Federal Reserve Board Chairman Alan Greenspan has warned that the nation's recession could be a long one if the war in the Persian Gulf becomes protracted. General Motors Corp. is so afraid that the economic downturn will last a long time that it recently cut its dividend and announced plans to lay off workers.

The gut feeling among ordinary people and experts alike is that this recession will be a severe one. The heads of giant corporations privately have predicted a two-year recession. Some very pessimistic folks are even using the D-word, although a depression isn't the odds-on favorite.

The stock market may be alone in its belief that this recession will be short. In fact, the way stocks have been rising lately, the market seems to be predicting that the economic downturn won't last another six months.

If you are an investor it is time to place your bet. If you side with the optimists, you'd better rush out this week -- no, make that tomorrow -- and purchase a truckload full of shares.

But if your gut is telling you that this recession is going to be long and hard, then buying stocks now could result in one miserable year.

Gert von der Linde, the economist at Donaldson Lufkin & Jenrette Securities Inc., said the stock market ordinarily would be correct reacting as it has to the stimulation of the economy now being undertaken by the Fed.

"I think it is almost {like} Pavlovian dogs reacting to aggressive Fed easing," said von der Linde. "That has worked almost 95 percent of the time in the past."

But von der Linde is one of those who doesn't believe the steep drop in interest rates engineered by the Fed will turn this economy around. And, consequently, he doesn't think it is smart to buy stocks right now. "I consider this to be a false start for the market," he said.

Professional investors do react in herd fashion nowadays. Because of pressure to show good performance even in lackluster markets, the pros who manage other people's money jump into the market whenever they see a trend developing.

The trick is to get out of the market when the trend slows or reverses. That's something that the pros can sometimes do, but that is a lot more difficult for small investors who worry about wasting money on brokerage commissions.

Many professional investors did notice a trend developing in the market a few weeks ago. First, it was a safe bet to assume that the stock market would react positively to the Fed's sudden shift to lower interest rates. And the stock market tends to climb whenever a war involving this country seems to be going our way.

So the stock market's recent improvement was predictable. But now that stocks have risen, there's a more critical question: Can they remain higher?

If you don't believe that the economy is in for a quick turnaround, then you shouldn't believe in the staying power of this stock market rally.

"The market is assuming a short recession and a short war, and I don't think we can be sure of either one," said Robert Stovall of Stovall/21st Advisers. "I'm personally not buying. I'm selling into strength.

"The market has given overly favorable interpretations to most of the news," Stovall said, adding that by the middle of last week professional money managers were merely piling into the stock market without thinking. The pros were afraid that they'd have to explain to clients how they missed the big rally.

It was this same sort of frantic buying, some traders pointed out, that pushed the stock market up sharply in both 1987 and in early 1990. In both of those years, stock prices came tumbling right back down.

There is a miniature merger and acquisition boom in the works.

Unless business conditions worsen significantly throughout the world, experts are predicting that there will be a pickup in the number of companies buying other companies as this year progresses.

But this won't be "Son of the 1980s." The experts say that the next cycle in the corporate acquisition area will be more predatory, with companies that managed to stay healthy through the last decade gobbling the best of the weak and sickly.

"There are a lot of people picking over the carcasses," said Roger Miller, a merchant banker with Cambridge Capital in New York.

"There is a lot of interest in genuine restructurings -- with a heavy emphasis on the word restructuring," said Miller.

But the buying hasn't taken place yet. Some experts say the buyers are holding off simply because the stock market is too high. And some are wary of making investments like this during a recession.

"Nobody is prepared to make a major strategic acquisition," said another mergers and acquisitions expert, although everyone is doing homework in case business conditions change.

There were about 30 percent fewer corporate acquisitions in 1989. And the value of the deals that were done fell by 50 percent.

With the drop-off in deals also came a falloff in Wall Street's take of the highly profitable mergers business. And for every worker whose life wasn't disrupted by a merger, there was probably someone on Wall Street whose lifestyle was harmed by the trend.

Soon, however, Wall Street and Main Street may be pulling for the same thing. The financial community obviously wants the revenues that mergers generate. But the average worker who hated mergers in the 1980s might be more receptive in the 1990s if it means his or her company will be made healthy again.

Hercules Segalas, an investment banker with PaineWebber Inc., specializes in the sale of unwanted business segments, which he likes to call "orphans." He is expecting the volume of these deals to double this year.

Jerry Seslowe, head of Resource Holdings, which represents numerous wealthy clients who like to buy companies, said most of the deals he is seeing are "plain vanilla acquisitions," many with private individuals doing the buying. And the deals are much smaller today, mainly because of the lack of financing.

Nowadays a buyer generally has to put up one-quarter of the purchase price, compared with just 5 percent to 10 percent a few years ago. That's why the wealthy few are the ones still doing deals.

Wall Street's traditional investment bankers and their corporate clients don't seem nearly as busy. Those investments bankers who still have jobs have been complaining for the past two years that their businesses will never be the same. And they are probably right.

But for the niche players who have money, the pickings these days are quite good. And in the months ahead, more companies -- healthy and otherwise -- are likely to find new owners.

How do you fight a recession?

"Close down Washington for six months -- reduce the tax burden."

"Muzzle the press ... that helps drop consumer confidence by their continual stress of depression ... "

"Reorient national priorities, become isolationist, cut foreign aid, get out of the Middle East, start thinking of America first."

"Convert the dollars being given to individuals who can't or won't work into public projects in order to improve our infrastructure, while eliminating the high level of unemployment."

These were some of the responses received in a survey of 75 chief executives conducted by the Burson-Marsteller/Kellogg CEO Research Forum. Each CEO was asked what they'd do to revive the economy.

Approximately 97 percent of the respondents believe the United States is in a recession or approaching one soon. About 61 percent project it will continue for another six months to one year, and about one-quarter think it will last longer.

While the overwhelming majority say the United States is in a recession, 68 percent believe it will be mild. Only 1 percent think the recession will be severe, and 30 percent say it will be moderate. The rest had no opinion.

John Crudele is a columnist for the New York Post.