      A stock market crash only leads to recession if the preceding bubble was financed with debt. Which, sadly, might be the case this time due to leveraged buyouts and buybacks. In 2008, the housing bubble was financed with easy credit. In 1929, the stocks were all bought on the margin. Then it's really painful to unwind the bubble. If that is the case this time around, we'll know when all those companies that bought their own shares back at inflated prices go bankrupt at the same time.