There's been a lot of talk over the past year of whether the U.S. is headed for a double dip recession. While some economists think it could happen, the Federal Reserve's most recent expansionary action appears to indicate that it believes a double dip is a real possibility. For now, the nation remains in a limbo where it could teeter either way. If another recession is in the near future, how might that look? 24/7 Wall Street provides eleven outcomes. Here's #9:
If the performance of the equity markets in 2008 and early 2009 is any indication, the S&P 500 would drop from its current level of about 1,100 to a low of 676, which it hit in March 2009. This would take trillions of dollars off business balance sheets and from consumer retirement and brokerage accounts. Businesses would become less likely to invest in new plants, equipment, and services. For individuals, many would see a large part of their retirement disappear. That would cause a huge drop in consumer spending as people attempt to preserve cash, perpetuating further drops in the stock market.
Read the full story at 24/7 Wall Street.
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