I find it interesting all this negative talk about a recession – we have baby boomers retiring!! We don’t/won’t need as many cars, products etc., as time goes on. If our forefathers could see all of us whining after our hot showers, cups of coffee about our economy they would say we are a spoiled generation that needs to chin up and use our educated minds, high tech way of life and figure it out. Come on, do we all just sit around moping and whining and the media just pumps us more for more reasons to sit and pout. We all are better than this, no more easy money for a while – oh well, lets be thankful for what we do have, use our intelligence to fix the problems in our country and get this economy turned around. It will turn around in 2009, just wonder who has the insight to realize the reality of that.
so far housing has been about subprime loans being given to those that couldn’t afford them. the next effect will be those that lost their jobs and can no longer pay for the good loans that should have been affordable.
gas prices will continue to rise, so out of sight that people who thought they were freaked even hearing 4 a gallon, will think they wish they had 4 a gallon back. it will no longer be just a usa problem as other countries will join us.
the govt can not bail out but so many banks, but broken banks will be a common headline not just in the usa but worldwide.
more businesses will go into bankruptsy and jobs will become scarce due to many factors, including gas prices, logistics, finance,
television will no longer be affordable for the majority as will air conditioning, automobiles, vacations, restaurants, sodas, coffee, fresh foods.
the wealthy will be affected as their tables at dinner time will suffer because of a logistics nightmare.
Bush will go down in history as the presidency with the most negativity of 200 years.
April 1, 2008, only wishing this wasn’t a fools joke.
I read your article and find your question questionable! The big question is whether we can service our way out of a recession? With the approval of the Bush administration, Wall Street and the Fed, we have off-shored our manufacturing capacity. Without manufacturing, you can not escape a recession without going through a ‘DEPRESSION’.
All the indicators point to higher inflation and falling stocks. As the baby boomers retire stock redemptions will increase and the fed will print to pay seniors. Combine this with the present nationl debt and spending policies only very strong multinationals should outpace inflation.
Of course, we all realize rich bushies and neocons just care about propping up oil shares to the detriment of everybody else, even poor who now cannot afford milk and bread. Bush’s FY ‘09 budget just cut most clean water budgets, state envir. grants, even city meals programs…..why do people not revolt or have protests?? If people are not working, what else are they doing???
1 in 100 of us are in jail now… Could it mean perhaps that it is just for a free meal/cable??? It is not so difficult to fathom, if you are in dire circumstances….crime, teen preg., STDs, everything bad was going down until Bush…
If we do not demand our freedoms, they will be taken from ALL of us!!!!
Making war for peace is like screwing for abstinence….
Bush’s faulty logic is affecting all of us now…..so people, stop being apathetic or apologist…..
In order to fully fund the Social Security system, corporations should be penalized for sending jobs overseas in proportion to the loss incurred by the Social Security Trust Fund. Unless the perception for Social Security Retirement remains high, this American Dream will die at the same rate as home ownership. No middle aged couple would lock into a 30 year mortgage were it not for the expectation that their future income would sustain the burden of payments for: principal, interest, property tax and insurance for their lifetime.
Therefore your forum should focus on solutions to our nation’s fastest growing export: jobs!
We are allready in a recession, the american public let this happen, by being dumb enough to allow the Bush/Cheney/Republican party control all 3 branches of government. Dont cry now.
Mr. Powers,
You answered gracefully and with some data that appears to disprove my statement about regressive taxes. I will admit I grabbed a couple of your points out of context. When you fold in the effect of lumping in jumbo loans or people assuming excessive debt, it puts the idea (even if not specifically stated) of people getting themselves out of their own mess in a different light.
Your comments about your personal history also speak well for you. While I still believe there are forces, including government policy, that make it considerably more difficult to succeed than in past generations, you appear to have beaten the odds. So I won’t try to argue with you, you know whereof you speak.
I am just very tired. Very tired. But I do hope you will have compassion for those who, whether through their ‘fault’ or not, are sinking. At the risk of bring Chicken Little, I remember horror stories my father told me about the Great Depression. I don’t think a recurrence is inevitable but I don’t think it is highly unlikely, either…
Stephen,
Any statistic is disputable. the methodology used in its formulation-compliation is subject to debate. Income alone is hardly a measure of aggegate wealth/income.
Here’s an abbreviated set of stats gleaned from US Statistical Abstract, Table 675 Census Bureau: % Distri-bution of Aggregate Inome by Each Fifth 1980-2005. In the past 25 years the Top 5% went from 16.5% to 22.2% of Aggregate Income. The Highest 5th went from 44.1 to 50.4% respectively. But interesting is the fact that the lowest 4.2 – 3.4%; 2nd 10.2 – 8.6%; 3rd 16.8 – 14.6;and the 4th 24.7 – 23.05 respectively all experienced a decrease! How does that square with your argument that the capitalism works for the vast majority of Americans? As an economic system it is not designed to work for the majority… but rather for those with the “skill sets” most conducive to capital accumulation. Also too, where does inheritance factor into your equation? If equal opportunity really existed or was a goal of this society then inheritance would be severely restricted, including “legacy preferences” at most elite universities which often are more valuable for the contacts/friendships made than the education acquired. Just throwing another log onto this fiery discussion…
I believe that the Fed has created this
nightmare by overlooking the fact that
people just can’t pay off loans when interest rates are elivated above what they anticipated and were likely led to believe by many Mortgage Brokers.
It is the responsibility, in part, of our government to assist all people that were lured into the “American Dream” home by poorly structured loans. In addition, Credit Card rates
are out of control. The rates charged
today were considered illegal in the distant past. Our greedy financial institutions have created the present day economic scenario and they should be willing to let people work out their loans, it would be to everyone’s benefit. After all, who is left to buy the REPO’S??????
My GUESS is the housing market hasn`t started it`s real tumble…even many 1/2 priced forclosure homes aren`t moving. At some point many people who can afford to make thier house payments will might choose to walk away even though it damages thier credit.
Rising Credit Card defaults might be a result of “giving up”…so why not have a good time before I do.
In many ways our econemy is in good shape…but housing could still have impacts we are not aware of yet. Add to this the ageing/retiring baby boomers who are going to start pulling out 401k money…could be a rough time ahead.
One more thing…. inflation!
What we forget is that we have not had inflation due to “substitution of US goods with cheaper China goods”. However, we now have a problem. Not a whole lot more to substitute AND China is experiencing inflation too. So even Chinese goods are going to start going up in price….
I think we are in for a rougher and longer ride than most predict. The “real recession” started 4-5 years ago and further enhanced by the Bush tax cuts, but masked by the housing boom and related expenditures for capital goods and expanded HELOC borrowings feeding consumption.
Now the “so-called middle class” and in reality the lower middle-class by measures of discretionary income is not only further pinched by rising inflation in food, energy, healthcare, etc, but also burdened by having over-leveraged their assets.
In the meantime, the top 10% have put their Bush tax cut savings into private equity funds. And see how these have ballooned since the Bush tax cuts.
The Fed can’t stop this and further lowering of rates is just going to make fighting inflation harder. We might even get back to 12-15% yields on the long treasuries by 2010.
The solutions are to increase taxation on the top tiers, reduce taxes for the middle class, remove foreign tax credits for US companies sending jobs overseas, provide job credits and investment tax credits. This should increase consumption and also, hopefully, bring manufacturing jobs back to the US.
With higher US incomes and consumption, corporations should benefit so the above is really pro-business, not anti-business. This is what made America great in the 50’s and what is now driving the economies of India, China, Brazil and Russia (BRIC). Instead, we are now exporting raw materials and importing finished goods, making us a “developing nation” while BRIC is behaving more like a developed nation.
Time to return the country to the people and get solve the recession problem…. Enough experimentation with “Supply-side economics” (Reagan & Bush)…. Back to John Maynard Keynes!!
Ryan & Andy,
Great debate! Ryan makes an excellent point about consumer debt. We need to stop using debt to purchase things we can’t afford and don’t need. The problem is very easy to see, and it goes well beyond credit card purchases. Go to your local BMW dealer and ask them what percentage of their sales are leases. I’ll give you the answer because I asked this very question when I bought my car about nine months ago… it’s anecdotal but my sales person quoted 8 out of 10 cars that he sells. I’m not knocking auto leasing… it makes sense for some people. I leased mine but only because it made sense for me (I could afford to pay cash, got a very low lease factor and plan to change vehicles within the next few years). But he said they were leasing vehicles whose payments were up to 30% of the customers’ take-home pay!!! That should be the top end of your mortgage payment… not for you to rent a car! I have neighbors who make in the $80k to $100k range who bought $400k houses with 10% or less down. They then furnished their 4,000 square foot McMansions on 2 year, no interest and flat-out revolving credit. Their stuff literally owns them. This is a dangerous way to live and is, unfortunately, all too common. Believe, most people in my family operate the same way so it’s not just my neighbors! Credit has been very easy to obtain… and people have been taking whatever they can. Now I suppose folks like these are feeling a “crunch” and feel like they’re being left behind as the economy slows. But guess what… they aren’t being left behind. They left themselves behind by over-extending themselves during the good times, which is precisely when they should have been building surplus in their financial profiles. Those of you who have done this; please do yourselves a favor and work hard to get yourselves out of this situation. It is a recipe for disaster. I over-extended myself in college and never felt more financially free than the day my wife and I paid off that last credit card and high-interest car note (college kid with no income rate). The stuff you are leveraging your financial security with is simply not worth the pain it will eventually cause you.
All the best,
Stephen
Andy,
Whose being niave here? First sign of danger! the sign were showing years ago but it’s funny how you seem to forget all the glowing recommendations to buy into housing etc. Everytime I watched MSNBC or any other money related program on T.V. they were almost always bullish on the economy except for the few prudent analysts who saw warning signs of what seems to be occuring now. Maybe you should read some books on the dangers of excessive debt. I don’t disagree that when bad new occurs they don’t go all out on it but I can say the same about the strong bullish sentiment that pervaded the media before the sub-prime ‘crisis’ occured. It goes both ways the media will look for signs that thing will get better as well but currently things don’t look good. If the inflation numbers are down they will hype that as an indication of well our economy is & if inflation goes up the hype the opposite as well. Most people these days especially these experts seem to be forgetting fundamental economics. You seem to have a grasp of phychology but maybe you need to brush up on economics. My point is that the media will blow anything out of proportion that they fell will boost their ratings whether it negative or positive, are you saying that they only captialize on negative stories? I think what you meant to say in the post I originally responded to was the consumer debt fuels 2/3 of the US economy. Consumer spending has been for the most part fuelled by debt, ‘housing refinancing & credit cards’. I guess it kind of pointless for us to argue about it though as I think you are wrong with your unconditional optimism and you think I’m wrong with my pessimism. Have a great life and protect the wealth that you have created the best you can.
LG Speaker,
Good points. I would add to your commentary about buying a new house in the near future. I’d recommend buying in the least “hot” submarket you can find. In the Houston area, that means don’t buy in the high-dollar locales within loop 610… go for the suburbs. The burbs surrounding Houston have seen very little price appreciation during the boom and should fare a lot better than inner-loop homes that have been appreciating at 10%+ per year. You’d have to apply similar logic in your neck of the woods.. but my point is that it’s kind of like reducing your beta in the stock market. Time to move to the safest bet you can muster. It’ll all turn back around in time and we will once again have the opportunity to “invest” in our homesteads as potentially appreciating assets. For now, I think we should all look at our homes as rentals… don’t expect to pick up capital gains on them for a while. Don’t speculate on the wrong side of the curve. Too much is at stake for that kind of bet.
Geez… and look at Table 1, not Table 3!!! I was looking at Table 3 the other day for personal reasons so it was fresh on my mind. Table 1 includes ALL individual tax returns… not just those of people who itemize their deductions. I really need to take more time on these postings!!!
Also, I meant to say that I didn’t intend for my message to be misunderstood… not understood 
Sorry… I’m typing these things out very quickly… so my spelling is horendous and I even pasted in the wrong link for the IRS website!! The site to visit is: http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133414,00.html
Again… sorry!!!
SwilliamP:
I certainly do not mean to offend you or anyone else. I was responding to someone in my original posting who was claiming that the economy on the middle class… that the middle class was forced to buy big houses and throw themselves into debt. My response to that line of thinking is that just because you COULD get a large loan does not mean you SHOULD get a loan. All other postings I’ve made started from there; so I hope I didn’t allow myself to wander off into such a deep rabbit hole that my perspective could be easily understood. I fuly recognize that times have gotten tough. My central point in all of this has been from the perspective of peoples’ best bet in surviving in today’s world…. it all comes down to self discipline and taking your financial future into your own, capable hands. In other words, do everything you can possibly do to live well within your means, don’t bury yourself in debt just because the banks would recklessly loan money to you, don’t allow your career to stagnate, don’t try to be a real estate speculator, don’t take out home equity loans to finance needless consumption, etc. No matter what reality you claim I am missing, doing the opposite of any of these simple themes is definitely a bad idea. I recognize that jobs have been lost… but you should recognize that the typical American family has terrible fiscal responsibility. The plight of most peoples’ struggles is a healthy blend of external AND internal factors. I’m sorry if you find this offensive, but I do not see much honor in someone allowing themselves to become a victim when they should have plenty of tenacity left in them. If you simply decide to sit the game out when up against a challenge you should not get bitter about where you end up. I’ve had challenges in my life and I faced them head on. I’m not always right and certainly have learned a lot along the way… but I follow the teachings of my father… live a good, moral life and always fight for survival. Give up and you automatically lose. On to another point you made though, because I think it makes for very interesting debate material…
I disagree with your assertion that the tax system is “regressive”. Go to the IRS website here (http://cnnmoneytalkback.blogs.cnnmoney.cnn.com/2008/02/20/get-ready-for-a-recessionin-2009/) and click on Table 3 for the year 2005 (latest available statistics. Let me summarize what you’d find out about the individual income tax structure we have today:
(1) Top 3.4% paid 51.3% of taxes
(2) Individuals/families in the $200k to $500k range paid 17.3% of taxes. Again, the median income in this range is $240k, so it’s heavily skewed toward the bottom of the range.
(3) People I would really call rich (>$500k) paid 34.3% of all taxes. This is the top 0.8% of all individual taxpayers!! Very small group, very large contribution, I’d say!
(4) The “rich” were only outdone by the upper, upper middle class ($100k to $500k range) who paid 37.3% of all taxes. My family falls in this range and our annual federal income tax bill ranges from $60k to $90k every year, depending on bonuses, AMT considerations, etc. Our effective tax rate is ALWAYS north of 21%.
(5) The top 13.7% paid 71.6% of all taxes. This is basically everyone that makes over $100k.
Take a look for yourself. I’d be very interested to hear your remaining arguments on the individual income tax structure after you’ve reviewed these indisputable statistics. You may very well have some good outstanding points and I would like to hear them. It is debates like this that help us all understand different perspectives… and I appreciate the opportunity to debate with you on this.
Take care,
Stephen
No one can guess where the world economy is heading in the next few years – but we know who is steering the course. It is not who we might think – our governments, central banks, consumers, etc.
The course being charted now is in the hands of immensely powerful corporations that have the lawyers, the law, the governments, and the people in their grip on every country on earth.
Our purpose on this planet has somehow been reduced from spiritual pursuits to monetary.
Those that are in power now will not stop draining the resources of this planet for profit until every ounce of oil is drained, every tree is cut, every mineral extracted, until nothing is left but the worthless paper wealth left on corporate balance sheets.
Until then, we are only playing games guessing whether or not the economy is heading for recession, depression, or good times.
Nothing has really changed.
You either serve a higher calling, or you serve Caesar.
And we know what happened to Rome…..
