Many of these posts just go prove the serious lack of education on economic matters.
I am just starting to learn about economics, the business cycle, the role of consumer spending, inflation, GDP, etc.
The POINT is that at least I am trying to understand how things work rather than just pointing fingers.
I have discovered that economics can explain a lot about how the world works. WHY? Because the real world data (and believe it or not you can actually find data that does not come from the government. I know, I know, shocking, right?) backs up the general principle.
I see the connection between the principle and the facts. And my personality is such that I can’t ignore facts, even if those facts contradict what my heart tells me to think.
For those who have an open-mind that is willing to be challenged regardless of the initial emotional reaction AND who do not fear monsters under the bed, study economics. You will never look at the world in the same way again.
I certainly don’t and I no longer fear that the sky will fall.
“Unlike prior recessions, Corporate America may help to keep the economy afloat even if consumers pull back.”
- Funny, you should try stand-up comedy! I will def. come watch you in action.
Its most likely closer to May 1930, then it is May 1940. To jump to any conclusions that we will not “have” a depression, or possibly regional depressions is jumping way ahead of the cycle. Remember, the market rallied significantly following the 1929 crash from 245 to approx 290 by late spring. Then there was a two year crash like water torture that took the Dow down to 40 before bottoming. What we could be seeing now is the rally before the real decline begins.
In that time period, unemployment levels started to climb, and eventually reached 25% three years latter. Its reasonable to claim that we MAY be at the beginning of a recession since the damage done to the financial sector has not happened since 1930. We do not know the implications of the impact of the loss of capital on the future of our ecnomy. I would not rule out the possibility of a depression at this point in the cycle.
I predict it will get waaaaaaay worse. The reason is simple… Corporate greed and underhanded dealings will continue, the Energy industry has been given a greenlight to do as they please and they set this scenario up years ago. Dont tell me you think those guys are getting paid to stand around NOT thinking of profitable situations decades away.
The fact is that Energy costs are the reason we are in a recession. They have been steadily draining after-tax income from consumers since 2002. That drain has been up and down and has recently become an open dam. The Petroleum prices and deregulation of the Natural gas/electricity markets has been the underlying cause of every single other industry in America to have to increase their prices.
Everything costs more, foundries, transports, construction, infrastructure, agribusiness, retail products, etc. Thats youre ripple effect.
Consumers spent the last 6 yrs tapping Retirments, investments, savings, Home Equity and lastly credit cards to keep up their living with the thought that “gas cant cost this much forever, we’ve been trained to expect 1.25 /gallon gas for 20 yrs.”
Only in the past couple years have the Majority of consumers had to cut something out. Previously it was only the lowest income people having to cut things out, but no one cared then, now that the middle class and wealthy even are being stung, now people talk about it.
This will get worse. Way worse, because the Democrats wont be able to overcome thier spinelessness and pass formal legislation finally to regulate the energy industry. Even though they are a GOP and Bush controlled industry, the Dems will be forced into Obeying the Oil and gas billionaires and nothing will be done to fix the problem for the people, but instead it will continue to work well for the extremely wealthy few.
Paul, “A recession is when your neighbor is out of work – a depression is when YOU’RE out of work!” Remember that one? Ha!
Rather than quibble with “blame” or “definitions of what a recession is” we should pay attention to comments from the elders responding to your article. When they say “I’ve never seen a market like this in my 67 years” or market analysts suggesting a “perfect storm,” (to say nothing of billionaire Kerkorian’s financial advisor stating he is “scared for the first time”) – we may want to shake ourselves and pay closer attention. And now INFLATION raises it’s ugly head and no one is concerned? Only the pain caused by Volcker’s (correctly implemented)stranglehold on inflation was worse than today’s woes – and unfortunately that memory seems to have faded – maybe “you ain’t seen nothin’ yet!”
A question for you, Paul. If we’re NOT in a recession and (according to you)”comparisons to a Great Depression are misguided” – Is there a time in YOUR life that we have been closer to one?
John in Ellicott City,MD:
Among the amusing blogs I’ve read, yours stands out. Nobody drinks the equivalent of ten gallons of beer per week,and if you honestly believe that nobody consumes that much gasoline,either, then you must bike to work or carpool with co-workers conveniently living nearby. Unfortunately, my job requires the physical use of my vehicle,compensation for which does not seem to cover the cost of gas,much less anything else. Oh, yes: itemize deductions, except that my recompense will prohibit that–and it’s taxable,too!
