3 ms·
In that case, shouldn't recessions instantly resolve themselves? When the price in stocks goes down significantly there's pretty much a guarantee that it'll com
by avirut 5y ago
In that case, shouldn't recessions instantly resolve themselves? When the price in stocks goes down significantly there's pretty much a guarantee that it'll come back up eventually, so wouldn't any prudent investor buy the dip?
As the parent comment said, the only explanation that really adds up would be that the amount of "available money" in the economy must be going down as a result of defaults on credit.
- coliveira 5y agoThere are many factors that enter in this calculation. One of that we don't know which companies will survive a recession. This seems to be an easy answer when looking at Google or Apple, but it is not so clear otherwise. For example, many banks didn't survive 2008. Many tech companies didn't survive 2001. Nobody knows what will be the next group of victims in the coming recession.