Comment to Mr. Powers: Your comments, whether right or wrong, suggest a degree of detachment and insulation from the hardships of the last few years, that ordinary people cannot connect even if your logic is right as rain. One comment I did find offensive, that there is no one to rescue us and we need to tough it out like previous generations of Americans have. The problem with that is, the deck is stacked now much more than then. The tax structure is more regressive and competition from slave labor half a world away can’t be defeated by greater effort at one’s job, or a second (or third) job, or creativity. A basketball team can play a world-class game and lose if the refs are crooked and throw the game with bogus foul calls. That is what the state of the economy looks and feels like. This writer is not lazy; I have a Master’s and (if not corroded with time) an IQ in the genius range, but nothing I can do will achieve the results my father could have 2 generations ago, with much less education, when the rules were more fair. I’ve worked two jobs before and likely will again yet am losing ground. In the 1930’s there was a high incidence of suicides based simply upon people being flat broke, unemployed and not wanting to be a burden. I don’t know if we will see that again but that despair level, I believe we will see.
In closing, you are welcome to your opinions and they may be very intelligent ones. But please don’t talk down to people as if they were lazy, spoiled children who are willfully wallowing in self pity and don’t want to help themselves. Puh-LEEZ. Things are not what they seem.
Three reasons for US economic downturn;
1. Produces very little
In the last 30 years the US has been slowly moving to a consumer dominated economy, most production has moved to China.
2. Debt
The consumer & Government has not only been consuming savings, but also equity and becoming more indebted.
3. Greed
Brokers/Advisers, Wall St CEOs etc are taking advantage of the system and YOU. They earn big bucks off commissions/fees/bonuses and only think short term when filling their own pockets with cash. You on the other hand have to work hard just to survive. Do you think that the rich guys are going to worry about the price of bread/milk, heating etc…, of course not.
Wake up!!!, you are being taken for a ride ….
A recession is definitely coming in late 2009. Note: Our government is killing our country with excessive wasteful spending!!! Housing will bottom out in 2009-2010. Housing market will be very soft for the next 4 to 6 years (great time for ‘cash’ investors to buy), though, mortgage rates will go up to 7% to 7.5%. It’s ok to buy a “good deal” now, if you need a place to live-negotiate well!.. Wish everybody out there the best!.. Work hard, stash your cash, and raise hell with your ignorant bloodsucking politicians… All this economic strife was/is created by BIG government wasting your tax dollars, poorly thought-out economic strategies, and rampant government greed… Fix the government and you fix the problem! Dig?
Mickey – the only thing that separates us from the rest of the animal kingdom is the ability to reason at an advanced level. That’s it. The spiritual minded needed a convenient word for it so they dubbed it a “soul” … an imaginary, intangible life force that is essentially a complex brain activity that allows us to make rational decisions. Unfortunately, as animals, that process of rationalization is often thwarted by the power of primal instinct. Remember, we are animals after all.
It’s a dangerous combination … enlarged brains/heightened activity delicately balanced with basic primal urges. The lion reacts more than he thinks … as does the gazelle .. and nature found a way to make them codependent upon each other in the circle of life. If lions all of a sudden developed the ability to reason (to the same degree we do) it would throw their entire ecosystem out of whack.
Mankind is relatively young compared to the history of life on this planet and the flaw in nature’s design is finally coming to fruition.
That’s it. We aren’t divine, chosen beings meant to rule this planet under the watchful eye of a puppet master. We’re organisms decaying on a rock.
All of this is merely to illustrate the point that regardless of which fairy tale you happen to believe, the cold hard truth is that we’re simply a part of nature. A flawed, self-destructing part but a part none the less. The strong survive. The weak … don’t.
That said, maybe some of you bleeding heart homosapians should put that enlarged brain to good use and try to tip nature’s scales in your favor … like, oh I don’t know … go to college? (sort of like lion cubs practicing the hunt at 6 weeks of age)
Ryan – no, they haven’t. At the first sign of danger, the media goes to Defcon 1 and feeds off the marketing power of paranoia. Don’t be naive.
Mickey – I should expand on the “sugar momma” comment I made in my previous post. My wife was a stay-at-home mom until about nine months ago… we switched roles. She went back to work and I am now at home with my twin toddlers. Prior to our kids being born we were dual income, no kids… making $200k-$350k per year depending on bonuses. We have chosen family over maximization of wealth for a while… so don’t think you’re talking to some crazy workaholic capitalist that cares nothing about money. We accomplished a lot in our careers and finances prior to the kids being born and, like most decent people, definitely put family, friends and our community ahead of getting as rich as we possibly can. As lucky as some would think we are by reading what I just typed (the plight of the upper middle, right?)… my point is that luck had very little to do with it. The only luck that either of us have is what we have upstairs in our noggins and both being born to nurturing families who encourage us and keep us down to earth. The rest was accomplished through determination, prudent decision making, remaining focused on the future at all times, and imposing self-discipline as our income rose from entry-level to where it is now. We’d rather keep our bling in the bank than wear it around our necks. Get “rich” rather than try to act rich. That’s how you build wealth.
Mickey,
Yes, this dialogue has been very fruitful! I really enjoy debating with someone on a rational level. You know… in a manner where my “opponent” does not resort to calling me a Fascist.
You and Andy both bring up equally good points. I believe Darwinism does accurately describe nature and, perhaps unfortunately, economic society. I do believe this though… you cannot fight human nature. Free markets work better than socialism (in any form.. partial or flat out Soviet-style). Like you, I do not like the fact that this means there are a few big “winners” in the economy and a some real “losers”. Most of us are somewhere in between these two poles, however, and are in fairly good shape. We have places to live, can eat and clothe ourselves and even have a little left over ice cream and entertainment. The same cannot be said for victims of the Socialist system. So I’m no here to say the system is perfect… it’s not. I don’t know the answer to your question regarding techno-peasant living and distinct classes. I think the government has a role to ensure that markets that need to be regulated are prudently regulated (but cautious not to overdo it like California!!). White collar law enforcement is currently under-utilized in my opinion. I also believe that we, through our government, should assist our fellow citizens who cannot survive well on their own. I don’t mean your average crackhead welfare momma (I’m going to take flack over this one!!)… I’m talking about the disabled.
I think, perhaps, dialogue is the key to our evolution from Darwinistic cannibalism. Think about it… humans have been struggling with our self-destructive natures for milennia. We have to beat morals into our children’s heads (religion, parenting, education) to train them away from their selfish natures. Yes, people are selfish and can be quite nasty. That’s the animal side of us. I think the first step in evolving past this is to use our gift of communication to point out to ourselves just how terrible we can be if we give in to our urges. It is in our nature to destroy ourselves and our environment… but in order to survive, we need to make sure we understand that it is in our hands to rise above it. Until recently, environmentalists had it all wrong. We don’t need to “save the Earth”. The Earth is going to be just fine. We need to save ourselves and our co-inhabitants from eventual extinction before the Earth does it for us.
Sorry.. I just went way down a rabbit hole. The point of my postings has really been all around what individuals should think about doing if they themselves want to survive/better their position in this economic environment. I think my ideas are very rational. I’ve used them myself and so have you… to great success. You mentioned that your scenario may have been more coincidence than anything else. That’s great. May I suggest that you turn your luck into others’ guiding light? You may have lucked into your situation somehow but you have the opportunity to be a role-model. I had no role model for my success either. My family is working class. My grandmother lived in an abandoned cotton gin in the Great Depression, my grandfather was a truck driver, and my dad spent most of his career in fast food store management. The guidance I received from my father was that he didn’t want me to struggle like he did. He encouraged me academically… really encouraged me… and did his best to help me map out my plans. When he passed away I had to figure out the rest on my own. Now it’s my turn to focus on my children’s futures so that they can have a better life than I’ve had. And BTW – my wife has done very well for herself too. She grew up in Reynosa, Mexico, came to college in the US (as a legal citizen!!) and is now a 32 year old executive at an S&P 500 company. She is my Sugar Momma for now and I think she has great potential. Talk about a real American success story… look no further than her. She never took a single dollar of ethnic or sex based scholarship money. Affirmative action had nothing to do with her success… she’s a hard working, magna cum laude, machine at work and yet a wonderfully nurturing mother and wife at home. It’s amazing.
Houston is not in that bad of shape. Our real estate market did not get out of hand like in other areas of the country. We have a lot of suburbs and plenty more space to build more houses so the prices have remained very reasonable. As for the local economy… there are winners and losers at all times but on the whole the city is in great shape. The reason is that we’ve diversified. This city was pulverized a couple decades ago because oil & gas was the only industry we had going for us. It’s a different place now and we’re a pretty diverse city. Go to CareerBuilder and look up jobs in Houston. It’s still gong strong here. Maybe you should move! I think you’d really like our housing costs. Even Ohio is off the charts compared to Houston.
Take care,
Stephen
I believe the economy is more resilient than the media suggests. I look for the “unseen” or unthought of scenario to come from who knows where and tips it one way or the other. I for one continue to buy stocks.
Andy,
Haven’t they been telling us for years that everything is going to be O.K. The media during the past decade has been the cheerleader of the stock market & economy. Telling us that the experts on Wall St say everything is going to be great. Yet none of these experts except for a small minority even thought that this housing mess was going to happen. DOW 20000 was forecast by some of these experts back in 2000. Did any of those supposed experts expect the internet bubble to pop? NO they didn’t. How about Enron & Worldcom? The experts seem not to understand that if you keep pumping money into the economy via debt that eventually prices of good & services will increase. Frankly I don’t know what is going to happen but I know that I’m going to diversify my portfolio to contain some precious metals & oil. A good book to read is ‘Crash Proof, by Peter D Schiff’.
Andy,
Name me one animal that takes from nature more than it needs or one that knowingly destroys its own environment?
Squirrels certainly hoard seeds/nuts and beavers create ponds with which to live, but neither adversely impacts the environment like human beings have in the name of “progress.” Forgotten seeds/nuts eventually become plant or trees to renew the cycle. And I could go on…
There’s simply way too much counter-factual evidence to refute your Social Darwinism – survival of the fittest – mentality. Why is it that “human nature” and Social Darwinism are uniquely Western ideologies that have “evolved” to justify the domination of the ruling class?
Look beyond Anglo-American culture or perhaps Western culture in general for other justifications for hierarchy , etc. my point being that Darwinism is just one among many competing theories, religions, or philosophies to justify inequality. Pick your poison. It’s out there!
Whether you choose to agree with one or another w/o critically analyzing its presuppositions is intellectually dishonest, if not lazy! Hardly an attribute for survival in your war of all against all.
Mike S. from St. Louis – This isn’t about turning around and ignoring a problem. I’m not suggesting you sit idly by while a recession narrowly misses. You can still better your situation, regardless of the circumstances which is why I concur with Stephen Power’s insight and suggestion.
I just don’t see a point in compounding the problem by buying into the doom and gloom media blitz.
It’s clearly been spun and exaggerated to the point where we’re supposed to be petrified. What good comes from a drop in confidence? Consumer spending fuels 2/3rds of our economy.
I will certainly read the FACTS, formulate my own opinions and make adjustments to my finances and portfolio accordingly (if needed). Unfortunately, as has been proven on this very page, not everyone has the fortitude nor the mental capacity to do the same. And because a substantial portion of my portfolio depends on these people acting rationally, I take exception to the negative spin in the press.
And so should you.
Mickey -
Darwinism, my man. We’re a part of nature, we don’t control it … regardless of how arrogant we’ve become as a species. At the end of the day, we have to adhere to her rules.
“The world needs ditch diggers” – Judge Smails
Stephen,
We do share much in common but differ with regard to fundamental assumptions, particularly “human nature”. I fail to see how everyone pursuing their own selfish interests, however enlightened, will result in the “common good” – if there is such a thing. Moreover, there are simply too many examples of where culture has blunted/overridden what you deem to be human nature. But where you say:
Anyone could do what you and I have done in this day and age. If they made the decision to not follow the path to financial comfort, they should not whine about it. That’s it.
Im not so sure. This could be a cultural difference that cannot be taken for granted or replicated at will. If the “role model” or “example” never existed how does one learn to “succeed” playing someone else’s game? My so-called “success” is more by accident than by conscious design. I would hardly recommend trashing one’s career at 40 and starting over. And enough about us!
How would you go about preventing the formation of distinct social classes and the descent into the “class warfare” experienced elsewhere? Cause that’s where we’re headed… Whether Houston or Akron the economic engine isn’t working for the vast majority of the population anymore. To write off that majority as simply the victims of progress is a frightening prospect. Bienvenidos al Tercer Mundo!
I don’t think either of us wants to live in a gated community with guards at the entrance and broken glass decorating the top of the walls surrounded by a moat – which I don’t! It gives new meaning to “castle.” Perhaps this techno-peasant living in the hollowed out postindustrial wasteland of NE Ohio is witnessing the emergence of a neo-feudalistic society and all that it entails. How ’bout you in Houston?
I hope this dialogue has been fruitful for you and those disposed to read the exchanges between us. I have enjoyed it immensely. I do not agree with you but I will defend your right to say what you will. [Voltaire] Take care, Stephen!
Mickey
Hmmm, I wonder if the same dialog occurred in England when outsourcing to America became fashonable. Free enterprise does not stay put but goes where the innovators go.
Completly Unrelated: I wonder how many credit card applications will be in my mailbox tonight…
I have to laugh at the people who think headlines shape people’s view of the economy. Iraq, sure, because Iraq is on the other side of the world and totally removed from every day life. But the economy? We see the economy in our paychecks, our jobs, the companies we work for, the prices we pay, etc. If you think everyone else is an idiot because you are the only one who sees “the big picture” without being “misled by the media” all you are showing is your own unbridled arrogance.
The general tone here is supportive of the reasoning behind why networks show violence instead of sunshine & lollipops. Simple people love bad news. Doom & gloom sells. I think psychologically it empowers the powerless. As if predicting your own demise provides you with at least some degree of control.
It’s pretty comical.
I especially enjoy the selective comparisons to different eras like we can simply pull out one or two similarities from 4 different down cycles over the last century and ignore the contradictions that hold far more relevance.
“A Depression like in the 30’s”
ahahahaha
Ignore the ridiculous anecdotals about how one guy lost his job on the assembly line signifying the collapse of western civilization and listen to Stephen Powers. He’s the only person besides here, myself that has even a shred of sense and insight.
The sky isn’t falling.
Regardless of what the bloodthirsty, irresponsible media … or your FedX guy tells you.
Hi TortFreezer. Below I’ll repaste your posting a respond point by point…
Stephen Powers:
Fiscal responsibility and long term planning is what provides jobs for the middle class. Grasping at short terms windfalls without reinvesting it in the company and its resources is neither fiscally responsible, nor long term planning. [SP] I agree.
A skilled workforce is a valuable resource, not just the CEO. If a company sees returns it needs to use those to develop its workforce, not chisle it down. [SP] Agreed.
An investor is a valuable resource. Why should they not share in the returns as the CEO does? [SP] Agree to an extent. An investor takes risks in their investments and can garner superior returns to any CEO… just invest in the stock market. CEOs are emplyed and compensated at rates of remuneration that are voted on by their shareholders. They don’t set their own wages. And they have a lot at risk. It’s either lead the company to success or lose your job for them. The payback for all of that pressure is their compensation package.
Eventually, you get where we are today: The workforce no longer has any money to spend on the products the company makes, and the foregn workforce never made enough to purchase the products the company makes. [SP] Only in industries that are becoming obsolete. Do you see employees of Google, pharmaceutical companies, or energy companies complaining?