James in Atlanta: good point. But the bigger crime is not so much not living within one’s means as it is the Government, with it’s dollar devaluation,and ever-increasing debt loads,and globalization,reducing the means by which one can live. Remember, when Bush advocated an “ownership society”, he meant that the newest way to make money was by leeching onto corporate profits via the capital markets. Where these profits will be increasingly derived in the future is no mystery:overseas, spelling very bad news for the American worker who does not earn a living as a Wall Street gunslinger. Is it any wonder that the best-positioned advocates of
what will become,essentially, forced economic socialism are politicians and the corporate executives who grease their palms?
P.S. Disclosure: As a faithful Republican,I voted twice for George, but the man has bastardized the party and what it used to represent.
Michael from Seattle is 100% correct with everything he said, except for one important thing… The government “bailing out” the consumer will help him as well.
It is a GREAT market for Michael to buy his first home in, but you want it to appreciate, right? You might want or need to move for a plethora of reasons after you buy it, and you don’t want to be stuck with the additional house payment if you can’t sell it, right? Everyone seems to think that “bailing out” consumers is a bad thing, probably because they don’t need to be bailed out themselves right now. But stop being selfish! We will all benefit from the government stepping and saving many people from the mistakes they made. Someday, Michael, it could be you. (I know, probably not, but you never know:-)
I saw a report last night that our government subsidizes the education of thousands of foreign students every year, meaning that our tax dollars pay for tuition and housing for people from various countries, such as Egypt. They come over, go to school for free. How can we complain about recession yet support politicians who enable millions of dollars to go to non-U.S. citizens? This probably doesn’t even scratch the surface of the waste we pay for. Just go to WalMart and watch what a lot of these “poor” people have in their shopping carts, then pull out WIC coupons to pay for expensive food, then spend hundreds on clothes, toys, electronics, etc. I’ve seen it with my own eyes. Makes me wonder how in the world they qualified for government subsidies.
CNN, the chicken little of the Internet. I am almost to the point of switching my news site. CNN has become the proverbial ambulance chasers of the news industry. They are irresponsibly feeding off of public fear like vultures, just to grab a headline and rake in some advertising revenue. I’m getting sick of it. If you can’t be balanced in your reporting of the economy, you are going to lose readers. At some point people are going to get burned out on the rampant negativity.
There’s a lot of misinformation being peddled by commenters here.
First, the definition of a recession is two consecutive quarters of negative real growth of GDP.
Second, higher prices and lower income is NOT a recession. That’s called inflation. Yes, there is a difference.
Third, “the war” is not the cause of the current economic struggle. In purely technical terms, GDP = Private Consumption + Government Expenditure + Capital Investment + (Exports – Imports). So guess what? If the government spends tons of money on a war, that actually is a BOON to GDP. We’ve seen it time and time again. War means more government spending, which typically breathes life into a stagnant economy.
In recession, interest rates drop to make money easier to borrow, so that consumers will have greater disposable income on hand, spend it, and thus help rebound the economy. The problem is that too many people borrowed more than they could really afford when times were good. They took out insanely large home loans, car loans and “keep-up-with-the-Jones” Loans without considering that during the good times, they need to be preparing for the bad. Because of the rampant irresponsible borrowing consumers did, they have no credit left with which to borrow, so the low interest rate doesn’t do anything except decrease the value of the dollar.
Let’s place the blame squarely where it belongs, irresponsible consumer borrowing. No one held a gun to anyone’s head, forcing them into that $750,000 three bedroom house, and no one forced them into a 3/1 adjustable-rate mortgage with no limit on the amount the rate can jump. Consumers did it to themselves (and now they want the government to bail them out!!).
We need to quit blaming the government for what they really have very little control over (our spending!) and start taking some responsbility. We made our bed, now we have to sleep in it.
On the up-side, with the currently low interest rates, and the high availability of foreclosures, it makes for a nice market for me to buy my first home…
Paul,
Maybe the media should try an experiment… For the next 6 months, tell the public that everything looks great, housing is recovering, stocks will rise, and consumer confidence is high (6 months seems fair since the media has been slamming everything for over a year). After that, let’s see what state the consumer, businesses, and the entire country is in. Does anyone disagree that we would be in a flourishing state of prosperity??? I respect you, Paul, because you are not as negative as most of the CNN writers (CI and LC for example), but I think you missed what the gentleman was saying about selling newspapers. Bottom line… Negative “scary” headlines sell papers. I don’t think that can really be debated, can it?
