RECESSION ON ITS WAY?

A recession is generally defined as two consecutive quarters of economic decline. The stock markets over the past few days as well the historically low bond yields show that we are already seeing a sharp slowdown in economic activity.


We can see the contraction in economic activity as there is less travel, less consumer demand, and less manufacturing etc as we are all adhering to social distancing. This kind of contraction in economic contraction is the hallmark of a recession- the markets are showing signs we may be heading that way.


No one knows how long it will last. This uncertainty is what is driving the volatility in the markets. A deep V like the recession of 2007/8 isn not anticipated as this is an economic crisis. Let us see how this all pans out.