A century ago, Henry Ford was laughed at for starting the 5$/day wage. Other car makers said he would go out of business, and laughed at him. They were also angry becuase they were afraid they might have to do the same. [SP] He was pioneering a new market and made the bet that paying well would pay off. Had the automobile not taken off, his employees would have failed with him. This happens a lot more often than not. Microsoft, Dell, Compaq, Google, energy trading firms, etc… they all did the same thing that Ford did. Once they established their markets, however, the premium pay that their employees were garnering (for taking the risk along with their companies’ investors) came back down to earth. Such pay levels are unsustainable over the long haul because it would drive inflation through the roof…
Ford’s response? †I pay them that much so they can afford to buy my cars.â€
Ford didn;t go out of business, it exploded with a better workforce and more efficient production. Many of those copmpanies who laughed at him are long since gone.
It is a valuable lesson you need to understand about the bottom line. [SP] See above.
China doesn;t buy the crapo we make becuase it can’t afford to. But after only watching the bottom line and passing what returns to the top, neither can the American worker.
So here we are. At the raggedy end. And people like you won’t understand it until the bailiff comes for you that Henry Ford was right. [SP] We’re at the raggedy end of the manufacturing era. These great employee opportunities still exist for the middle class. They’re just in the services sector now. They’re not in the manufacturing sector anymore because it has hit its peak and competition elsewhere can do it cheaper. So actually you’re wrong about me… I believe in what Henry Ford did at the time. It’s just unsustainable in the long run.
The bottom line is not about just today, but the next 25 years, if you want to stay in business. [SP] If you want to stay in business, you have to adapt. Find the next niche. It’s not in manufacturing and assembly lines anymore. We are now the world’s investment bank (one of them anyway) and technology providers. If you’re still working on the assembly line and have many years left in your career, I’d recommend changing game plans. Don’t just stick where you are and expect the world not to change around you when you can easily see that it is.
Its a pity you are so short sighted. [SP] Contrare, my friend. Short-sited is thinking that simply raising wages across the board will do anything but cause widespread unemployment, inflation and an even more competitive America in the global economy. That is exactly what the Soviet Union and now the likes of Venezuela have tried… only to find that the social security blanket does nothing but make them utterly uncompetitive, and their citizens into a very large lower class.
Mickey,
You make very formidable points. Many of them correct, but some of them off my point completely. No, I did not mention issues around slavery, the plight of the Native Americans, or people in countries outside of the US today who are “victims” of our economy (i.e., their corrupt leaders want a piece of the capitalistic pie so they essentially enslave their citizenry for their own benefit). Such tragedies have and still exist. I have American Indian relatives in my family. Most of my friends and all of my family are still very much middle class… make less than $100k per year, many of them school teachers, some of them with no college education at all, etc. My little sister is lower middle class. She had a child at the age of 15 and, now 29, has still not managed to climb out of a very difficult economic and parenting situation. At least she owns up to the things she has done to end up where she is. She never tries to blame anyone else. She is not a victim… she’s someone who has made her choices and lives with them. I completely support her in that. I have not abandoned the middle class in any way whatsoever. I am surrounded by the culture of the middle class and participate in it fully. But that doesn’t mean I cannot see the mistakes so commonly made by people within the class. Maintaining a VERY short-term fiscal philosophy, under-investing in education, lack of creativity & optimism when they see potentially detrimental change headed their way, general unwillingness to try to understand how the economy really works beyond what they get from flashy sound bites in the media, and some of the worst personal money management one could imagine.
My overwhelming point is that the system in which we live works for the vast majority of people in this country. That is not to say that the vast majority of people are living large in their American dream. I say the system works because the vast majority of people TODAY have the opportunity to make it work for them.
You and I are not in very different financial circumstances. You have the net worth profile of someone who is upper middle class and has made very prudent choices (probably have made mistakes along the way just like everyone else though)… just like me. How did you do it? You INVESTED in your education, CHOSE a field that could make you decent money, worked very HARD and SMART, and SAVED. My only point is that, aside from people who are disabled, anyone could do what you and I have done in this day and age. If they made the decision to not follow the path to financial comfort, they should not whine about it. That’s it.
I came from a middle class family, lost my father when I needed hom most, had to pay for my own school and went in to debt doing it (paying off very nicely now though!), made personal financial decision based on their impact on my family’s long-term well being as opposed to 100% instant gratification, and remain flexible and ready to make whatever move I need to make next to ensure that I am well compensated for whatever jobs I take in the future. Does that make me a capitalist pig or a better father? I mean, if I’m going to be away from the house 8-12 hours per day busting my butt, shouldn’t I try to spend that time doing something that is valuable in the market, that I enjoy doing or can at least tolerate it for the money , and that has the best chance of contributing to my family’s long term wealth?? I think it is more than justified for this simple reason… if we go into a recession and we end up an unemployed household situation, my wife and I could go years (not days, weeks or months… YEARS) without a job. We’re not lucky to be in this situation. We didn’t inherit any money, have some rich uncle get our feet in the door to good jobs, nothing like that at all. We worked our asses off, invested, and sacrificed for it. Just like you. With $150k in the bank and no mortgage, you could probably go a couple years if you had to. Congratulations. You’re doing a lot more right than the vast majority of Americans who have come to believe that they’re ENTITLED to the same level of prosperity that you have ACHIEVED.
We could have many other discussions around “victims of the miracle”. I think you’d be surprised how much we would agree on most of those subjects. I’m actually quite a humanitarian, supporter of animal rights and environmentalist. But the preceding few paragraphs of this posting are a reiteration of the points I’ve made so far. Go back and read them if you want. Personal responsibility… our culture lost it somewhere along the way and everyone thinks they’re a victim.
Take care,
Stephen
Stephen Powers,
Having read your various commentaries I must take issue with the “inevitability” of the linear path of developement you impose on all societies. Your model of economic development is ahistorical and treats it as if it were a “natural” process immune to human control.
Were the plantations established in the West Indies and the American South “natural” developemtns or were they the result of conscious decision-making by elites willing to impose their will – class warfare – on other peoples? If not, please explain to this audience why the Native Americans only traveled so far down your path of developement? You and your kind gloss over these historical factors or treat them as “externalities” in your economic calculus, which is to say, they are not even factored in to your calculations.
The visible hand of the IMF and World Bank, foreign direct investment, etc are not “natural” and/or inevitable processes but reflective of the values and choices made by political-economic elites both here and abroad to replicate the favorable conditions for capital accumulation wherever they can on a global scale.
Platitudes to the effect that we all benefit in the end obfuscate much human suffering and exploitation experienced by the “victims of the miracle.”
And by the way, with three degrees and hard work, I’ve managed to save 150k, pay off my mortgage, and sock over 100K in my 410K. But I realize that my skills are those required by the ruling class. If they were to change their minds or find someone else to do it cheaper, things might be different. In “crawling” your way out of the middle class you have transferred your loyalties elsewhere and “blamed the victims”. Shame on you!
Its very simple. The economy can recover, but we have to learn from our mistakes. We gave out too many loan to people who had no business buying homes and other expensive items. The builders have flooded the market with new homes willing to qualify anyone! Then guess what happened?? Foreclosure! Now add to that every media outlet constantly producing doomsday headlines and scaring everyone to death. Wake up! We need to recover and it may take a while.
Here in california we have a 14 billion deficet even with the state getting all those fed grants driveing up a fed deficet. Most of the money goes to over inflated government employees wages,bennifits they say cost of liveing raises. People who cant make it in the privet sector. They compare city wages to other city wages and county to other county wages. Big corperation pay american workers 1/4 and less of government salerys no bennifits. Why dont we compare government to corperate pay.CNN has published the pay of the best corperations to work for,There pay is small compaired average government pay here in california, The playing field needs to be leveled or we will never have a smooth running economy. California is looking for ways to cut its budget. So they are looking at programs to cut, when all they have to do is keep all the programs and look at pay structure. If corperate IE walmart, sears winco, and a host of others big corperations only pay a certain X amount then the government needs to look at what is reasonable pay. If government workers dont like a reduction then let them get in the privet sector and show us how a person makes $30.00 $40.00 $50.. with full bennifits. Mabey they can, and that will be great for the economy. If not then at least the tax burdon will be lifted off the privet sector lowering deficets, and putting more money in privet sector peoples hands to spend into the economy. There is no other way to way to balaunce this economy. Handing 600.00 bucks to everybody is weak. And causes more deficets. We need to lower the tax burden $600.00. Via income tax,gas tax,permit fees,property tax. there is more tax than I care to write. Every government agencys union has ran off in there own direction creating there own way of taxing, they call permits, fees, licens,registration,another huge list.It is all tax.(Permits to build a house cost more than the house cost to purchase 20 years ago). And it picks appart the american,tax payer so they have a hard time saving at all. And creats false economies. LEVEL THE PLAYING FIELD.It is a must. Or we can all work for the government just like China,Cuba,Solviet union. And stop letting people over run the boarders, Whos team is whos. Should I send my sales tax to mexico? Can they do a better job with it? Do we need to expand ower borders? Apparently everybody wants to become american and charge tax payers here for it. It is going to be very interesting adjusting america to Nafta and Gat.
This is the way I see it. Middle class America is in a reccesion, and we have been since 2003 or 04. However because of all the welfare programs alloted for corporstions, their heads have stayed above water. But when the corporations and financial institutions ring the alarm for a recession. Americans who are in the bracket of (25,000 – 200,000) will see a depression in 2009.
What does this mean
1. Fewer Jobs
2. More Burgalaries
3. More Divorces
4. More Murders
5. More force retirements
TortFeezer,
You are right. The world is all wrong. Maybe we should all give up. I am sorry to hear that you’ve had a hard time. However, you do seem to have enough time and money to post commentary on your personal computer. Go to Africa, Asia, or South America and you’ll learn what real hardship is… your computer costs more than most people in this world make in three years. Your bitterness is understandable… you’re losing the big game of dodgeball that we adults refer to as life… or at least you think you’re losing. Rather than blaming others, however, perhaps you should look within yourself with a glimpse of optimism and begin to figure out how you can improve your standing in the economy since it bugs you so much. Start by assessing your current career. Could you be making more money elsewhere? Then do it. Your company would let you go in an instance if it made financial sense to do so… so don’t extend them any more loyalty than they would you. Can’t make any more than you are in your field? OK, this one is a little harder. Here comes the brutal truth… you either need to change professions or further reduce your standard of living. No one is doing anything to you. If you don’t like how corporations and wealthy people operate, then don’t work for them. Go out on your own and build your own business. Perhaps creating your own niche in the economy as an entrepreneur will be much more fulfilling and profitable…. and PERHAPS you will gain an appreciation for just how hard it is to be responsible for the success of a business as opposed to the “stress” of being a clock-punching drone. Whatever you choose is your decision. Whatever you decide to do with your life, if you’re feeling bitter you should take your frustrations out on yourself because unless you’re disabled YOU are to thank for your success and YOU are to blame for your failures. How does my strong message of personal accountability make me a fascist, exactly? I’m missing your point completely here, dude.
Anyone who clicks on to this site should read Stephen Powers’s comments within this “Talkback” forum. He’s showing some COMMON SENSE which is what most of us need right now. GET OUT OF DEBT as quickly as you can because if our personal “economy” gets worse (that is, our personal finances, job situation, etc.) our personal debt will hold us back from improving our individual financial situation. In my mind, ANY DEBT IS BAD DEBT!!
Funnny how Mr Powers keeps talking about failed socialism.
Last time I checked- and worked there, Germany, Spain, France, Sweden, SWITZERLAND, Japan, Denmark, the NEtherlands….ah the list goes on…were all ’socialized’ countries. They are all still there, and in many cases, they are kicking our backsides.
Why even Communist CHina is kcikcing our backsides right now.
Hummm…..
Perhaps thats becusae Mr Powers has confused Socialism with communism of the Soviet style,. and thinks that Fascism is the same as the ‘free-market.’
I know, noth words start with an F, and its confusing, ut theya re very different kettles of fish.
Fascism, as we well know form the 20th century, has been as much a failure as ‘communism.’
Which is why the US is failing today. We are fascists, led there by the GOP.
I think there will be a recession, not because of the housing bubble pop so much, but because of what the housing bubble funny money was covering up. America has lost most of its real jobs, people who would have been machinists and factory workers are now stuck at minimum wage asking “would you like fries with that?”. A country can’t survive by having all its citizens sell foreign made goods to each other. Its time for a bit of “protectionism” before we lose not only the jobs, but the knowledge and experience behind making anything useful. When this generation of engineers, machinists, and the like are retired or laid off, who is going to teach the next generation? The knowledge will simply be lost if we continue on this path of a service economy supported by bubble generated funny money.
Stephen Powers:
Fiscal responsibility and long term planning is what provides jobs for the middle class. Grasping at short terms windfalls without reinvesting it in the company and its resources is neither fiscally responsible, nor long term planning.
A skilled workforce is a valuable resource, not just the CEO. If a company sees returns it needs to use those to develop its workforce, not chisle it down.
An investor is a valuable resource. Why should they not share in the returns as the CEO does?
Eventually, you get where we are today: The workforce no longer has any money to spend on the products the company makes, and the foregn workforce never made enough to purchase the products the company makes.
A century ago, Henry Ford was laughed at for starting the 5$/day wage. Other car makers said he would go out of business, and laughed at him. They were also angry becuase they were afraid they might have to do the same.
Ford’s response? ” I pay them that much so they can afford to buy my cars.”
Ford didn;t go out of business, it exploded with a better workforce and more efficient production. Many of those copmpanies who laughed at him are long since gone.
It is a valuable lesson you need to understand about the bottom line.
China doesn;t buy the crapo we make becuase it can’t afford to. But after only watching the bottom line and passing what returns to the top, neither can the American worker.
So here we are. At the raggedy end. And people like you won’t understand it until the bailiff comes for you that Henry Ford was right.
The bottom line is not about just today, but the next 25 years, if you want to stay in business.
Its a pity you are so short sighted.
To Steve from Denver:
Just read your post below. It sounds like you got burned pretty bad by offshoring several years back. Since then you’ve decided to go out on your own and have met limited success (barely able to get by). Shouldn’t you consider two alternatives?:
(1) You have a lot of experience as, I assume, an IT developer…. find a niche, sell to it, and ensure that companies you pitch to understand the dangers of using lower cost, unreliable vendors. If you do this and can’t seem to get through to them then I’d recommend #2….
(2) Go back to work in corporate America. Many companies have discovered that offshoring was not all it was cracked up to be and have restaffed their IT departments. And they’re paying premium wages once again. I understand you have a moral standing on this issue, but what level of personal/family sacrifice are you really willing to endure simply to make a point and protest?? OK, don’t go back to your previous employer… you can still “show them”. But jump back in with another company and pull you and your family out of your current hardship. This one really is in your hands. You are no longer a victim. It sounds to me like you are choosing to be a victim and are now sulking in self-inflicted sorrow.
Where have basic human survival instincts gone? Superman is not going to swoop down out of the sky and save the day. Let’s be the strong men and women that our parents and grandparents were and stop with the unnecessary whining and complaining. It feels like we’ve become a nation of toddlers. If individuals do not snap out of this mentality our economy and society will indeed fall… and it will not be Wall Street’s, the banks’, or the evil rich’s fault. It will simply be our own.
I am actually banking on 2009 being bad. We have entered into a lease which takes us to summer 2010 in hopes that the economy is more stable and thus a safer time to buy. Hopefully by then housing will have stabilized and the the higher rates that I am anticipating will have come back down a bit. We made these decisions back in December. We’ll see how well my crystal ball works.
There are no real reasons to be optimistic about the economy in the near term. The historical pattern to overcome our obstacles and weather the storm is p art of the American way. In other words, “This too shall pass.” Yes we have been let down by our government for falling asleep at the wheel. How could so much run away speculation in the sub prime arena been allowed to flourish; only to make a select few wealthy and expect the greater majority to pick up the tab? As has been proved again and again “There is no free lunch.” As a country many will bare the painful burden that economic hard times brings. Our unmatched spirit as a nation and our inbred desire to be the best country on earth will help us get out of this mess. As usual the poor schnuck stuck in the shrinking middle class will be hurt the most.