Defining a recession does not require negative GDP. It only requires a DOWNTURN in GDP for an extended period of time. Please do some research on this topic.
The state of the economy is currently propped up by a lot of false numbers. American’s are carrying around enormous amounts of credit card debt. This is essentially fake money that most of these people do not have. If someone had not loaned them money, we would have seen some of these “recession” signals a while ago. If housing hadn’t gone through the roof giving people new piles of credit to dig into, we would have seen these “recession” signal a while ago. Gasoline has shot up since February of this year at a faster pace than it had been increasing for the past few years. This is not because demand for the product itself as a fuel that people will consume today has increased dramatically — but because of the speculator demand has shot up since then and the interest rates in the U.S. have dropped.
I think we as a country have been on the wrong path for a while. I think we as citizens haven’t considered where the path we were being lead down with distorted policies, low voter turnouts, lack of community involvement and advertising coming out of our ears would take us. Even if there is a recession, I hope we all take this opportunity to reflect on the situation and think about how we can make out lives better, what we really need and how our government is holding us back and how they can help us achieve those things in the future. Without us and our labor, this country would be nothing. The government has forgotten this. Let’s remember this ourselves and remind them.
There will be a double dip. The stimulas checks will give a little bounce along with some inventory stocking for christmas. Then housing will continue to disapoint and drag down the economy in 2009.
Crushing back the price of gas and food would kick start the economy again and get things back to normal. It would be that simple.
Recession or not, I don’t know.
Fact is, that the credit crisis tears everything down. As long as this problem isn’t solved there won’t be a recovery!
I am sorry to remark that the US has one of the most unefficient banking systems as far as housing is concerned. The prime rate is 2% (down 3.25%) and mortgage rates have risen and are still about 6% – this means a difference of 4%!
In Switzerland this difference is about 0.75%, in Norway about 0.5%, in Germany about 1%. Thus we have mortgage rates in Switzerland between 3.25 and 3.5%.
Where does this money go?
Conclusion: only attractiv mortgage rates can stabilize the market!
My thought is the American citizen is being severely underestimated. Look at the facts on the oil situation. By paying attention to exactly who is getting hurt by the prices you get an interesting mental picture. Refineries losing profitability, Truck companies getting closer to losing money on deliveries, gas stations only making money on cash purchases (credit card charge takes up the gas station cut or more), consumers cutting back on usage. My question is how big the oil bubble get before refineries stop, trucks can’t deliver, and gas stations shut down their pumps? (I’ve seen one already). It wouldn’t matter then how much gas the consumer wants or needs. A scenario I’m nowhere near afraid of. If this is to happen how can oil hold its price? In the mean time I wonder if anybody knows about the advantages the fair tax could give us in this situation. Here’s an economic stimulus that lasts. All these complaints about illegals taking our jobs, not paying taxes. Drug dealers that still shop retail and eat fast food. We want to tax them but how? Indeed. Want an economic fix? Get educated on what is available and being overlooked by partisan bickering.
“We have nothing to fear but fear itself.” Yes, we are having rough spot in our economy, but this aint no depression. Grow up, get over it and move on.And most of all stop your damn complaining.
Our government has been getting better and better at lying to the American people since the Bush administration has taken office. It is obvious on “main street” that we have been in a recession for quit some time…more like the last twelve months…and our government tells us that they are not sure if there is even a recession. Well, the worst thing for our future is that the Bush administration has now created the acceptance of deception and it will go on…welcome to the fall of honesty and slowly America’s dominance…hopefully, this country will wake up and no longer accept the corruption and deception of the current leadership!
Please select the most correct answer:
We’re in a recession because:
a. Bush did/didn’t (fill in the blank with your liberal agenda here).
b. Small-brained people have been watching too much CNN.
c. All them illegals is stealin’ our $7/hr jobs.
d. I lost my job, which was over-paying me to take advantage of all them small-brained people.
e. Capital has been grossly mis-allocated since 9/11.
