Looks like we are headed for a recession! By academic terms, recession is two straight quarters of negative GDP growth. Not only has the GDP growth slowed over the past two quarters, there are definite signs that the real GDP growth has stalled! Some economists now predict we are headed towards negative growth which would officially signal a recession. Remember when US coughs, the world economy sneezes. In my opinion, the world economy is a lagging variable when tied to the growth of the American GDP. The effects are already been felt around the world:

1. The canadian trade balance shrunk to the lowest levels in the past 9 years. Two biggest contribution factors are the high value of the loonie coupled with sluggish demand from our neighbours south of the border.
2. I haven’t been following the Bank of England and the European central banks but I believe they are also under pressure to cut rates.
3. In India, the productivity slowed down last much at a rate much slower then predicted. The GDP growth last month slowed below 8%, first time in 3 years.

Along with these definite signs, the smart money on Wallstreet has already placed their bets on a recession and have gotten into their positions.

I wonder what the yields in the bond markets are predicting? especially the 10 Year .

Have so much uncertainty and havoc in the market for me signals a GREAT buying opportunity. The good stocks are going to be cheaper then ever and it will create a great buying opportunity in the next 3-6 months for those looking to invest for the long run!

We will stay tuned.