Imagine when the war in Iraq ends and the billions stop being spent on the war machine. All the jobs that the exist to support the war effort will disappear. Add a few million more to the uneployed and see what happens then. Not even the democrats want to tackle this one. Perrhaps the Republicans can start another war to save the economy????
Well I live here in Northern Maine, Aroostook County to be exact. Gas prices in a week and and a half have gone up 26cents and as of 20 minutes ago are currently $3.299 a gallon. We here in Maine and I am not singling out Maine for I know there are other real rural States, but here we have no public transportation thus we are forced to pay the high prices for fuel for our vehicles to travel to and from work, I have a small farm and we need tractors and a Toyota pickup will not haul loads of critters or feed. But, everything is hinged on the price of OIL,GAS for everything here is shipped by truck. Clothing, Food, Gas, Heating Oil, have all risen and is very expensive. School cost have risen, property taxes have risen all because of the increased costs involved with the price of oil. Even firewood for those who are tring to cut back on heating oil has gone up terribly, I myself opted to burn coal this year and even that has gone up in costs. With an income in the low 30’s and I am having problems what about the elderly on fixed incomes. This has got to stop and our politicians have to act on this. Maybe we need to clean out the old politicians in DC and but new blood and someone who has not lost touch with reality. Like know the cost of gas at the pumps, how much it costs for groceries a week. Maybe they need to shop at Walmart or Kmart for a change. I am just fed up. Everytime the wind blows in a different direction the price of oil goes up. Our government over the years has gotten us to use OIL more and know we are stuck. Maine is pro green but offers no incentive to its populas to help them go to renewable resources. If I could afford to move I sure would. We the people of this Country need to get together and start boycotting these oil company’s. They need to feel how we feel. Enough is enough.
Mr. Newhall,
Excerpt from your posting: “…the collapse of America is inevitable as long as the bottom line is the only king and our current crop of corporate management is in power to perpetuate it.”
Isn’t the bottom line exactly what creates jobs for the middle class? No bottom line = reduction in workforce. You essentially have adopted a view that was a key pillar to the failed experiment called Socialism. Fueled by class warfare mentality, all attempts in history to redistribute wealth have resulted in devastation. The ideal is that you’d end up with a society of equally prosperous people… but the reality is that you end up with a society of equally poor people. Free markets work because they align well with human nature. We are all different and we are all competitive beings. Unfortunately, there are “winners” and “losers” in any competition… including the economy… but at least it is in our own hands. If you don’t like your current lot in the economy, you can make very prudent investments in yourself (i.e., financial sacrifice and investment in education) to better your position. I’ve done it and I know many, many people who have done it as well. You cannot beat mother nature. Like it or not, capitalism is by far the most successful economic system conceived to date. If you have any better ideas I’d be open to listening… but class warfare and Socialistic ideals? I think the hypotheses on those ideas have been proven wrong many times over already. We’re going to need to be far more creative and pragmatic than that!
Stephen Powers: Stop trying to tell fairytales. Maybe some people don;t get to invest in their pathetic little 401K becuase they are simply trying to SURVIVE. People like me have been doing exactly as you say and are falling further and further behind, and now will be punished for the stupidity of your commentary. I don;t own a 40k car. I bought a very small house that I could afford with a fixed mortgage, but due to the false housing boom, have seen my taxes triple, making the house almost unaffordable. Naturally, I can;t move somewhere cheaper, becuase it doesn;t exist, so I am trapped. Does my income go up? a tiny bit, but far below inflation.
How about you biute the bullet GOP shrill, and accept the problems are not the working people who have been denied decent jobs for the last 7 years, its a problem with the streak of fascism people like you support in the name of ‘business’.
Taxes are only for the little people.
News flash, 50% + of this nationa’s working population hasn;t been out of recession since 2000! Median wages have never returned to the real earnigns level of 2000.
What does that mean?
That means that the ONLY way 50% of this nation- or more- could buy more was through debt. Buying things we don’t even make, but things from CHina.
Just WHAT DID ANYONE EXPECT? When will people learn that handing AL the gains to the top of the tree does nothing but over inflate the stockmarket, and push everyone else down the ladder.
GOP stands for Greed Of Plutocrats not the free market. The GOP has handed the futures of all small investors and the middle class into the hands of a few CEO’s who have done nothing but take all the gains for themselves while running their companies into the ground. From Reagan onward, we have seen the GOP never brings real growth, it brings boom and bust cycles that never actually produce anything.
380,000 jobs a year in job creation in an economy our size is DEPLORABLE, and any economist knows that. The unemployment numbers are LIES and any economist knows that. If you work 8 hours you are considered ‘employed’. How can you buy food, much less a car off of 8 hours of work a week?
The painful truth is that under Bush, the only people who saw an end to recession were the top .5%, and everyone else pretty much saw a decline in real income. It was even worse for those in the middle, much less the poor. They just used the interest rates as a way of hiding their dirty greedy games of offshoring and offshoring and robbing the treasury.
Harry Truman once said: If you want to live like a Republcian, bote Democrat. Bill Clinton sure proved that. A few tax increases in a few key areas, forcing companies to actually pay a few taxes, and then forcing the labour laws to be obeyed so we produce things in the US? Viola. Economy thunders off into the longest and most REAL growth in the last 40 years.
Something to keep in mind people: All those socialized countries like Switzerland and Sweden manage to have very wealthy societies and balanced budgets in spite of their policies. Maybe we should accept they are onto something.
I will never vote for a Republican again as long as I live, because I believe in a free market society, not in subsidizing the desires of a few greedy incompetent plutocrats.
Math says a 5.7% unemployment is 14 percent higher than a 5% unemployment rate. Multipy that times the number of working people in America!
1973-74 had a 43% drop in the stock market, just coming out of a war, oil prices and inflation was high, housing values were inflated and lots of housing starts fell apart. Weird. Of course, the only difference is that back then we had a lot of manufacturing jobs and we were a producer of real goods, not intangible financial services that are probably the next thing to get swept out of the country. I often wonder where all of this is going long term. Leasing cars, guess what happens when that 14% lose their jobs and can’t make car lease payments? Lots of used cars for sale, reducing the value of your car, slowing demand for cars, reducing jobs to make cars, just like houses now. Snowball effect.
Never has car leasing been so prevalent, people leasing so they could put more money into the stock market, maybe, well, what happens when stocks go south, now you have zero ownership of a car, and you are losing money on paper assets.
Common stock holders are the LAST people to be paid when a company gets into trouble. All other creditors come first…
I personally would rather have a paid off car I can use to get to a job than an endless lease good times and bad. The funny thing is that debt is fixed, while there are no guarantees in stock returns. We have enjoyed a long period of positive returns, but as they say, past returns are no guarantee of future results.
The greed and financial stratification by American corporations and American managers have caused the Great American Cash Cow to develop mad cow disease. The constant and consistent stealing from the American public to support absurd profit and bonus structures has weakened the knees of America to the point of collapse. If there was one word to describe the beginning middle and end of this story, it would be GREED. It still exists in spades to complete the collapse. It doesn’t matter whether it’s sooner or later, the collapse of America is inevitable as long as the bottom line is the only king and our current crop of corporate management is in power to perpetuate it. Congratulations Wal-Mart, Home Depot, Citibank, Bank of America, New York Stock Exchange, ad nauseum. You will succeed in bringing down what was the greatest nation on earth!
Mr. Harwick,
Great points on the money supply. Although my view of the future is not quite as gloomy as yours; I think people will eventually feel the pain as this imbalance unravels. I don’t think everyone will be considerably poorer, but the days of the “$40,000 millionaire” are coming to an end. Most people who are reading this string are trying to sort through whether or not things will get better or worse for them in the near future. If you’re living paycheck to paycheck you have a lot riding on this paramount question. My advice to you is as follows (by the way, this is my advice regardless of how well or poorly the economy is performing!!):
(1) Reign in your spending. If you are in the habit of spending every penny you can scrounge… or worse, spend everything you make plus run up your credit cards… stop it. Make rational cuts in your personal spending. If you make $40k per year and drive a $40k car, you’re doing something wrong. Live within your means. In fact, challenge yourself to live well beneath your means, if possible, and begin saving/investing for once. It won’t kill you… trust me. In fact, I think you’ll find it is far more gratifying to build wealth than to accumulate unnecessary consumer goods that you can’t afford.
(2) Bite the bullet and finally pay off your high-interest debt. Any credit dard balances, loans, etc where you are paying more than ~6% interest should be targeted.
(3) Take advantage of the falling dollar. Invest internationally and in mutual funds that take advantage of domestic inflation.
(4) Shred and throw away every invitation to open a new credit card account, home equity loan, or anything else that you could use as a vice to worsen your personal net worth position.
(5) Invest in your retirement. Put away in your 401(k), 403(b), IRA or whatever you qualify for. Otherwise, you’ll be whining even louder than you are now when you hit retirement age and have nothing to live on. It’s not the government’s obligation to take care of you when you’re old. This is not the Soviet Union. Your financial future is in your own hands, like it or not.
(6) Don’t panic. If you have money in the stock market, don’t pull out. You’ll just be selling at a low. You’re supposed to buy low and sell high… right? If you missed the “high” this time around, simply stay in (and add more if you can), reflect on how you missed this one, and be ready to sell the next time you’re in a good position. On the other hand, I’ll happily buy your bottom
This is not doomsday, so everyone relax. At worst this is a wake-up call for individuals and policymakers to stop talking about the need to address our issues and to start making some difficult and potentially unpopular decisions. I’m willing to go through some pain if it means that our children will inherit a healthier economy and country than we did. Just as we should do in our personal lives; we should expect and pressure our policymakers to make tough decisions now (sacrifices/investments) to provide the foundation for a more prosperous future.
To paraphrase Al Jolson in the 1927 film “The Jazz Singer” when he said “You ain’t heard nothing yet”…I can tell the American people, “You ain’t seen nothing yet” when the millions and millions of Boomers (I will be 62 in November) jump on Social Security at one time. It will bankrupt the enonomy. Just where is this money to come from? Not one politician is willing to discuss this issue because it is political suicide. Just wait: illegal immigrants, AIDS, MS13 gangs proliferating like wildfire, social security applications, public apathy, increased crime in big cities, the collapsing infrastructure of our larger metropolitan areas, many major bridges on the verge of collapsing, etc.—these problems are only just now beginning to show. It is estimated that in 35 years, whites will only be 47% of the USA with Hispanics doubling in number. Our once mighty Republic is doomed. We will become a banana republic by the middle of the century. Too bad, but it’s inevitable.
Comment to Andy in New Haven…. This writer did not become pessimistic, nor did the other ‘doomsayers’, out of caprice, because negativity is trendy. The dark opinions stem from hardship. My 2 cars have 150,000+ miles each and one has been out of service 3 months. Three jobs were lost between 2002-2005 after 28 years of continuous employment. Family member support and medical bills led to a Chapter 13 filing. Foreclosure is threatened on my primary residence. I never have had a vacation home, a boat, a hot car, Super Bowl tickets or similar luxury items.
Whoever you are, sir, people do not WANT there to be an economic collapse. But we’re only extrapolating forward from what we have seen, heard and experienced. Positive thinking might help with a diet or quitting smoking, but with this economy…?!? You can’t make bricks without straw.
I think it is going to be several years before the economy gets better. The housing market is going to get much worse, so worse in fact that the entire irresponsible economic way of live Americans have lived for the last 50 years is going to change. It is like the perfect storm, economically speaking! I think it will be closer to a near ECONOMIC DEPRESSION than a recession.
Darrin of Greensboro, you are 100% correct! Encouraging spending is a very short-term solution. Reagan’s “magic bullet” didn’t last 20 years, though. We’ve had several recessions tsince. The foolishness of encouraging people to spend money they don’t have is that the money must be borrowed. When you have a situation, as we have had in the US for four decades now – to wit wage stagnation – you set yourself up for some very long-term economic woes. Also, too large a chunk (70%) of our economy is now based in consumer spending. This is not sustainable.
As long as commodity money (the worthless stuff) is growing at ~15% y-o-y, inflation is not going away. Last time we were here was the 1970s = high inflation, low comparitive growth = stagflation. The Fed will have to make a choice soon – drain liquidity to stem inflation, or sustain liquidity (as we currently are) with the certainty of future inflation. Last week’s turmoil among the municipal yields was a barometer of what is coming – at some point, rates must rise to stem the impact of the money tsunami. Political and public pressures favor an ultimately foolish Keynesian response, but this will only further exacerbate savings and investment erosion as real returns continue to lag money supply growth. Most Americans are going to get considerably poorer one way or another, and there is nothing McCain, Hillary, or Obama can do about it – the money system is simply OUT OF CONTROL. As the sage Will Rogers said, invest in inflation – it will only go up 8^) Welcome to the Weimar Republic.
IF THE FEDS (BERNANKE) DOES NOT STOP
CUTTING THE INTEREST RATE AND THE PEOPLE WITH MONEY IN THEIR BANK ACCOUNT
NOT GETTING A GOOD INTEREST RATE RETURN
ON THE MONEY THEY HAVE IN THE BANK, THEN IT WILL BE TIME FOR THESE PEOPLE TO BEGIN TAKING THEIR MONEY OUT AND
JUST KEEP IT HIDDEN UNDER THEIR
MATTRESS!!! I THINK THE PANIC OF THE
1930 DEPRESSION IS BEGINNING TO HIT
SOME OF THESE PEOPLE AND THEY ARE
PULLING THEIR MONEY OUT OR NOT EVEN
SAVING THEM IN THE BANK. THE FEDS NEED
TO THINK ABOUT THIS ISSUE. SENIOR
CITIZENS DEPEND ON THEIR INTEREST RATES
EARNED ON THEIR SAVINGS. WE CAN NO LONGER DEPEND ON SOCIAL SECURITY INCOME!!! THANK YOU VERY MUCH!
To Alan in Santa Rosa, CA: this has nothing to do with who controls the White House or Congress. If only it were so easy. Low taxes and a positive business attitude isn’t going to help if the fundamentals are off. Here’s an analogy: it doesn’t matter how cautious or how wreckless the driver is when the wheels have already fallen off the car.
Mr. McNeely,
Please see my posting below. To answer your question re: service based economies… the life-cycle is as follows: tribal/hunter-gatherers –> communal trade –> industrialization (manufacturing) –> services. The wealth cycle follows the life cycle back down the chain. The wealthiest nations in a global economy are and always will be the “services economies”. They are the investors; not the producers. How do you think Switzerland and Luxemburg – tiny countries – have so much wealth? They did not achive it by producing automobiles and gadgets. They are investment centers that focus on providing capital in exchange for risk-adjusted returns on the manufacturing economies in which they invest and support via services. The reason the US has moved away from manufacturing is because we’ve begun to advance into the services economy. It has not been thrust upon us. It is simply where the money is. Why manufacture something here when you can do so a far greater cost in another country that is going through its industrial revolution just as we did in the 20th century? They manufacture products for us there, and we sell them at a higher margin within our economy and to other countries at superior profit margins. Have you ever read “Who Moved My Cheese”? If not, I highly recommend it. Basically, people who are whining about the loss of manufacturing jobs are simply not willing to recognize that “the cheese” can no longer be found in the manufacturing sector of the US economy. It’s moved to the services sector. Best regards.
Politicians caused this by taking the greedy banking lobbyists money to deregulate the banks. Period.
Inflation will make it worse. Much, much worse. Thanks Ben. You really thought you could continue 60 years of inflation without hurting the people? Oops, never mind. You KNEW, just like the rest of the politicians. As long as your one of the top 20% of wealth, who cares if there’s 80% poverty once you’re done, right?
