Debt and economic crisis are still taking their toll in the European market. The European banking stocks has made more losses today. With this current trend in stocks, many fear the coming of the double dip recession. Everyday, news of debt and economic crisis are reported. Seldom is there news about economic gain.
Although there is no clear evidence yet that will link the current economic situation to a double dip recession, many believe that by judging the key economic indicator, this is where the market is heading. However, according to Brian Divine, the chief economist at NCB Stockbrokers, what Ireland is experiencing is merely a slowdown in economy.
The main concern of economists is that when this feared double dip recession does take place, it will be a major blow in investments. Most new investors will not be pushing through with their investments. According to John White, financial management head at RSM Tenon, human psychology explains that in terms of investment, people will be more confident to invest if there is a positive rise in share prices.
Loss of incoming investments will mean that there will be a smaller chance to create new employments. This is a big issue as creating more employments is considered as one of the major factors that may just change the tide and bring gain in the economy.
However, there are also speculations that this double dip recession will merely be a short term recession. This is just a slowdown and it should not be a cause of alarm.
