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Yes and no. If I buy a house with a mortgage, that's a risk. If interest rates shoot up to 10%, 20%, or I get made redundant, I lose my house and the risk hasn
by benj111 4y ago
Yes and no.
If I buy a house with a mortgage, that's a risk. If interest rates shoot up to 10%, 20%, or I get made redundant, I lose my house and the risk hasn't paid off.
Yes you could point to the fact that I bought the house as the reason why I am now bankrupt and homeless, but I don't think that tells the whole story.
There's always risks that could turn into something worse, quite often they don't though. I think it's reasonable to point to 9/11 as a cause of the following recession because if that hadn't have happened we wouldn't have had the recession (if you accept that assumption).
- roenxi 4y agoThe joke here is that the bond traders could not foresee 9/11 and did not predict the response to 9/11. They were forecasting the recession based on predictable indicators. And 9/11 itself couldn't possibly have caused a recession. 2 buildings just isn't enough damage to be measured in a system as large and complex as the US economy. If you want to argue that the Afghanistan invasion contributed to the recession I am sympathetic to that idea, but the general consensus seems to be that war is helpful for the economy (which I don't hesitate to argue is a stupid consensus - but it is what it is).
- benj111 4y agoNo. 2 buildings collapsing doesn't cause a recession. But are you really saying 9/11 is just 2 buildings collapsing? There's a lot of psychology in the markets.