The economy will worsen as it approaches 2009. One factor that contributes to this is the Tax Rebates. Lets face it, the rebates are not a large amount of money, most likely, people will not save it, they will probably buy small things or pay past due bills (as private debt is on the roof). Other factor that contributes to a slower economy is the unavailability to qualify for a home/mortgage loan. Most Americans who are willing to buy homes, therefore helping to improve the economy, are not able to due it do to bad credit and such. Hopefully, someone comes up with a smart policy to better the economy in the United States if not we will see bad things coming.
It depends on the election. If we get democrats running things there most certainly will be one. If our economy is already shaky them the increased taxes and negative business attitude will just drain the consumers pockets!
I’m not an economist, but I don’t understand how if supply remains the same and demand decreases due to consumer’s belt tightening, this results in inflation.
Its bad enough that wages haven’t kept pace with inflation for many years, resulting in excessive borrowing and credit card debt.
Due to NAFTA and other trade agreements, we are now forced to compete with 3rd world workers, and are informed that we should be content with our incomes, as we are lucky we have jobs at all.(by the way, here’s another credit card application)
I seriously question the wisdom of having an economy that has become increasingly service based. The opportunity to add value is much less in such an economy. I think by now our major manufacturing sector consists of military and aerospace, which, not surprisingly, requires us to maintain a constant state of war to keep things rolling.
I am the eternal optimist but I am not so obliviouus to what is going on around me. I know people are hurting with their debt load and losing jobs, but I also want to face facts and they are these. Five(5) percent unemployment nationwide is actually quite good considering where we have been in the past and as far as oil prices are concerned, give me a break!We spend more on bottled water , which I still can’t figure out and as far as the BIG oil companies making too much according to Hillary, please ask her if it is true that the federal government makes more off of a gallon of gasoline than the corporations do. Remember the government has its greedy hands in the process all the way to the pump. Talk about pointing the finger in the wrong direction! Hey Hillary, don’t piss on my leg and tell me its raining.
The economic outlook-turned class warfare rhetoric never ceases to amaze me. Quote from one of the posters in this string: “Our economy has been a war on the middle class for far to many years, we were pushed to take out loans, buy bigger houses, nicer cars, finance our childrens student loans, digging deeper, managable for a time.” Did someone put a gun to your head and make you abandon personal responsibility. Just because banks make loans cheaper and more readily available does not mean your family should automatically take advantage of it. It is YOUR fault if you bought a house you can’t afford, cars you can’t afford, never saved for your children’s college education or sabotage your own net worth by taking out home equity loans to be squandered on designer clothes, TVs, iPods and vacations you cannot afford. I grew up middle class and have clawed my way out of it just fine. It’s been a simple matter of making rational, responsible decisions in my life and maintaining an adult level of discipline. We have the richest poor people in the world living in this country. They are now screaming that they can’t pay down their home equity loans that they used to buy their plasma screens and 22″ rims because the middle class is getting screwed and their incomes are not rising quickly enough. Oh, grow up and take responsibility for your own failures.
On our economic outlook… I have two perspectives on this:
(1) Free market economies have their ups and downs. We have experienced a solid five years of (quietly) explosive growth. The market is correcting itself. Sure, the banks loosened credit policies too much and – given that lower and middle class people in our society always want to live well beyond their means so that they can look and feel rich – too many rats took the bait and drove a housing bubble that is now correcting itself. Naughty little boys and girls inevitably get pinched, right? Our short term economic issues are just that…. short term. A year or two from now we’ll be looking back and wiping sweat off our brows thinking “man, I’m glad that was a shallow slowdown/recession”.
(2) We have structural challenges built into our current economic environment that need to be addressed for the purposes of long term “superpower” survival. Americans need to understand that, in a global economy, WE are the services sector. So don’t raise your kids to be assembly line workers. Time to finally make some tough decisions and transform our educational system form the current “no dodgeball, don’t hurt my kids feelings, everyone has A.D.D. and needs medication” mantra back to a competitive, free market-based concepts that reward achievement and PUNISH complacency, laziness, excuse making, and failure. We need to address our reliance on oil. The manufacturing economies need that stuff now… not us. Don’t get mad at China or Exxon. As the services sector, the US needs to stop consuming China, Singapore and Malaysia’s oil Exxon is posting record profits not because they’re profiteering bastards… their profit margin %age is actually quite low, so there is no evidence of price gouging… they’re making money on volume due to an incredible amount of demand. We need to further open our markets to other countries and stop all of this isolsationist rhetoric. We are either going to lead the global economy or sit the game out and get left behind. Lastly, the Fed needs to focus on inflation, not recessionary fears. We’ll recover from a recession just fine, just like always. We need them to focus on keeping inflation in check to ensure the dollar doesn’t become worthless over the next couple decades. Oh… and the government needs to reduce taxes (stimulates the economy) for the upper middle class… not the rich, the poor, or the middle class…. the upper middle is the key to growth. To pay for the tax cuts, and more for that matter, we need to cut government spending drastically… I’m talking to a point where it hurts. Taxes and government spending beyond infrastructure, security, and a minimal amount of social services is the biggest gaping hole in our economy. We need our government to look and act like it presides over a free market economy… not some interest-led socialist agenda.
My two cents have been deposited. Good luck and best wishes to everyone this year and beyond.
My thoughts take the side of those who believe that the current administration has used and will continue to use foreign borrowing and domestic accounting tricks to prop up the economy. While they would prefer a Republican be elected President, they would, I bet acknowledge that a Democrat would be a convenient foil for the next election in 2112.
Somebody has to understand that we cannot have guns and butter at the same time. Hard choices must be made and our leaders seem determined not to make any meaningful choices.
I resent the current administration’s arrogant dishonesty. I do not believe that the economy will recover this year and that another year may pass before we see any progress.
I left the workforce in 2001 not by choice, but because the highly technical work that I did became obsolete in America, as my workmates and I were sold out to cheaper overseas labor. Nevermind the fact that I worked multiple jobs to pay living expenses and tuition while attending college part-time for 7 years to get my advanced degree. If any of you have been paying attention, you have learned that off-shore labor costs have soared in the aftermath, while quality of work has not improved. I am in business for myself now and will never return to the corporate world, for I have seen how they think and what we are worth to them. Now they would like to forget that they ever tried to off-shore, but the intelligent local workforce will not return to them after being cheated. Let them suffer.
But it is not easy for those of us who were displaced, I don’t make the kind of money that I used to even though costs for basic necessities like food and fuel have gone through the roof in the years since. I went to college and tried to play by the rules that were laid out for me because they led me to believe that I would have a great lifestyle and no financial problems. Now, my family has no entertainment budget at all, it takes everything we have just to get by from month to month. I work more hours for less money trying to stay ahead of the global competition, who of course operates under entirely different economies and can often deliver results for pennies on the dollar compared to what I can (although these economies are unstable and unsustainable and the quality of work is terrible, but corporate America doesn’t seem to care as long as it’s cheap).
So now we’re talking about worsening inflation and possibly a depression. I can tell you that despite my best efforts to keep my family afloat, it wouldn’t take much to push us over the edge into bankruptcy. Once our expenses begin to consistently exceed our income (it already does some months but so far credit covers the difference) I have a nest-egg of about $40,000.00 which is supposed to be the beginnings of my retirement, we can live off of that for some time but we will be left with absolutely nothing for the future.
And, in response to someone’s earlier post about everyone running out and buying new cars, our car is 12 years old. And, in response to the guy from Canada that chimed in, your economy is far better off than the US, you can’t really know what’s going on here. I have a Canadian friend and we had a long conversation just last night about wages and the price of various items where I live and where he lives, and believe me there is NO comparison. In fact, a move to Canada may be in my future, as it seems they value intelligent hard working middle class citizens far more than the US.
The Fed’s lowering of interest rates has not helped mortgage rates. Infact, lowering the fed funds rates has only devalued the dollar and sent oil prices soaring since most of the middle east is on the American dollar. It has helped GDP from falling into negative terroritory, for a time, based on the foreign exchange rate, boosting domestic exports and making equities more attractive to foreign dollars, but the American consumer is getting hurt.
What’s the solution? It starts with oil which is what drives the world’s economy. Until the US decides to regulate oil by asking OPEC to lower oil prices or face higher prices on grain and other food products, we’ll continue to get the short end of the stick. I wonder how the middle east population would like to try to eat oil? Probably not too tasty.
Recession is imminent until the government gets real about the problem and they need to realize that they cannot control mortgage rates through the fed funds rate. Devaluing the dollar to hold GDP through lower fed funds rate is an illustration in stupidity, at least for the working class American.
Kudos to Reality And Save.The economic anthem for the past 10 years has been.. I need it, I want it and I want it NOW. What in Heaven’s name ever happened to people saving to buy a smaller ticket item instead of plopping it on an already over extended credit card.
We have been in a speculative bubble
since 2001 caused by easy money. The housing market is only a tiny part of it. Huge amounts of leverage throughout the financial markets have caused debt to be priced far below it should have been if not for the seemingly endless supply of easy money. The day of reckoning will soon be upon us. Believe me when I say “the Fed is terrified!”. They know we are at the precipice of a major calamity that could equal or exceed the last great depression.
(Ever read about the roaring 20’s?)
Like then as now all financial manias end badly. The Fed and Bernanke are pushing on a string thinking even more easy money will solve this mess.
Very simple solution to the American economic issues.
In 2008, we resolve to:
Lower gas prices and keep the Exxons of the world’s profits from reaching 11 Billion dollars by placing cuts and instituting price freezes for fuel costs. There is no way to prepare a budget considering the ups and downs of the price of gas. I know that it is capitalism, but there needs to be some limitations placed on earnings of necessary items. If gas continues to go unchecked, then farmers and other necessary items could do the same thing
Second, we resolve to keep jobs and purchases inside the United States, thus keeping American money in America. So what if you can get the same service in India for five dollars an hour, keep OUR money in OUR country. Last time I checked, I do not see people from across the world flying over here and buying groceries to fuel our economy.
Third, we will lower taxes on the middle class by putting us all on the flat tax. Imagine that, being taxed on how much you make and not having the middle class carry the tax burden for the country. Remember, the middle class is the spending class, put the money in their pockets, and they will likely spend. Considering that consumer spending accounts for two thirds of the country’s economy, it would be wise of us to ensure that the spenders would have the disposable income needed to fuel the American economy.
Lastly, we will RAISE interest rates to encourage saving and discourage those that cannot afford to borrow from borrowing money just because interest rates are low. An influx of saving will help the banks with necessary capital for them to help fuel the economy.
If we do this, we can rebound quickly, do it not, and we will continue to ride the flow into recession and out of recession in a few years like 1991 and 2000.
We are already in a US recession. Just waiting for the world to catch up which it will in 2009. I think the economy will only start to improve towards late 2009.
History is about to repeat itself. The downside convergence of the Short-Term, Mid-Term and Long Term business cycles is 2009. Start reallocating portfolios into more safe havens now and Be Prepared for marvelous buying opportunities in the near future.
The economy is going to heat up in 2009. Let’s not forget, were talking about helicopter Ben Bernanke. Look at the fall in interest rates just since november of 2007. If that weren’t enough, this 1.65 billion dollar tax rebate is the equivilent of flying over the U.S. with a helicopter throwing out cash. Inflation will rear it’s blubbery jowls, but that is the least of the government’s worries. Don’t believe me? Just read a bit about how fractional reserve economies actually function.
We are only in the beginning of a very difficult downturn as the credit contraction continues. There will be no relief whatsoever from this slide until a new Bretton-Woods type agreement is reached with the main reserve currencies returning to a gold standard.
To continue on the present course is fruitless now as we all know the more paper money is created and the more easy credit is extended there will be no price stability and inflation will roar ahead.
The outright greed of the past 25 years of the world financiers is coming home to roost. For capitalism to truly function it requires real savings and real savings require a return above the inflation rate which we have not had for a long time. All the recent government figures have been illusionary. The real figure that told us something was awry – the explosion in M3 – the Fed ceased tracking last year. I recommend http://www.shadowstats.com to open your eyes.
This will be a painful time for many as the economy is now a service economy and this is the first recession the U.S. has entered as a service economy. Service jobs can contract much faster than manufacturing jobs as employers cut quickly as demand for services falls. I think the growth in unemployment will stun everyone. Service jobs will evaporate as disposable income and credit declines. There will be no manufacturing recovery to create jobs as most manufacturing that is labour intensive has been shipped abroad. It will take YEARS to recover the jobs lost this time around.
However, the U.S. is not totally down and out as they still hold one third of worldwide central bank gold reserves – so when they finally decide to return to a gold standard there will be something to back the new currency – (Unless the FED and Treasury has lied about the actual gold holdings).
A gold standard is the ONLY effective way for a democracy to prevent the politicians from destroying paper (now digital) money through inflation. Inflation is triggered by two things – money printed and easy credit. Believe it or not, the U.S. should have paid attention back in the late 1960’s when deGaulle started redeeming the dollars then for gold. Instead of going off the gold standard – perhaps historically a more grave error on the part of Nixon than even Watergate – the U.S. should have smartened up and put its affairs in order. De Gaulle was sending the dollars back for gold as he simply understood the inevitability of the inflation resulting from Viet Nam spending and global banks lending Eurodollars (not Euros) without any reserves. It has been a long slow almost 40 year slide since.
It was interesting listening to the Republican debates in Reagan’s Library. Ron Paul kept talking about saving the nation’s currency and no one picked up on it. I truly believe he is the only candidate who had a grasp and understanding of the main issue facing America today – the demise of the U.S. dollar as the world reserve currency. Everyone is in denial that this is happening. I’d say by 2012 the reality will have really set in when you cannot afford to buy gas and the economy is continuing to collapse. Eventually interest rates will soar because of market forces and drive the economy into a deep depression.
It is a terrible shame what has occurred to the U.S. It is a result of short term gratification instead of long term sound planning. Last week the senate hearings on steroid use by professional baseball players is a side-show when one considers the truly serious and grave issues facing America. Unfortunately, I see Obama raising expectations beyond the capacity to deliver and that may lead to civil instability as well if he is elected.
There is only one way to solve economic profligacy and that is to get back to old fashioned values – hard work and savings. That is what built the nation. It took politicians in the past 40 years to eradicate 200 years of net savings and sell the country into debt.
My friends (as McCain is fond of saying) we are in for the toughest time of our lives. As I write this gold has pushed to a new high today at $934. Save yourself and your family and buy some insurance in gold even at these prices. You can follow the price on your smartphones at this neat site
auprice.mobi
All great countries have foundered when their money was destroyed. Money is a fundamental trust in an exchange society. When that trust is sundered you may rest assured it will never be resurrected until the money is backed by something that cannot be counterfeited by politicians – whether they be kings, despots or democratically elected.
Without going to deep into all of this mess, it only stands to reason that there is an ebb and flow to the economy. We simply can’t see housing prices double and even triple every 3 to 5 year, nor can we allow wall street expectations in continual growth to be anything but insane. Yes food cost more every year, as does everything else including gas, oil, electricity and movie tickets. Welcome to “your” democracy, the american nightmare has been in full effect for 50 years. Cuba is next, so jump aboard and grab your piece while you can.
I definitely see a recession coming and I believe that most intelligent people would at least secretly agree.
I believe that there are factors that make a recession imminent: real wages will not rise however almost everything else will including gas, food, transportation, communication and clothing. In addition to the current manufacturing and construction recession which is already well underway the credit markets are not functioning so the finance industry will continue its free fall after that there will be another service industry to fall it looks to me like insurance could be next.
