See recession, but don't act

[moo]

I was wondering about this in the news forum...

http://www.bloomberg.com/apps/news?pid=20601087&sid=avYkRibHRfDk&refer=home

How is it possible that most Americans see a recession coming, but they are doing nothing about it? Not cutting spending, not selling stocks or their house. Why? What is the psychology behind this?

Some explanations I could come up with...

1) People don't really believe in a recession, but say so when asked in a survey. But why? Have they been affected by some gloomy news? Or do they want to protest against the administration?

2) People believe a recession is coming, but that it doesn't affect the value of their stocks or homes, at least not by much. Where's the logic in this?

3) People are just slow to act. Also in December 2000 they believed in a recession, but it took two more years for them to sell their stocks. Why such a long lag?

4) People don't think they can do anything about a recession. Just continue to take more debt, to spend as if there's no tomorrow, to buy stocks etc. But why would they feel so helpless?


None of the above explanations make much sense to me. If you really believe in a recession, why not cut back spending, start saving, sell stocks (possibly your house too), and pay back debt? Of course, if most people actually act on their belief, a recession is guaranteed.

 

[Ivanovich]

I think if you read that article a bit closer, you'll see that people don't fear their own personal futures as much as they fear the future of the economy. At least that is what it says if I recall (read it yesterday).

 

[murray t turtle]

Quote from moo:

I was wondering about this in the news forum...

http://www.bloomberg.com/apps/news?pid=20601087&sid=avYkRibHRfDk&refer=home

How is it possible that most Americans see a recession coming, but they are doing nothing about it? Not cutting spending, not selling stocks or their house. Why? What is the psychology behind this?

Some explanations I could come up with...


2) People believe a recession is coming, but that it doesn't affect the value of their stocks or homes, at least not by much. Where's the logic in this?



None of the above explanations make much sense to me. If you really believe in a recession, why not cut back spending, start saving, sell stocks (possibly your house too), and pay back debt?

=========================
Sell a well thought out home purchase,or,
sell stocks becuase of fundamental data.Surely you jest

As far as selling/shorting stocks, not many sell cause of fundamental data;
not much fun.

Good idea on debt reduction,Moo

Good idea