Gee… don’t need to use fancy words. We are in a depression. None of us needs any politician, newscaster, economist, etc. Just be prepared to take care of yourself. If you are lucky, you’ll get to be standing in a soup line. Get prepared for the worst, hope for the best. And… get out of the cities! Get your food stores in order, and invest in Ball Canning Jars, lids and rings, heirloom seeds, and several good books on how to get along in life without the joys of modernization.
i think w are in recession now,but not so long like many think.
US economic is heading north at the end of the year..
all of this happen becoz of WAR in Iraq,if we dont have this war..the money can use to help US economic
NB: NO WAR FOR THE NEW PRESIDENT
You know its bad when a mexican worker walks into a pawn shop to sell his tools that he uses to make money for his family. And after he leaves, I tell the guy, I want these brand new tools (not his) , but you have them at 130, how about I give you 80 and he says deal. Now as I’m paying, he’s telling me I can have 5 dvd’s for another 20. I pay $4.50 at blockbuster to rent so what the heck, they are used too…then as I’m paying for those cool dvds, he says go ahead an pick out another one and come back soon. We got great deals and its hard not to spend your entire pay check here. I think its far from over and I’m in Denver which has seen price hikes, but not the big layoffs nor the slow down in construction. But people are hurting here too. We got high priced gas, food, energy, and everyone is charging more for services. I think we get out in 2010. But that depends on what Iran and Syria decide to do.
Please keep spending as that is the only thing keeping the GDP positive! Everyone keeps saying, if you ignore the financials then the earnings are positive. How about we leave the financials in and ignore energy earnings. How’s that float your boat??? After you actually get off your lazy American rear and do some basic math, you’ll see we are already in a recession!
It would be a prudent journalistic intiative for CNN to look at how the gov’t statistics, that are constantly reported to the public, are questionably calculated…..not a pat on the back, big brother doesn’t allow us to report that fact look…I’m talking about an actual look with non-CNBC academic experts and financial analysts who tell the truth about the economy and not how it affects the price of their stocks or the popularity of their shows.
Items such as the birth/death model, evasive gov’t statistical business sampling that leaves out large portions of the core economy, and downright delusional seasonal adjustment models are totally burying the truly horrid condition of this economy. It’s time to call BS.
It’s damaging to the long term health of our economy and plain disingenuous behavior by Wall St. and the gov’t to keep this blizzard of false information coming through the media pipe….and I’m pretty damn tired of seeing the numbers come out knowing full well that they’re completely full of crap.
Reporting the news by perpetuating everyone’s agendized spin is just parrot journalism designed to keep the consumer calm…..listening to the spin, dissecting it, and then reporting the truth based on the real findings is carries much more integrity. I wish we could see more of that on this website but I’m sorry to say that we don’t. We see more of the perma -smile, all is well, keep spending and it will all be better soon, ridiculous mentality that will make this recession deeper and longer than it should’ve been.
Being positive and putting on a smiley face just for the sake of being positive does nothing to protect you from obvious over consumption, irresponsible fiscal management and a gov’t gone mad with printing money it does not have. It only puts the head of the average consumer deeper in the sand and creates exponentially more severe problems once people sober up from the smile-fest and realize that they could’ve taken steps to protect themselves properly.
Wake up folks, start asking the hard questions, and start acting on some answers before you all lose your shirts. Save some money, stop entertaining yourselves with shopping trips to Walmart, and start respecting the planet that has given you so much to work with.
One last comment…..anyone who doubts that a highly dangerous global warming trend exists and denies that we as humans are the primary reason is clearly unintelligent and out of touch with nature’s eco-system warning signs. Just because you’re a cranially snowed-in and misled republican doesn’t mean you can’t smell a whiff of common sense when it crosses your nose.
C’mon, humans are supposed to be smarter than that.
