So, goodbye to the showbiz couple Guy and Madonna. After eight years the couple is calling it a day. That glamorous marriage in a Scottish castle in 2000 seems such a long time ago.

Did the credit crunch make them do it?

While it's always sad to see a marriage end -- especially where children are involved -- at least this split is unlikely to cause financial hardship to either party. It's thought the couple is worth in excess of $500 million, most of that owned by Madonna, of course.

Chris Pizzello / AP

I don't usually spend too much time in this blog talking about the social side of the markets, but the prospects of impending recession has had me thinking about relationships on both a professional and personal level.

For example, is it time to sever that relationship with your credit card debt? Or, perhaps, go back to your mortgage broker and discuss paying down your mortgage or renegotiating the terms once the credit markets deliver more attractive deals.

How Do Recessions Affect People?

Recessions are as much psychological as they are financial. They start out being an economic animal driven, usually, by periods of excessive consumption that lead to contractions in spending as consumers reach the limit of their credit.

When fear starts to drive the agenda -- as increasingly equity markets decline and livelihoods retrench -- then the stakes get higher. The danger is that consumers become risk averse for many years and through saving and conserving cash they deepen the existing slowdown.

The key for the architects of monetary and fiscal policy (central banks and governments) is to get the right balance between keeping interest rates and taxes low enough to discourage excess savings whilst tempering the desire to spend.

Easier said than done!

Psychologists consistently report that recessionary periods create higher levels of mental distress in society which leads to unusual or damaging behavior. That might manifest itself as drug and alcohol use, suicide or divorce. Obviously, none of these is desirable.

The challenge is to fight the overarching sense of despair that comes with only digesting bad news -- or allowing it to distort your own outlook.

Keep Smiling

Mental health practitioners say you shouldn't make decisions with permanent personal outcomes -- when the cause may be temporary. Stock portfolios mostly recover -- recessions don’t last – and people do find another job.

The numbers suggest divorce rises during recessions. Do people stop loving their partner because their net worth has just fallen? I doubt it. I imagine it's probably the distress that comes with making difficult financial decisions that creates the fractures that break relationships. A good marriage should be like a good tennis doubles pair: the harder the opposition hit the ball, the harder you hit it back.

The Silver Lining

Read this how you will, but here in the UK property group Savilles last month insisted it had research to show that falling house prices may result in falling rates of divorce. They say the slowing economy and plunging house prices may decide not to divorce because they have less equity in their property to share on separation!

And if this blog has left you feeling ‘recession minded’ and depressed, this should cheer you up.

A colleague has suggested keeping an eye on stocks in companies that make children's clothing and toys. This is one area where parents are reluctant to cut spending. Also, couples forsaking expensive restaurants or nights out may choose to stay at home instead and spend their time working on lifting the birth rate.

Readers' Feedback:

Guess I got a bit confused reading your column today. The headline implies that we love our partners less during this credit crisis, but your last sentence implies that we will actually be loving our partners more!

Your observation on 'more loving' is also why I think Pfizer is a 'must buy' for me. Think of how much stress us over 50 guys are feeling watching our 401K's plummet, and we all know that 'more loving' equals 'stress relief'!  Just need me some more blue pills…..

Thanks!

Frank Culbertson

Your feedback always welcome - here.

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