State of the Economy and How It's Presented

[volinbham]

In your view, how bad is this economy? The tone from DC is that it is completely in the crapper. I know things are likely to get worse before they get better but how bad is it?

Unemployment is higher than it should be but only by about 3 percentage points.

Housing values are down (but they were way up).

Retirement funds are hit hard (probably the biggest issue for many).

I heard Obama say he's working to get the average American back on his feet. By definition, isn't the average American firmly on his feet? It is the fringes that are growing but they are still small percentages.

Most importantly, what is the effect of our leaders and media talking down the economy? Is this a great disaster, an uncomfortable period or something in between?

(sorry for the rambling)

 

[lawgator1]

I don't know of a single person who isn't seeing some effect on their daily lives.

When hosuing prices were increasing 30 % a yeaqr and everyone was living high off the hog of the churning market, no one cared and very few I know saved for the downturn. Now we are all complaining that others got rich off the system and we got screwed.

Thing is, in my 45 years on the planet I've seen this movie about three times already and I know I personally still never learn my lesson. I'm not very bright.

 

[dickens821]

Here's my view:

My rent that I would have paid for next year went down by something like 25 dollars. My hours at work, however, are being cut to all hell and I am having trouble finding a 2nd job.

 

[volinbham]

I don't know of a single person who isn't seeing some effect on their daily lives.

When hosuing prices were increasing 30 % a yeaqr and everyone was living high off the hog of the churning market, no one cared and very few I know saved for the downturn. Now we are all complaining that others got rich off the system and we got screwed.

Thing is, in my 45 years on the planet I've seen this movie about three times already and I know I personally still never learn my lesson. I'm not very bright.

I agree that people are feeling the effect but is that really a disaster? Take the housing prices thing. I've lost home equity for sure but much of what I had was unrealistic anyway.

I'm just getting the feeling that we are a bunch of whiners unwilling to experience ANY downturn. As a result, we turn to the government to "save" us.

I know there is legit suffering but I'm trying to get a feel for context.

 

[lawgator1]

I agree that people are feeling the effect but is that really a disaster? Take the housing prices thing. I've lost home equity for sure but much of what I had was unrealistic anyway.

I'm just getting the feeling that we are a bunch of whiners unwilling to experience ANY downturn. As a result, we turn to the government to "save" us.

I know there is legit suffering but I'm trying to get a feel for context.

Yep. But both the private industry and government people keep saying this isn't an issue of just riding out a mild storm. Its either bail out the economy or risk a very serious danger of completely sinking.

Are they right? Hell, I don't know.

 

[crazyguy]

It has affected us in small ways. It was more difficult to get a car loan that should have been relatively simple....the other side is that we have been doing a lot of purchasing because of lower prices.

I think the economy is in a tough spot, and we probably won't know for several years the effect of it.

 

[crazyguy]

Yep. But both the private industry and government people keep saying this isn't an issue of just riding out a mild storm. Its either bail out the economy or risk a very serious danger of completely sinking.

Are they right? Hell, I don't know.

I doubt that we could completely sink....but hey-I realize that I'm young.

 

[volinbham]

Yep. But both the private industry and government people keep saying this isn't an issue of just riding out a mild storm. Its either bail out the economy or risk a very serious danger of completely sinking.

Are they right? Hell, I don't know.

Even worse, they don't know.

I just get the feeling that our tolerance for a downturn is so low that we take high risks (trillion $ "stimulus" plan) to avoid any downturn.

The scenario you described (home equity up/spend/no savings) smacks of moral hazard when we attempt to mitigate any negative consequences from said behavior.

Bottomline, I don't know if they're right or not either but I'm getting the feeling we are about to do something that will ultimately be worse in the long run.

 

[iceman9]

I don't know of a single person who isn't seeing some effect on their daily lives.

When hosuing prices were increasing 30 % a yeaqr and everyone was living high off the hog of the churning market, no one cared and very few I know saved for the downturn. Now we are all complaining that others got rich off the system and we got screwed.

Thing is, in my 45 years on the planet I've seen this movie about three times already and I know I personally still never learn my lesson. I'm not very bright.

Same here, basically the same age, same lessons not learned. Must be human nature to think that once the market starts going up, its never going to adjust.

 

[dan4vols]

I can offer this about Tulsa,OK. I figure a night out at Applebee's,Outback, or Friday's is warrented after a weeks worth of honest effort...apparently everyone else does too.

 

[crazyguy]

Even worse, they don't know.

I just get the feeling that our tolerance for a downturn is so low that we take high risks (trillion $ "stimulus" plan) to avoid any downturn.

The scenario you described (home equity up/spend/no savings) smacks of moral hazard when we attempt to mitigate any negative consequences from said behavior.