Thanks,
Ian
The term “recession” is in itself optimistic. The term “depression” is more accurate of what is coming. The term “third world” is what I predicted 3 years ago by adding up numerous factors. To me, the biggest factor is the loss of most our production and manufacturing jobs, thanks to NAFTA. These largely union jobs payed decent wages and offered the average American benefits that arent available at most blue collar employers today. These are the consumers that drive the economy that are now in debt to their eyebrows and have no savings left. Everyone is screaming about the war. What about Homeland Security that is costing us billions and does nothing but invade our privacy at a high pricetag, while our borders remain wide open, and the illegal immigrant population that drains our tax base rather than supports it is offered amnesty? What about the subsidy just passed for farmers who are already raking in huge profits from the green fuel push (ethanol) driving up the demand for food products, thereby driving up the price? Any time the government gets involved in anything it’s a disaster, yet the public demand for a nanny government to take care of us is at an all time high. And a democrat president will only make things worse, when we undertake social healthcare and spend billions of dollars more we dont have. Government spending has been grossly irresponsible, but so has consumer spending. And the consumers are running out of room on their credit cards. Without jobs, noone can buy anything, and a nation that is now a nation of consumers can no longer survive.
The economy will not turn around until everyone has had time to pay down some bills.(1 – 2 years) This will in turn free up some spending money. The other time frame would be how long it takes everyone to adjust their budgets to free up some spending money.
Yes the economy is growing very slowly but as much as everyone hates to admit it, it is growing. Those who say things like “worst ever” either have bad memories or are good lairs. Look back just 8 years to the end of the Clinton administration. His failed policies had us in much worse shape with out of control unemployment and that was a light case of true recession. Buffet is washed up when it comes to making money and his only hope is someone will still listen to him as he attempts to get his man elected with pipe dreams of death. Greenspan is one of the worst fed heads we have seen in years. Those who choose to listen to them are, in short, choosing bad advice. It no longer matters what the majority thinks or what those in the know tell us. The media will drum up anyone who has something negative to say about the economy and parade them across the screen every 5 minutes as the only ones who no anything about anything. Just look at how successful they were with the global warming hoax. It all went away with one year of data showing a total turnaround yet they still try to cling to it. No matter how much those in the media would like to see it we are not in recession yet and if people will stop jumping on the fear bandwagon we will not be. Ignore the fear mongers and realize that the only thing we have to fear is fear itself. The economy shows several signs of improving and in this area the housing slowdown has turned into a huge buildup. Things are looking up and some people are about to be left behind.
Because of his intense hatred of George W. Bush, Buffett is going to say we’re in a recession. Obama is his boy and Buffett is wanting a big enough downturn to propel his boy into the White House.
The real problem is no one saved, they didn’t live below their means, but above their pay checks and have for way to long, remember when most of the country households lived on one paycheck?
Gas is not going down much if at all. This country should have been supporting energy independence since at least the 70’s. We have become a greedy society that says we deserve more then 90% of the rest of the world. If we don’t learn this time forget it. We are just to stupid.
We are in a recession, prices up income down.
frankly, I think it is insulting to quote greenspan’s opinion, to describe the guy as “maestro” and “a financial legend” and then ask for people’s opinion whether we are in recession or not. what does greenspan really know? and may i remind you that he is one of the people responsible for the crisis that we are currently experiencing. but that is beside the point. to listen to his opinion makes absolutely no sense – “more than 50% chance of a recession but will be short and shallow”. how in the world does he know what the odds of a recession are and why on earth should we believe him that it will be short and shallow….i have never once heard a good argument for any of these points but i have mostly observed that such projections come from people like greenspan, bernanke, bush – all public figures who coincidentally have a significant vested interest (in relation to their “legacy”) that this recession is indeed short and shallow. the statement is also intellectually dishonest because in absence of arguments sounds a little like the “maestro” is hedging his bets – yes there will be a recession but it will be mild…in other words i don’t want to sound like the only idiot who didn’t predict a recession at this point in time, but if the recession didn’t occur well i told you it will be short and shallow sort of like there was no recession at all….
it is time to stop listening to these public “authorities”. greenspan, just like bernanke was likely a pawn in the hands of the white house responding to pressure to conduct highly inflationary monetary policy in order to salvage an ailing economy during an election year. i think the average American needs to understand that greenspan and bernanke are political and not public servants, whose actions represent short term fixes of our economic problems which are bound to cause more harm than any good in the future. if you don’t believe me check the price of gas and the euro/dollar exchange rate lately.