Unfortunately I don’t see the other side of the recession yet The US dollar is a disaster and interest rates are almost as low as they can go. I have heard that parts of our economy are healthy like health care after all we are currently spending 18% of GDP on that. I have also heard that the dollars slide will create export opportunities (It now looks like Europe is having their own troubles and I don’t see the Koreans and Chinese buying US products).
History says that the average recession lasts 18 months so I guess we could start there that puts the end well into 09 do I hear 2010?
Anyone out there want to retire? If we don’t right the ship soon that may be the great export opportunity that is provided the dollar stops its slide soon..
I am a builder that bailed out two years prior to the collapse. I hated watching this thing evolve knowing a collapse was inevitable. Big builders are in trouble beyond what the public can imagine. The banks are broke and are going to become bankrupt. Loan resets average around 20 billion a month for 2009 2010 2011. If you can’t cover a 14 billion write down, How can you cover three years of 20 billion a month…..prepare for the worst.. it’s coming.
The United States of America has historically enjoyed self-sufficiency in times of both war and peace but in order to better assess its present place in the world as concerns its military and economic strength, it is important to reflect on its foundation.
It is important to note, that as our forefathers were fighting for independence from England during the Revolutionary War, seldom do we hear about the underlying and overwhelming task they endured in order to supply an army without an industrial base. In order for success, the Colonies depended upon France and the Netherlands for everything from blankets and clothing to gunpowder, muskets, munitions, and food.
The Industrial Revolution of the 19th century secured the U.S.policy of self-sufficiency, transforming it into a global power. Due to the strength of its industrialization the U.S. was able to defeat its enemies in World War I. With the advent of the automobile, which Henry Ford learned to mass-produce, weaponry and machinery produced for World War II benefited from the automobile factory. Production of Sherman tanks, Army jeeps, airplanes and PT boats evolved from such civilian U.S. factories. And in the 1950?s the industrial base was modernized for the Korean War effort.
Wake Up America we are giving away our industrial base to foreign countries !!!!!!
This recession/depression will be known as the one caused by greed and lack of government regulations being enforced. Enron, Haliburton, outrageous oil profits and free trade have put us here. Who will bail us out? I have travelled worldwide for many years and I can tell you there are almost no countries with a middle class that do not also have trade unions. America became what it is/was by the buying power of its people when they had good wages. Where will the remaining businesses sell their services when the rest of the good paying jobs are gone?
People who are hurting are the ones that do not manage money well, say from middle class down. To help these people a work program makes the best sense. To help America, keep the money here, and develop a inferstructure rebuilding program. This will jump start the economy, stabalize the credit market, upstart the housing market and Wall Street will be happy again. Long term, cars need to be electric or get 75 miles to the gallon. Build solar power systems in the south, enough energy can be created by just this act to power all of America. Stop being political and save America!
As in 2000, 2001 with the Feds lowering interest rates in the hope of putting the brakes on inflation and staving off recession (where do we get these people?) while oil prices reach record levels, cost of living going inter-stellar, and mass layoffs at the largest manufacturers. Can we expect anything other than a recession? I’m worried about not being able to afford to commute and I make over $100k/year!
How is it that supposedly educated (most of them are supposedly very highly edcuated) people keep thinking that they can turn or stop the economy on a dime? How is it that these same people did not see the mortgage mess coming and what it would lead to? Are these people not ECONOMISTS? Was that not their chosen profession? I would expect a PHD in physics to have some expertise in the field of physics why would it not be the same for a PHD in Economics? How is it that they cannot (maybe will not) see the cause and effect?
And we keep listening to them. I guess we are the stupid ones.
It will get worse…MUCH worse…I believe we are headed for a great depression, not a recession. We should all be prepared. I believe our days of living in luxury are numbered.
We are in a cyclical economy and nothing more. People are freaking out for no reason. The economy is doing what it is supposed to do, go up and down, and then go up over the long run. I hope the economy goes into a recession, then I can afford some value-priced stock!
I say yes to most of the comments above and agree with them. Our government has been absent for us, and it is time to get a handle of things, like abuse of prices, no balance when paying workers, others getting extravagant pay checks, ignoring terrorism (before it got this bad), gas prices, mortgage abuse, interest, etc… Let’s keep helping those maintain their homes, helping the poor keep their jobs, keep things a bit more balanced, and keeping things at a regular pace. We have been going TOO FAST!!! We can’t even afford to go or see a sports game anymore it is too expensive, while we still get paid the same average of $$$!!
All the talk about staying positive and the market will go up and the economy will keep growing is true to a certain extent. However, we stayed postive in the late 90s and look where it got us… a stock bubble. I don’t think negative talk is necessarily doom and gloom unless it is used to intentionally scare people. If it is someone speaking the truth (or at least something they view as truth)then the that fact justifies the comment. What you are saying, if you say we need to stay positive is that we should ignore our gut feeling, keep quiet about our misgivings and just go along with the crowd. Is that really the attitude we want to foster? Conformity of ideas and opinions?
Ben and the Fed has been lowering interest rates and printing fiat money like a Banana Republic. THEY are the reason why we have high inflation. As for oil prices going higher is a no-brainer. In the 1970s we made an agreement with OPEC that all oil purchases around the world MUST use the american dollar (PetroDollar). As we increase the money supply we cause inflation. Common sense then will dictate that the rise in oil prices increases as our money supply increases. Econ 101 – supply and demand. Wake up people the FED is the cause.
I really feel the economy is being “bandaided” until after elections and then a drop off a cliff.
Although the Fed has tightened on credit while lowering interest rates to loosen money (yeah, that is really working), those with marginally good credit will begin to borrow on anticipation of the rates going up. This will then suck them into the mortgage and credit abyss after the first of the year.
What no one is admitting to is that we are an oil driven economy. If the price of oil goes up, then all related products will have to also ie: heating for homes, gasoline, and all consumer products that depend on transportation to bring them to us (in short, everything). Lowering interest rates only reduces the incomes of those who depend on fixed incomes to survive, allows more credit dept for the working population, and is delaying the inevidible.
The middle class is really beginning to cut their purchase of goods and services, as prices are too high. The haves and the have mores, or as Bush calls them, his base, is totally out of touch with the majority of the population!
If the middle class has to tighten its belts, then we are buying fewer consumer goods, so in effect, we are all effected. God help us in 2009!
What most people don’t realize is that this has been coming since the days of Greenspan. This whole mess started because of his inane interest rate cuts years back. This sparked this whole “bubble” and the insanity we are now seeing. What most Americans (and very economists) will admit is that the entire bubble that is now popping was built on borrowed money, money that people didn’t have or they perceived they MIGHT have.
It’s like going to Vegas on a home equity loan. You are sure you are going to win, or at least break even, but when the kitty is gone you now have to face the reality that you really have no way to pay the money back without a lot of pain, and that my friends is what has to happen now or this thing will NOT get better.
My hard-working grandfather who ran a dairy farm in the mountains of western NC and lived out the so called “roaring twenties” always said the following: “It took a great depression to straighten out the country after the excesses of the ’20’s”. They say history repeats itself….so go figure, only McCain may be the next Hoover and Obama may be the next Roosevelt.
1. Growth – 1.5-2.0%
2. Inflation 3.5% (Core)
3. Inflation – Energy and food – 3.5%
4. Total inflation ‘08 – ‘09 — 7.0%
5. Unemployment – 5.5-6.0%
6. Analysis – sluggish economy for 18
months to 2 years.
It’s amazing how out of touch our politicans and corperate America are.
Can I afford a vacation, NO. Can I afford luxurys, NO. Can I even afford to go out to a resteraunt for dinner now and then, NO. I drive a ‘94 Saturn with decent fuel mileage and keep my thermostat at 60 to help save on utilities. I drive to work and home, nowhere else to save on fuel. In my world the economy has not been good for the last few years.
The rise in fuel and energy prices have killed my budget. This means I won’t be putting money back into the economy because I don’t have any to put back in. And I know I am not the only person dealing with this just by talking to people at work.
The politicans don’t have a clue what the regular American is dealing with and until the do us regular people will get stuck footing the bill for everyone else.
Until coperate GREED (yes Exxon I mean you with 11+ billion in profits while you whine that you’re barely getting by) is fixed we will all suffer.
Here’s an idea. how about all the CEOs take a pay cut so they make what the average worker in their company makes. The politicans who are currently spending millions to get into office learn how to budget like we have to. Live in our world for awhile and then you’ll see why regular Americans are fed up.
The Great Emperor Bush II is looking for a “legacy” and here it is: The only ruler of the US to go down in history with 2 recessions in his rule, one for each term.
All this goes back to Reganomics where the Great Bonzo decided that it was OK to allow business to make huge profits, reduce taxes to create huge deficits, start outsourcing jobs, and squeeze the middle class dry!
All this gathered speed with the Great Emperor Bush I, and “Wild Bill” Clinton thanks to NAFTA (something a guy named Ross Pirot warned us about), and has reached the state we are in under the Great Emperor Bush II
Anyone looking for any relief from Bush II had better forget it, aside from the “rebate” check you will get after you have gone bankrupt, lost your house, and will have to pay the IRS taxes on. It is going to be up to a Democrat in the White House to try and fix this mess, if it can be fixed!
SIG HEIL, BUSH!!!!
sig heil, McCain????
Much worse than just a “recession”. As a country, we have negative savings rates, lower wages than the 70’s, a despicable health care system, a overinflated gigantic housing bubble, a silly stupid credit bubble, everyone is over-debted, reported inflation is a lie as it has been well over 10% for years. The only direction we are headed is south, nothing much can be done, unless we want to be a socialist community of whining little britney spears fan childs. Welcome to earth, silly sheeple.
No the “recession” is not over! We are in an election year which means the economy will plod along in a “limbo” mode until the elections are over this coming November. Then, depending upon who wins the white house, it be over or just smply get worse.
Can it get much worse. We slash rates for borrowers without understanding that savers also get slashed. Seniors depend on interest earnings to supplement Social Security and Pension income and now that vehicle is withering away as well. Stocks continue to drop, mutual funds comprised of stocks also decline and with the fed lowering rates you can’t even hope for a reasonable return on your savings. Where do you put your money? How sad, that so many supposedly smart people in government and on Wall Street turned the country into an economic quagmire!!
Wow. Things must be getting bad in the U.S. for so many people from all over to write in with all the negitive views. If you live in Michigan you have been feeling the bad times for some time now. The rest of the country is just starting to feel it. The person who wrote in about all the debt the U.S. goverment is holding along with States not able to meet there budgets and credit card debt rising, home values falling has it right. You can’t help but think things are going from bad to worse. I see no light at the end of the tunnel. 2009 will be a bad year. Only time will fix this. Look at Japan. All this debt and excess will take years to work its way out. Banks will go under. Over 1,000 mortgage companys have gone under, Bank of America saved countrywide for now. And now it is stating to work it way in to the rest of the economy. Depression not recession. Dow 8,000 is very possable but the people it will really hurt are those that have no savings and those that do will loose it just to get by.
To address a few points below …
Bob from NJ – That may be the most idiotic thing I have ever heard. Suggesting a Republican would purposely screw up an economy to handcuff a Democrat, setting the stage for a Republican savior? Are you serious? If anything, it’s creating a Clinton-esque opportunity for the next Democrat that takes office. Remember the last time a Clinton took office following a Bush that bombed Iraq? He left with a 65% approval rating 8 years later. And the idea that ANY politician (especially a wealthy Republican) would purposely screw over our economy is ludicrous.
Jen from ID – Suggesting the stock market will continue to slide for “the next few years” is equally as ridiculous. Most Bullish experts suggest the Dow will hit 18,000 in 2011. The opportunity in large growth money from now til’ then is incredible.
Craig K from DE – I assure you that your FedX guy isn’t the best polling source for economic projection.
This is the part when America has to pay for having this administration. Did everyone think that war is cheap?
Rob, W.P.B. Florida said: “I say, drop those interest rates to the floor, how about 0% to discourage inflation, while oil soars to over $100 a barrel, say hello to inflation.”
0% interest ENCOURAGES inflation, not the other way around.
The price of oil is an EFFECT of inflation (and scarcity), NOT a CAUSE of it.
Inflation is merely an increase in the money supply… NOT an increase in prices. Price increases are just caused by it (after a certain delay).
Please, everyone, figure this out.
YOU just DONT get it. All technical and research is GOING OUT OF US. Actually even when it was in US it was all them INDIANS and other ASIANS doing it!! Now with the stupid immigration rules and the crazy outsourcing/offshoring, the most valuable aspect of US economy that was the RESEARCH has gone out. Who’s gonna pay $1,000 health insurance benefit for the sales clerk in K-Mart?? How’s the guy working in Mcdees gonna afford a car? IT IS A MUCH DEEPER PROBLEM. In another 50 years very few in US will have a car.
It’s going to get worse!!! Inflation is good for the Goverment becuase it lowers the value of their obligations in everything from treasuries to social security.
I think the nation is going to get educated on what the word stagflation means…
YOU CAN’T SPEND YOUR WAY OUT OF DEBT! What kind of idiots are in office?! They are promising all this money to everyone figuring ‘they’ll just print more’, ‘they’ll just borrow more’, or ‘they’ll just borrow from peter to pay paul’. Excuse me? That is inflation! IT’S UNSUSTAINABLE!
Reinstate the Glass-Segal Act of 1933 NOW, this deregulation of our banks is CAUSING this fiasco! We placed these restrictions on the banks for GOOD CAUSE after the Great Depression! Thanks Clinton and the Republican Congress to single-handedly and with bipartisanship destroy the United States of America with the Gramm-Leach Act of 1999!
When 2% of the population owns approximately 90% of the nations welath what did people expect to happen.
Middle and lower class persons are now working jobs with reduced wages, less beenfits, and no retirement plans outside of 401K plans and social security which the welathy refuse to pay into.
Until the welath of this nation get re-positioned down lower giving the average american a heluva bigger say in everything this country is heading down hill fast.
Healthcare is eating at an average of $200 – $1000 a month form the average famileis income. There would be no recession talk if every American family had $200 – $1000 a month more to spend.
What’s going ot happen to all these workers who have no pensionplans at there place of employement and are forced to only invest in the corporate 401k. What happens to those 401K plans when the market tanks and drags half the nation with it ???
Trickle down economics does not work, and will never work. Money at the top rarely makes it all the way to the bottom. Get the money down low and let it trickle up through the ranks. money at the bottom ALWAYS makes it to the top
Earn a dollar, spend ninety-nine cents–happy. Earn ninety-nine cents, spend a dollar–miserable. Live by that philosophy and neither recession nor inflation will destroy you.
A REPUBLICAN lesson… 1. You start with a 3 Trillion dollar surplus. 2. You give 3 Trillion away & spend another 4 Trillion on a WAR. 3. You give the upper class 1% the BIGGEST Tax Cut. 4. You find yourself BROKE & Torturing people all over the world. 5. You find out you have NO FRIENDS left & no respect anywhere no even HERE in the USA. 5. You leave office Mr. Bush & head back to TEXAS laughing your rearend off as to what you’ve done! BAD Beginning BAD Ending! Never vote for a guy that NEVER READS a newspaper!!!! He hasn’t got a CLUE what is going ON! I wish I lived anywhere but TEXAS!
Economists have been saying this was coming more than 2 years ago. I think that those of use who chose to beleve them will be able to ride out the recession.Those who believed the administration and it’s erroneous assessment of the economy are going to get hit the hardest. Unfortunately, that is the majority of Americans who chose to believe someone who has proved his deceptiveness and ignorance on many occasions instead of being realists. You can’t spend money and give tax breaks like this administration has (and I mean Democrat and Republican alike) and not have to suffer some kind of consequence. The solution is not to look for a quick fix but to get out by practcing patience, good money management, and having faith that in the end good will prevail.
Recession in 2009? So, we really aren’t having one now. Very interesting. I suppose someone will get the prediction right if the guesses keep going out to some future point in time.