Bottomline, I don't know if they're right or not either but I'm getting the feeling we are about to do something that will ultimately be worse in the long run.

It's the same reason that we have wildfires that go crazy every few years. We have stopped all fires from happening, so that when they do happen-the go crazy. America is all about not ever hurting. We all know that if you don't put yourself through some pain every once and a while and exercise, then there are consequences.

 

[BigPapaVol]

Actually, unemployment is at a reasonable point. 3 points better is considered fully employed and drives compensation rates way out of kilter. 5-6% is probably the right spot.

 

[BigPapaVol]

Yep. But both the private industry and government people keep saying this isn't an issue of just riding out a mild storm. Its either bail out the economy or risk a very serious danger of completely sinking.

Are they right? Hell, I don't know.

the banking thing is probably legit unless we figure out a way to slack up on some of the burdensome capital requirements (which are in place to save gov't capital, but we're spending it any way).

 

[dan4vols]

the banking thing is probably legit unless we figure out a way to slack up on some of the burdensome capital requirements (which are in place to save gov't capital, but we're spending it any way).

Maybe this is a man with dirty fingernails reading...but this sounds a lot like rats leaving a ship knowing it's sinking.

 

[BigPapaVol]

Maybe this is a man with dirty fingernails reading...but this sounds a lot like rats leaving a ship knowing it's sinking.

I don't understand.

 

[WA_Vol]

I'm not convinced a stimulus package was needed yet. I think giving the banking system liquidity to absorb the toxic home loans is all that is needed at this time.

I don't think this recession is worse then the one in the early 80's. It may become worse later on, but I think the stimulus package should have waited until then.

 

[dan4vols]

I don't understand.

To me it sounds like those who are in a position to not only know the economy as we know it is about to collapse, they are shedding intrests to liquify as much capital as possible before the economy collapses. And for the record...I think thats how this United States dies..the ecomony collapses.

 

[utvolpj]

Retirement funds are hit hard (probably the biggest issue for many).

that is the only thing that has changed for me but it could be a big win in the future.

My company is being hit hard but many of the jobs being eliminated are basically duplicates of someone else's. People and companies ran along like nothing was ever going to change and got hit hard for their short-sightedness. TBH, I am just not that worried because we have put ourselves in a position that, even if I lost my job today, we could make it with me unemployed for a few months.

Maybe it's really hard for me to be overly sympathetic when I felt I did most everything right and am being forced to help some bad decision makers.

 

[KB5252]

To me it sounds like those who are in a position to not only know the economy as we know it is about to collapse, they are shedding intrests to liquify as much capital as possible before the economy collapses. And for the record...I think thats how this United States dies..the ecomony collapses.

I think many in the know have very little faith that our politicians are doing the right thing to give it a nudge in the right direction.

 

[BigPapaVol]

To me it sounds like those who are in a position to not only know the economy as we know it is about to collapse, they are shedding intrests to liquify as much capital as possible before the economy collapses. And for the record...I think thats how this United States dies..the ecomony collapses.

I don't think the economy is about to collapse. That's just media rhetoric to get Obama elected and now to help him pass his massively liberal bailout plan.

 

[dan4vols]

I think many in the know have very little faith that our politicians are doing the right thing to give it a nudge in the right direction.

Call yourself agnostic of you like. But if you have any intellect at all you'll admit the way to beat the US, to make step 1...and pour the foundation of the establishment of the Anti-Christ would be to destroy the US economy.

 

[KB5252]

Call yourself agnostic of you like. But if you have any intellect at all you'll admit the way to beat the US, to make step 1...and pour the foundation of the establishment of the Anti-Christ would be to destroy the US economy.

I am not agnostic but i think you are a bit of a conspiracy theorist.

 

[BigPapaVol]

Call yourself agnostic of you like. But if you have any intellect at all you'll admit the way to beat the US, to make step 1...and pour the foundation of the establishment of the Anti-Christ would be to destroy the US economy.

Destroying our economy is going to be much more difficult than anything anyone has ever done in this world.

 

[wbailey7]

I think it's being blown out of proportion. I had this conversation with a friend a few weeks ago. You ever noticed how the news is the most depressing thing to watch?

You have the economy supposedly going to hell, murders left and right, people getting screwed by businesses and each other, and the worst of all, Florida winning another NC in football.

Anyways, if we are being told "how bad" things are going to become, we're not going to spend money as we normally would. I'm no economist, but common sense tells me that is a bad thing.

I'm spending my money no differently than I would with a booming economy. Given I'm only 21, and have a very stable job, I suppose I don't risk losing as much as others.

 

[volinbham]

Theory of Rational Expectations - if we believe things are going to be bad in the future, we are going to pull back on spending today, save all we can, etc.