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Does stock market decline signal a recession?


Friday, August 28, 2015

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Kelly Cunningham, National University System
Answer: YES

There have only been two periods in U.S. history when stocks rose as quickly in six years as happened since 2009. In both cases (1923-29 and 1993-99), a bear market soon followed. Similar to 1937, Fed tightening will not only cause the stock market to drop but send the economy into recession. The Fed does not know how much tightening will knock over the apple cart, or exactly how to fix it when it does.