The only effect of such reports is to paralyse readers with fear. Emotions sell newspapers and frightened people tend to watch television for hours on end. All in all, a losing proposition for the audience.
Real estate prices are plummeting in some parts of the United States and Europe. This makes exciting news for television channels. How many interviews have they shown with borrowers who have lost their job can no longer pay their mortgage? Probably hundreds.
On the other hand, did you know that the building trade in Romania is expected to grow 6% in 2009. New apartment buildings, hotels, and shopping centres are springing up in every town of that small country.
The demand for new housing in Romania is so strong that builders are working Saturdays and Sundays. Suppliers of construction materials are expanding at the same speed. Hardware retail chains are opening outlets at a rate of one per month. Is that not amazing?
Of course, my point is not that you should pack and move to Romania, since that country has serious problems in many areas. What I am trying to underline is that markets are asymmetric. What we see close to ourselves is a small part of the global truth.
Unemployment in one city is irrelevant to the job market in a town located three hundred kilometres away. Traffic jams on one side of the road are irrelevant to those travelling in the opposite direction. Even the flu affects different areas with unequal severity.
An excessive number of software engineers in the south of Germany tends to lower the overall salaries in the profession, that is, until they begin to move themselves to another country where there is a high demand for their services.
In the global economy, nothing is what is used to be. The gross national product of many traditionally poor countries is posed for rapid expansion. The Internet is wiping out old professions, in particular intermediaries, and enabling all sorts of new businesses.
Markets are being redefined, some times consolidated, often fragmented. The only permanent truth is that change takes place at different speeds. No two currencies are the same and each is exposed to different risks. Not all car manufacturers have the same cost structure. Not all countries have a flourishing entertaining industry.
Turn off the scaremongers on television and read some foreign newspapers on the web. Look up the stock markets in other continents. Reality is much more complex than what a local view can portray. You have no time to waste on the fantasy of a worldwide economic recession. You have better things to do.
[Image by Boy27wonder under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]