It’s this sort of irresponsible, suggestive reporting that might actually cause a recession. Consumer spending fuels 2/3rds of this economy and it’s dictated by confidence. Bernanke and Paulsen (followed by Yellen) all suggested periods of growth and made it clear that a recession is unlikely with the current project pipeline. Yet idiots like this author, and countless others from the “broadcast murder and rape, not puppies and kittens because bad sells” ilk, have essentially become a significant part of the problem.
I think its time for our media to become a little more responsible with how they’re reporting the facts and official’s opinions, rather than creating subdomains called “Recession Watch 08′”, which is now apparently poised to become … “Recession Watch 09′”.
Consumer spending was up in January. Wal-Mart, the litmus stick for retail spending, released promising spending reports. The 6 largest lenders in the country have formed a task force of sorts, government backed, to help avoid imminent foreclosures. Economic stimulus packages are already in the works, with more to follow. With the entire premise being to remove the burden of the Fed to lower rates.
The tone and spin of this article is irresponsible and I hope this moron gets fired. But even if he doesn’t, eventually his bluster might actually cause a recession … and he’ll get laid off courtesy of corporate cutbacks brought about by a media induced recession.
Happy job hunting, Paul.
Great, another ignorant, attention getting headline by CNN continuing to rally the “resession” flag and supported by a couple of third-tier analysts who no one has ever year of. Meanwhile every reputable analyst, starting with, by the way, the FED CHAIRMAN himself, are all saying the same exact thing. Yes ‘08 is going to be a flat year but every indication is that the economy should start to recover later in the year, particularly once the “never should have been made in the first place loans” have been flushed out of the system. Hey CNN, how about you show a shred of professional integrity and starting reporting news and not your opinions (or worse yet, try to be economic forecasters.)
Our Government should not be rewarding people for making poor fiancial decisions. The banks should not have allowed people with bad credit to get a home with no income verification etc. Amazing how Bush says the economy (although moving slow) is doing well. I’m sure it is for rich people like him. If we have an official recession in 2009 (we’re in one now too), then the Republicans will blame it on the new administration if a Democrat wins. The stimulus package is a joke and only gets us into more debt.
where oh where has the recent “positive” GDP come from? During the trade deficit, which inadvertantly accelerated under the Clinton regime in 1997, there is little fundamentally that is promoting this growth. Except for the credit barter. It may get worse, maybe not.
But they gots to work on the fundamentals before it can. Please be aware people!! Don’t buy into smoke and mirrors (ie. overpriced real estate “values”). i believe that the economy for REAL people (95% that holds less than 5% of the U.S.’s wealth) have suffered a recession since 2003.
Let’s look at what’s really dragging the economy down, shall we? Trade deficit, outsourcing … and America’s lack of competativeness in the global market.
Without the use of credit we wouldn’t see inflation. The “great” economy was a credit blown opportunity for rich people to buy and sell houses to eachother to make America look like it has a GDP.
Housing went up throughout the country for nearly 10 years, the fastest appreciation cycle in our nations history, fueled by cheap money and Wall Street bankrolling loan products where nearly anyone with a pulse could buy a home. That game is over, and the mess will take more than a few quarters to be cleared. Unfortunately, while the U.S. slides into the inevitable recession, raw commodity prices will stay stubbornly high because of oversea’s demand. What’s that spell? Stagflation. Who is to blame? Let’s start with the Federal Reserve printing money day and night, lax lending regulators, corrupt rating agencies, and a surplus of American citizens who want something for nothing and who have zero qualms of walking away from their mortgage obligations. Going to be tough for at least two to three years.
As a US citizen I still have a hard time understanding why our government claims it is by the people, for the people, yet we have all this debt and the government seems to do nothing about it except raise our taxes.Our government seems to have it’s priorities way out of line. We live in the most free country in the world with the most opportunity and we are faced with talk of a recession??? Are you kidding me… Something is not right!! I can’t stand politics.
It appears that, in the large, 2008 will improve overall with bumps in the road as follows: major markets should improve up to mid March; followed by a second bullish phase from April 1 through mid-May; then another push up from mid June through most of September with a bearish move from the fourth week in September through the first week in October.
It’s too late to stop the high inflation. Have you gone to the grocery store lately? As they increase the money in circulation they must continue that percent increase and increase that much further to continue the rate of increase. It’s a snowball rolling down a hill, getting bigger and gaining velocity.
‘You can trade a pair of shoes for a condo.’ ‘Rooms full of money, the people sleep in the kitchen.’ ‘Burning money in the fire place because it produces more heat than the cost of the wood.’ ‘People ask for their check as soon as they order their food when dining out, because the price will be higher if they wait to finish eating.’
Welcome to inflation. The worst is by far yet to come.
I think the Republicans realized long ago they were not going to win the Presidential election in 2008. By accepting this fact, I beleive, they knowing let the ecomony get into this situation, leaving the Democrates to deal with the problems. Three years from now you will see a Republican “Savor” stepping up to fix the problems the “Democrates” got us into. You see, the Republicans are betting on us having a short memory and they are most likley right.
Wow, all these people that keep talking about how great it is really is stunning. Have you lost touch with your fellow man that much? The greed has tinged you to look at the me and not the we.
This is a difficult time for many and not because they are spending to much on a latte. Because those with only greed in their eye sold them a bill of goods on the housing market and the cheap oil that we woudl have to run our economy etc.
From what I see through the not so rose colored glasses is recessionary but not dramatic. It looks like it could get worse for some for sure in 09 too, but still not doom. Lessons to be learned are part of things. Let’s hope in the future less sheeples get sucked into the everything is great just keep spending nosense like drunken sailors. Think Washington wil lget the message. Doubt it.
The worse is just beginning(seconded by Paulson). NOD are increasing at an alarming rate. This is just the beginning of the housing mess for the banks and investors who invested in mortgage backed securities. Inflation will continue to increase as China moves away from the dollar. The vicous cycle has begun of people not making what they used to and unable to pay their mortgage or buy luxury items. Even the rich are being hurt by the fall in stock prices. They will continue their slide for the next few years. We got out at 13,800(DOW) and sold our home a year ago. Vanguard Inflation Protected Securities will be a great investment for the next few years.
Let’s take a poll. How many people have maxed out their credit cards, burned up their home equity lines of credit and whose incomes have not kept pace with inflation. These people will be spending most of their income on food, shelter, transportation and debt service for the forseable future. That doesn’t leave much for spending at mall ‘fluff and stuff’ stores. The point is that the consumer has neither his own money or can borrow other peoples money to fulfill his designated resposibility in our service economy; which as the mantra goes is ‘that consumer spending accounts for two-thirds of the american economy’ That leaves one third of our economic engine…whatevere that is….to support the entire American economy.
I can’t wait to see how that works out.
We will all be OK! Won’t we? Won’t we?
I can’t hear you
If you want to know how the economy is doing and where it is headed, do the following simple test. Ask you local UPS or FedEx driver if they have reduced routes because of small businesses going under. You will be surprised at how bad things are already. A recession hits the small businesses first.
How can the Exxon company post a PROFIT of 11.88 BILLION dollars and the government can’t lower the price of gas. Something is very wrong with that picture. Sure people can reduce the use of gas but there is no way to not rely on it. Most people work at least 30 miles from home, sorry can’t bicycle in today it’s raining. Until we fix this fiasco the economy will not turn around.
everywhere i go people are spending money, people are traveling more than ever. it’s alot of talk, nothing but gloom and doom. keep your money where it is and ride it out.
I see it a bit different then the “pure economic side”.. IF and it seems likely we have “REAL TECHNICAL” AKA negative numbers “recession” or “adjustment”..which means the lower economic 95% “Must make the sacrifices” as they always seem to do.. THE issue may be more of a political then economic, as the R’s get tossed.. some sort of “recession” fired up..and then it is harsh reality fixes. AKA “raise taxes, cut programs, less real jobs, etc.. Soooooo, the D’s will take hits for cleaning up the mess created by BOTH R/D’s now.. One then has to ask… would the pols do such a thing to this nation just for power-spin-votes-etc? Sure, they do such every day.. Economy or political, you call it..
I bet the idiot that is in office is trying to blame the past administration for what is now happening to the economy. Six months ago and the past few years he kept on mentioning that the economy was strong like he use to mention that he was going to smoke Osama out of his cave. Go figure!
We’re still seeing “there won’t be a recession if we just think happy thoughts!” posts? Maybe I should get my “Whip Inflation Now” buttons out of the attic and put them on E-Bay? Sounds like there’s a (small but enthusiastic) market for them.
Rest in peace, Jerry.
Everyone repeat after me:
“Inflation IS NOT an increase in prices, it is an increase in the total money in circulation”
Let’s get that clear… price increases LAG BEHIND inflation.
Core CPI (even complete CPI) is a fraud, with worse accounting than Arthur Andersen and Enron.
We’ve been sliding down a dangerous slope for a while, people are just now seeing that the cliff looms ahead.
The U.S. has no ability to cushion an economic blow. The majority of us are paper-pushers (services) in this economy. We don’t have a real productive base to fall back on for a recovery if everything really goes sour (we did back in the 1930’s).
Be sure that you are self-sufficient in every way possible.
Much worse in ‘09 & coming years unless we get a handle on this country’s long-term fiscal problems & stop giving the people incentives, such as the “economic stimulus plans ” to spend rather than save & invest
It seem’s that there is a huge gap between the rich and those of us who are actually working just to live in poverty. What many people earn in two weeks does not cover rent in the S.C. area. God bless America.
Can we look a little further out than 2008 and 2009, and a little further back, even to Glass-Steagall? Everytime this country allows banks out of their cages, bad credit decisions are made, and everyone pays – ironically least of all bankers. It happened in 1929, late 80s-early 90s (thanks for that Reaganites – yes, kneel to the great father of modern conservatism and fiscal flights of fancy – can you say FSLIC?) and now. When will we, once and for all, figure out the right level of banking regulation and enforcement thereof, and ensure banks make responsible credit decisions and policies? Regardless of how 2008 and 2009 turn-out, if we don’t learn from our hubris we will repeat ourselves in another cycle. “Greed trumps reason” is getting to be an old, and again unfortunate, headline in the US nee Global banking system, with the sub-head being “with full regulatory backing.”
Doom-sayers germinating a self-fulfilling prophesy.
Draw back the clouds and let the sun shine through.
We have a whole new economic dynamic now after NAFTA and can no longer directly compare our present “recession” to past ones. The rules have changed. Oil rules and those in the oil business have the upper hand. I am “hopefully” optimistic about our future but also a pragmatic realist.
Our priorities will get in order. The more expensive things get the more we will have to choose what we spend our money on. Hello to food, housing and getting to and from work with a car that is, oh my gosh, over 5 years old and we will have to purchase that car not lease it. We will look at our savings and our credit history. Goodbye to the luxuries-sports tickets, that means athletes will get paid less and owners will make less money, so contraction of professional teams. When a player makes $4M to sit on a bench for 30 days and a working person has to pay hundreds of dollars to see him do it, our priorities are all wrong. When our leaders say spend, spend, spend when they have millions of family money, they don’t care about us, the working people. I say, drop those interest rates to the floor, how about 0% to discourage inflation, while oil soars to over $100 a barrel, say hello to inflation. Where is the technology to get us off depending on oil? Gone, oil people run our country, they want their money and we are giving it to them. Concentrate on what is important, food, housing and get to and from work. Let the luxuries go out. Why to celebrities get paid so much money and we look up to them to help choose our leaders? They are people like us that happen to have gotten a good job. There is no reason a person should get paid $20M a movie, or $20M for playing a sport when a doctor gets paid under 5% of that and they do work that is by far more important to society. Or a teacher who gets paid .5% and under those numbers and they are teaching our children. And this no child left behind, please, when I went to school kids got left behind and they learned something, not to take a test but learned something that they could use to pass the test and they retained that knowledge. You studied hard not to be left behind. You wanted to be with your friends at the next grade.
All good economies have booms and recessions. All free market economies have ebbs and flows. Contrary to popular belief (especially Wall Street and the White House) it is NOT the job of the FED to prevent a recession. The FED can, and often does, limit either the length or severity of a recession, though. A recession will hit probably some time in the summer, but could be over by 2009.
Hasn’t anyone noticed that inflation is up just 4 months after the first rate cut? Rate cuts tend to do that, the immediate result being a drop in the value of the dollar resulting in the increase in inflation. Rate cuts are not cure-alls, nor are rate increases. The Federal Funds Rate is NOT the only tool in the tool box of the Fed, but they seem to have become overly dependent on it. What ever happended to the FOMC and open market changes?
On that note, with the advent of computers and the WWW and other technologies, why is the Fed still using archane tools to manage the largest and most complicated economy in the world? Private industry has had to adapt to this new digital world, but it seems our central bank can not. Where is the ingenuity? Aren’t these supposed to be the greatest economic minds in America?
I honestly don’t see an easy end to the path that we’re already to far along to be optomistic, I haven’t been since ‘06. Our economy has been a war on the middle class for far to many years, we were pushed to take out loans, buy bigger houses, nicer cars, finance our childrens student loans, digging deeper, managable for a time. All the while oil sky rocketed, health care increased and increased and increased to the point that if you’re sick, an HMO recommends a will. Now oil is reaching new highs, HC is still on a steady rise with no real control or ceiling, the average person in this country is now under the hammer and the current standings have made it very difficult to save them, BUT we’re working. As long as the middle class can stay at a national UPR of 5% we avoid a depression, but with states in the 6-7%, abandonded homes and more debt then ever before, the middle class is in a recession whiether or not anyone wants to admit.
It’ll have been 80 years; 4 generations since the last depression, we’re in a war of extravigant costs, areas crumbling under the failings of primary industry, people buying less, owing more; lossing more… Jobs are the 1 thing holding everything together at this point, but growth is slow and not improving and companies are hurting.
There may not be a large painfull recession in ‘08 that hits all areas and classes but that lack of decisive slowing, a reset of the system to clear out bad blood and money will almost guarantee a disaster, the numbers are primed for it. A new President may have a chance of stopping a now global depression, but that’s in the stars and in the prayers that the next won’t be as courrupt as the last and is willing to fight for the people, anything else and we’ll live events and happenings only dreamed of in the worst of nightmares.
I feel sorry for the Jerry Springer class of people, who have no idea what the economy is or how it works. They are going to be blindsided.
There is a depression coming to this country. We borrow $2,000,000,000 every single week from other countries, to sustain our way of life.
We are bankrupt. The party is ending and hard times are coming.
In 6 months, the Dow will be down 50% and real shortages will be happening. This is all caused by greed. Just plain ole corporate greed and selling out the working class to slaves in other countries.
The only smart thing to do with your money, if you have any, is to invest in precious metals.
Just a part of the cycle. It will happen again in the future. Markets and economy ups and down. Just prepare yourself w/savings and live at or below your means. Ten years from now we will be singing the same old blues.
the worst is yet to come. housing will continue it’s inexorable decline for another 3-4 years. in trhe meantime it will take it’s toll on the banks, which will in turn tighten further which will deepen the credit crisis which will keep people from expending which will increase unemployment and so on and so on.
It always seems that every time there is a recession, people start commenting on how
“well that’s it, party’s over, get ready for a permanent decline in the standard of living”
And then a new era of growth begins. Now in the 80’s it was largely a result of massive defense spending, but a lot of people made money on Wall St.
In the early 90’s the ‘party was over’ again, and then we had the internet explosion.
Now, again ‘the party is over’ but I think that we are on the edge of a new era of energy production. Real energy production – geothermal and chemosynthetic. There will be a huge energy boom soon (once the oil industry reps are out of the White House perhaps?).
Another poster is right – these reporters love to jump on the gloom and doom wagon as soon as possible and scare the heck out of regular people who do not understand the nuances of the market.
