Financial Crisis vs. Economic Crisis

Welcome to Tip’d, a social media site for finance, investing, and business topics. Want to participate? » Join Tip’d now! or read our FAQ.

Tip It

Financial Crisis vs. Economic Crisis

Posted by ObliviousInvestor 1307 days ago, popular 1307 days ago (http://www.obliviousinvestor.com)
Category: Economy | Tags: crisis economy investing

Discussion of the difference between an economic crisis and a financial crisis. Explains why a financial crisis is no reason to sell your investments.

10 Comments addto

Save & Share Topple

Spam? Topple this!

Comments Who Tip'd

Comments

wangarific 1307 days ago

I think there is a definite distinction between the two, however I would disagree with you on the point that we are not in an economic crisis. The economic crisis may have been caused by the financial crisis (affecting credit and lending practices) but I believe we are in an economic crisis...

ObliviousInvestor 1307 days ago

While I stand by my opinion that we're not having an economic *crisis,* I'll concede that you have a completely valid point. A financial crisis certainly can affect our economy as a whole (both by affecting who can get credit, as well as affecting people's confidence and willingness to spend money).

neophyteblogger 1306 days ago

Amazing, never gave economic versus financial much thought but on considering the points in the article and the fact that US unemployment today is not far worse than the 65-year average maybe things arent that bad.

scotsworth788 1306 days ago

In any case, a crisis is never good. That being said, this article brings up some good points. I think a lot of the issues we are having today is based solely on consumer perception, which is perpetuated by the media and investors and a general panic in the market itself. Things look worse than they really are.

wangarific 1306 days ago

Media definitely perpetuates this, we need a good solid political scandal to capture people's attention. It's amazing how little people are focused on Iraq right now.

nkspas 1306 days ago

@wangarific

Speak for yourself. I'm all over Iraq. I follow it all day, every day. In fact, I think I might actually go visit soon, just to see what's really going on, you know, on the ground. I'll just need to cash in some of my Bear Stearns stock to buy a ticket.

wangarific 1306 days ago

You must be a little person then. :)

In all seriousness, I should amend that to say how little "the media" is focused on Iraq, where lives, rather than dollars, are at stake. Heck, the Mint can just print more dollars...

thekritz 1306 days ago

I would agree that there is a theoretical distinction, although the two terms have clearly become interchangeable, since the current crisis is rooted in both financial and economic problems, with the two reinforcing each other. For example, bad economic data causes the stock market to decline which reinforces consumers' and investors' negative outlook, which in turn, negatively effects the economy.

ultrageek 1306 days ago

Ok, sure there's a difference between the two, but doesn't a financial crisis potentially turn into an economic crisis? For the little guy without any savings, it just feels like semantics. I'm scared either way, but not yet "running scared."

hollyhunter 64 days ago

I would be interesting to see a follow-up on this post now that the real economy is in crisis.

Want to leave a comment on this story? Login or join Tip'd to comment.

A community for financial news, ideas, and tips