Financial panic, stock market crash, loss of confidence, recession... These are sentiments expressed daily today in the media. However, is what we read and hear about really true? Or is it just media hype? Maybe there is a need for us to pause and think. After all, it is true that the job of journalists is to sensationalize news. The paper has to sell, right?
However, we have to admit that we are going through a recession. The economy slowdown is a real thing. But to understand it fully, we need to do a step by step analysis of the entire situation.
Credit crises: The chain effect
It seems that British banks unwisely invested in risky mortgage products in America. When the housing market in America collapsed, it adversely affected British banks. Once this happened, banks became wary of risks and, in turn, cut down drastically on mortgage products offers. The catch here is that for banks to again have these products on their list they need to be willing to take risks.

The points mentioned here have all contributed to the present economic slowdown. One thing that can be pointed out here is that this slowdown has happened at a much faster rate than earlier. This could be attributed to the fast flow of information in present times. Be it the television or the internet, people can now get all the latest news in a matter of minutes and reactions to news, as such, is also faster.
This can be true in the reverse case as well. Because of instant connectivity, people will react faster to optimistic news and the economic situation will also improve faster than in earlier cases.
In fact, many are hopeful that the present scenario will change for the better as early as 2010. And the predicted rate of growth is also higher.
But detractors abound. Pessimists are convinced that there will be no immediate upswing of the economy for a long time to come. Either way, it is not easy to say what will happen in future but most agree that in 2009 nobody will see the end of this recession.