Is there a Recession ??

This is the question that every salaried person today asks, but doesn't wish to know th e answer.

With markets looking down big time, it is clear the bear mood has set in, unclear is it here to stay? I strongly believe that US is in recession. I also believe that the world economy (Including India) is tightly coupled with the US economy. This means the world is experiencing a slow down.

This is not rocket science and doesn't require prodigious financial skills to predict. I don't think there is anything physical as recession, meaning it can't be quantified. We can't say if X > Y then there is recession. It is pure sentiment. If people refrain from taking risks, their investment exposure decreases which means, people sell to take back their money, the more they sell, the price comes down and if it is a market leader brings the sector down.

Thats what recession is, some firms get affected big time because they would have risked so much, their loss is also huge, so huge that they have to sign off. People are not ready to take more risks, not ready to buy new firms, not ready to invest money. This means there aren't enough clients for Ibanks to do business with, which means they don't get the usual money inflow they need to.

I read a few days before that with 8pc GDP growth, India is totally shielded from the tumultous world markets. This seemed to be an absolute paradox. With the age of globalization setting in, we were talking about decoupling of world economies. The truth dawned last week, when the NSE/BSE followed the tracks of NYSE and suffered a blood bath. There is recession and India is not saved from it.

The question is how long ?