Ummm, last time I looked at Webster’s dictionary it said the definition of a recession was two quarters of negative GDP growth. So far we haven’t even had one month of negative GDP growth. We are in a period of slowed growth and that is all. Our GDP is growing at 1.8% instead of 3.0%. It happens. All of this talk about recession is making me sick. People need to be a little more optimistic.
I was a corporate warrior. Made $100k. chased the dream. Lost my job on a whim. Sold my house, lost 50K, 2 years ago at the beginnning of the housing slow down. Making 40K now. Can’t afford a house, credit cards rising. Can’t seem to get ahead. I’m single. Fuel, food, insurance, housing. All up. Income? Flat. Spending on discretionary items? Negative. Democrats want to increase spending and taxes. No thanks. Republicans want to continue to be buddy buddy with corporate America that treats people like cattle. No thanks. I’ve seen the greed. I’ve heard the liars. I think I’ll keep my wallet closed, pay off my debt and weather the storm. Recession? Yep. for the last two years and probably another 5. I’ll be ok. Have a growing job future, friends, family.
The sky is falling! The sky is falling! Whew, thanks for warning us CNN. If it wasn’t for you I don’t know where I would get all my doom and gloom for the day.
I like the way you found some guy at RiverSource who nobody has ever heard of and made his comments the heaadline.
Quote “If you talk recession it will happen. The best way to prevent a recession is to think positive. I not going to sell or buy a home, car or major item so there is not recession in my mind. If the gov keeps taxes down then we have money to spend. Again Just think positive and stop all this talk about recession”
Posted By Ben, Memphis Tennessee : February 20, 2008 11:49 am
Mr. Ben by not buying a new house or car you are single handed making us go into a recession. You should be out there adding to you debt in order that the rest of us can be paid.
I’ve never seen more of our citizens here (mostly retired) tighten up. A 2K version of the 1930s seems a certainty. Less familial dependence, more gardens, wind generators, barbwire, and ammo – the older among us seem to have a strong inkling as to what’s next and many have said ‘We won’t be spending our way out of THIS one’.
2008 will be slow but not recessionary,the economy will bottom out in the fall of 2008 and we will see an improvement from there.maybe banks and home builders have leared their lesson.and so will homeowners who depened on the inflated prices of their home.prices will get back to reality and more consumers will be able to afford things.inflation will be kept in check because everyone is in a wait and see mode.remember y2k computer systems
I agree with Reality, why is it that the people who have borrowed more than they can repay have to be bailed out by the people who are saving money & trying to take care of themselves. Everything is backwards, teach saving, not spending & Berneke, you need to quit reducing interest rates, the people who learned from the depression & saved money, now are being punished again by the low interest rates.
The coming “2008 Great Depression” will continue to worsen in 2009. The Fed and the “Wall St. Fatcats” have a total disconnect with what is happening in America. Unsound accounting practices, lax standards, lax rating, total lack of Gov’t oversight and outright lies and illegalities rule the day. It was only a month ago these guys were telling us oil at $100 would not impact inflation or the economy. What world do they live in? People need to be ready for the coming economic disaster. Remember cash is always king and “paper worth” means nothing. People can not go on believing things like house prices will keep going up while real wages are stagnant or dropping. Reality must be restored and we need to resume actually producing things here – something which we probably can not do since we sold the machines we used to make things. Why do you think there are so many Chinese-made 1950’s replicas out there? Wake up America. The day to live within a budget and means has arrived.
If you talk recession it will happen. The best way to prevent a recession is to think positive. I not going to sell or buy a home, car or major item so there is not recession in my mind. If the gov keeps taxes down then we have money to spend. Again Just think positive and stop all this talk about recession
Let’s see the Federal Government is bankrupt just look at the 9 Trillion Dollar debt. Local and State Governments are even more bankrupt just look at their combined 53 Trillion dollar debt. Who knows how much the American consumer is in debt for 98 trillion dollars (?).
What does this all add up to? A bankrupt America.
We use to just go and build freeways in Texas now they are building tollways a sure sign that we are bankrupt.
With hundreds of thousands of high paying jobs being lost in the banking service sector and those people switching to minimum wage burge flipping jobs from six figure incomes the service sector job growth i terms of livable wages is now history.
Welcome to globalization. Soon even the CEO’s who make $150 million a year by firing $50K a year American workers and hiring Chinese or Indian workers at 5 cents a hour will be out of a job as no one will be left to buy their product in America as globalized jobs in America only pay minimum wage and not a livable wage.
Of course the Republicans can say the increase in the minimum wage by a half dollars caused everyone to crater. Soon you will be working for 5 cents a day just like they work in China or India.
Have fun with your new global ready job.
I remember in college in 88 my Economics professor saying that you can spur the economy two ways. The easy way is to encourage the masses to spend, the prudent way is to encourage the masses to save and invest. The second being substantive and slow, the first being fast and built on sand. I remember that because we were coming out of the early 80’s when a GOOD mortgage rate was 13-15% and Reagan was pushing spending. It was a great quick fix that lasted close to 20 years, but here comes the wave, and there goes the sand.
We are sitting alright now due to our strict control of our income/outgo over these many years. Now retired, we hope the youth in this country take great care to learn these lessons and teach their kids life is not all fun and games.
I think CNN needs to stop posting all of these negative articles and err on the side of posting something positive. The markets are a finicky “science” at best and driven by people’s reaction to events. How those events are characterized can have an amzing effect on the markets.
Let’s try to focus on the positive and see how the markets respond.
This country/economy is great, gotta love it. Lets spend time and money on stupid issues, like if Roger Clemens did steroids instead of more pressing matters. Who cares if he did or didnt??? How about this one, NBA player Keith Van Horn, gets paid 4.3 million dollars to be part of the jason kidd trade, to come out of “retirement” to sit on the nets bench for 30 days. ARE YOU KIDDING ME!!!!!!! I bet pro athletes have no idea about the economy and a recession and falling home values and the price of gas………WHAT A MESS. LETS GET OUR PRIORITIES IN ORDER.
I think we are not just seeing a recession. We are looking at a permanent decline in the American standard of living.
Thanks to “free” trade, jobs formerly held by Americans are freely flowing out of America. Based on *what* will the American economy recover?… retail sales of imported goods?… and where are Americans supposed to earn money to buy those goods? Government jobs?
Yes, American dream will continue to live on, in some other country.
We have not seen anything yet! With the cost of fuel, and food going up the value of our money going down. Expect double didgit unemployment. and I mean double didgit worse than the eighties. Not even Obama can fix this
Just when the housing issue will appear to be stabilizing, the issue of credit card debt will suddenly hit the U.S. like a tsunami. Presently the banks are only making it worse by trying to shore up lost housing profits through arbitrarily raising interest rates on their card customers. Consequently, the next MAJOR (I predict staggering) blow to the U.S. economy is currently having the foundation put in place. However, this crisis will be worse because more people have credit cards than homes, and at least you have the home as collateral.
All I can say to the CEOs of the card-issuing banks: Repeat after me: “Yes, Senator . . . No, Senator . . . I don’t remember, Senator.” Practice, Practice, Practice.
fuel costs will be the culprit–it affects everything we produce//purchase–it will, if not contained, bring our economy to a crawl
This country has been divinely blessed but the party is coming to an end slowly but surely. Fasten your seatbelts
I just love reading forecasts from the experts at LB or UBS, etc about the bleak future the world is facing… the same muppets who just lost billions upon billions of dollars… they sure saw that coming!
The last recession (caused by a Fed bound and determined to put a Repug in the White House [does anyone but me remember the huge spike on rates in 1999?]) was met by a tax giveaway as the pResident paid off them that got him there. The lapdog Fed thus had to drop rates to historic lows to “rescue” the economy. But whatever goes around, comes around. It’s taken seven years, but the recession the Fed swept under the rug for G. Dumbya is finally coming due – and now it’s gonna be a doozy!
I hope the wealthy are happy with the “profits” they made, because between the weak dollar and the coming recession, they’ll be giving it all back, with interest!
I can’t help thinking it’s going to get much, much worse, and here’s why.
My house is worth a lot less than it was last year. That makes me feel poorer.
My 401K is down considerably from October of last year. That makes me feel poorer.
My food bills have gone up over 20% from last year, even though I’m a good comparison shopper. That money comes out of my discretionary income, which makes me spend less on other things.
My energy bills have gone way, way up over the past year. That money comes out of my discretionary income, which makes me spend less on other things.
My health insurance has increased 20%, etc. You get the picture…
MY INCOME IS NOT KEEPING UP with those numbers, and there is no way I believe my situation to be exceptional compared to the vast majority of Americans. So would someone please enlighten me, how can these facts mesh with an “improving economy” over the next year? The only folks I can see prospering in this environment are the rich who haven’t a clue how the rest of us live!
PS My last raise was 3%.
The market mandates a correction to the loose lending and inflated housing market of the past years. A recession depends on how we muddle through the correction. If we stop spending and live in fear, then yes, 2009 will be real tough. If we continued to spend, but with a balance of spending and saving, we will see slow growth. 2010 or 2011 can be the year we pull out and get back to normal growth, all depends on how the investors and banks work through the correction. This is based on what the banks have told of the CDO’s, if there are more than we are told, all bets are off. The correction could be brutal.
I stongly feel that 2009 will be a “watershed” year. The economy will bottom out and we’ll see things we have not seen since the Great Depression. I’m not talking food lines and sugar ration’s, but we are in for a tough year. As long as greed is king in corporate America, this cycle will continue. My family is better off than most, since we grow most of our own food and heat our home with wood we cut from our own land – but the city slickers will see their jowels quiver in the comin year.
Ya, we are in for a ride… Here comes populistic socialism !! And as long as we keep letting all these illegals in the country, i’m sure things will be even better.. SNeer Sneer
Joe C is correct: the government’s intentionally doctored CPI makes it look as though we are slowing down but still in positive growth territory. In fact, using historic (less manipulated) measurements we are at -2% growth with the prospects for worse before it gets better.
We have been intentionally misled for so long that very few mainstream media today understand this. Fortunately several think tank organizations have been undoing the fraud and giving us real numbers.
BTW, real CPI is now running at just under 12%, about 3x greater than the government’s published stat. This number seems to reflect reality at least for the things I buy. Everything’s going up…
As long as fuel oil remains as high as it is and does not come down,we’re going to stay in a recession,we can’t afford these trumped up prices for fuel that we must have.
People are only kidding themselves if they think this sub prime thing is going away soon. We are likely to see real bad times in the near future.
Come on Boys and Girls…just follow the yellow brick road! As long as WE keep printing $$ in the back room with nothing but promises to back it what do you expect? We’re going to have the “American Dream” anymore – thank you NAFTA and BIG BUSINESS.
BTW – Democracy in foreign countries is NOT a priority now. We’re in SERIOUS trouble.
Recession – smecession. Its just a word bandied about much too freely with way too little meaning. Economic times have been hard for working America for a while, they are getting harder, and they are going to continue to get harder. But, as David from NY suggested, relax. We have been fat and rich and spending huge amounts of borrowed money to waste food and energy at a breakneck pace and buy junk until we blew out the tires on the SUVs carrying it all. So we have to live within our means for a while. Its good for us. “Some people are so rich all the have is money.” (7 Dias) Lets get back to life and be thankful for the opportunity.
Oddly enough when you buy something and you get to make payments on a schedule those payments are expected. Why is it this comes off as a ‘blind-sided’ event? Where has transparency and ‘in depth’ reporting been? We consumers pay the bills.. always have, and probably always will. Too bad some just don’t realize that fact.
I think I will be the only optimistic person out here in the blogosphere. Yes, I think the economy will improve by the end of the year. Unemployment is still below 5% and even if it does climb up to 5% it will still be the envy of the world. Yes, inflation will still be a concern, but when the interest rates start to increase again (when the housing market rebounds which it will eventually have to do) then the dollar will get stronger and oil prices will decrease which will help keep inflation under control. So start the mean spirited remarks and the ‘oh, poor me!’ comments.
Do I think 2009 will be worse than 2008? In a word, yes. The fed and Wall Street are more detached from the daily realities and struggles of working class Americans than ever before. One example: a TV ad for a Disneyland vacation for only $1600. “We can afford that!” Chirps the 30-something parents. This 50-something writer, this month, could not contemplate a $160 vacation; I am not alone. There just is very little spare cash available to most ordinary folks through wages, credit, home equity, or savings. The extent of this phenomenon is, unfortunately, going to get much clearer over the next few months….
To borrow a phrase “You ain’t seen nothing yet” pretty much sums it up.
2008 will be bad and 2009 will be on par with the Great Depression.
While inflationary pressures have been building over the last few months, it is diffcicult to understand how domestic and global demand (excluding energy) will not moderate enough to keep inflation at an acceptable rate. Every headline touts a recession, which we may not even experience, and now stagflation. Is the media so inclined to ripple the shockwaves of America such that it overlooks corresponding effects which may be brought forth through current circumstances? One of the interesting dynamics, which seems to be overlooked, is the drop in the trade deficit for 2007 in spite of rising oil prices. Could it be that the weak dollar may actually bring more manufactuting/ productivity back to the U.S.? While the competitive landscape for finanical investment may be hindered in the U.S. by the weak dollar, can we not see a gain from the potential offset/ increase in our exports?
Aren’t the emporer’s new clothes beautiful?!?! What is it with you Wall Street types? Do you really think that by refusing to acknowledge a recession that it isn’t happening? There are clear-cut, irrefutable signs that we are already in a recession everywhere I look. The Fed screwing around with interest rates will only make matters worse. They need to increase interest rates and allow the markets to correct now. Many of us are going ot lose money; some of us will lose a lot. But you know what? We should lose money. We ignored the funamentals of business and economics, trying to make a fast buck. Now it’s time to pay the piper. It doesn’t get more simple than this.
America has been through tough times before and made it back to great times! We can do this! “Each one help one” and we will come out better in the end.
I think we should all kill ourselves right now. If growth scales back to 1.5% then this world will be so miserable that we would wish we died. The whole world will collapse and everyone will starve. It’s the end of the world. Everyone FREAK OUT!
Seriously though.. it’s just an economic downtown. Those of use who managed to make a few bucks during the upswing should be happy we did well then and those of us who didn’t will probably get an opportunity sometime between now and the next upswing. Relax, take it easy and enjoy that fact that a slight economic downtown is the worst of our worries.
Housing slump will still have effects on the economy with difficulty in getting leveraged loans, etc. What fed this boom is feeding it’s demise.
Why is it so surprising that the bill is finally coming due? Prolonged fudging of the cpi thru hedonic regression, removing of the trending of M3, and the need for politicians to remain on office has left a large bill on the doorstep of the American tax payer. Why doesn’t the media highlight what is really going on and be on the side of the American tax payer?
When our basketball, football and baseball teams are cut back and barely making a salary, when hollywood stars quit buying $10,000 dresses – THEN we are in a recession, yes there have been a lot of job losses, some panicking and selling way too soon, some made bad decisions hoping to float thru and can’t – it shocks me that business owners would fold up in a 6 month period of time – it takes that short of time or were they depending on stocks to get them thru the hard times. Most businesses hold out for a year, all businesses go thru a good season and a bad season, so we had some bad gas prices – that made the economy fold? january and february are rough months for all businesses and how none of them could not think that the economy will turn around in march (not drastically) but it will turn around and inch like an inch worm out of this mess we are in. Sometimes really intelligent people let the media run there emotions when simple common sense and good judgment is right there in front of our faces. Its so unappealing to see everyone giving up – its embarrassing – this is when the tough get going I’m just disappointed in all the hog wash the media feeds the people who don’t realize all the gamblers lost their money in 2008, it sucks but they can get thru it if they hold on thru 2009.