Now Mr. buffet’s statement is another story – that is someone who has managed to consistently beat the market for 40+ years during booms and recessions alike. His opinion (whether ultimately right or wrong) is of value to us not only because it comes from a man who might actually have some unique insight into the economy but also because possibly mr. buffet unlike mr. greenspan may actually be impartial to the short-term course (recession or not) that our economy would take. what i mean is that mr. buffet doesn’t need a soft landing for the economy in order to “re-affirm” his already quite respectable legacy. to the best of my knowledge his long term focus on value also makes his investment style relatively immune to short term fluctuations such as a severe and even long lasting recession. Plus unlike mr. greenspan he possibly made the statement not in search of the spotlight but in the pursuit of a concrete operative goal – to explain to his investors why expectations of 15% p.a. forward returns are no longer realistic.
I don’t know whether we are in recession or not but considering that the press seems to give forum to all sorts of people, I think we’ll know that we are about to recover when average Americans start listening to the buffets of the world and ignore the greenspans of the world (which will be evidenced when the name greenspan is no longer mentioned or at least doesn’t appear in the same article as the name buffer).
I am am an employee at IBM and I think that things are finally starting to trickle down to the semiconductor industry! With consumers cutting back on electronic items, autos and appliances the semicondutor plants are suffering. Semiconductor manufacturers make the chips that go in these items and if consumers do not spend then there production goes down. Also I think that semiconductor planys will start laying off people because they are just starting to be affected. If alot of semi fabs start laying off then unemployment rate will definitely be affected. I think that we are definitely in a recession and it is going to take awhile for us to pull out of it. Hopefully a democratic president will be better than our current leader?
There is most certainly too much doom and gloom in the news coverage, but the pain is real. The guys from Nashville have got a good handle on how things really are. One interesting note. Before I clicked on this article, I was reading the one about the tricks the credit card companies use to jack you up. It said that Americans are holding about $850 billion in credit card debt, or about $8,300 per household.
Now I thought I heard someone report that it costs us about $15 billion a month to keep our soldiers in Iraq. Since we have been there for over 5 years, that’s $800 billion we have wasted, not including Cheney’s cut. Can we please get our soldiers out of Iraq now, and maybe save a few lives in the process. Just a thought.
Nobody with any sense believes government statistics anymore. We’ve been in a national recession since sometime last fall. Michigan has been in a depression for 6-7 years.
If one were to choose just one person based on credibility alone, Warren Buffett would stand far taller than either Greenspan or Bernanke (both of whom speak only in vague lingo that is meaningless & incomprehensible to actual people). Their words are carefully-crafted to leave plenty of CYA. They and the other Fed Governors exist for the benefit of their interests (banks & Wall Street) and the federal government.
There exists no good in the present (economy?), brought to us by war, the military-industrial complex, oil speculators, crooked & stupid mortgage brokers, Wall Street (particularly commodities traders/brokers), and congressional idiots bent on spending borrowed money that the next 2-3 generations will have to pay back – IF the country doesn’t go bankrupt or fall victim to a worldwide economic war.
And all-the-while the SEC, the Federal Reserve, the President, the U.S. Treasury, and the party-in-power (whenever) apparently have no purpose (except to collect a big paycheck), since none of them is competent enough to even do their own jobs, let alone tell-it-like-it-is.
It will be years before this all settles down, if it can …
I saw a recession coming late last summer. I think part of the reason that we have such disagreement regarding how bad things are, and how bad they’re going to get is twofold: Not since the great depression have we had anything like the “mortgage meltdown,” and the second reason is we are in a global economy now. This is a situation that has extra factors in it that weren’t there during any recession after WWII. And I think it’s dumb to gauge a recession by the GDP number. I mean, really… How much of what we eat, use, wear, or “consume” is produced in the U.S? Practically none! Yes, we have auto manufacturers. But where do the parts come from? Overseas! Record gas prices, rapidly rising prices at the store, the most foreclosures I’ve seen in my 47 years, credit crunches.. C’mon. The econonmy is in bad shape and I agree with Buffett. Sure, it can be a “local” thing where some parts of the country are hit worse than others.. But don’t forget the domino effect. Everything is attached to everything in this country in one way or another. And the biggest concern I see is the longer it goes on, the worse it’s going to get.
Yeah, blame me… My wife and I are the typical Baby Boomers –
52 years old – both born October 1955. Dead in the middle of the Baby Boom..
And yes, I was hoping to kick back about now, but no way… now it’s on to 65 + .
Did I make $$$ on my house. Yes, it’s almost trippled in value since I bought in Kailua, Hawaii in 1997. I didn’t cause this. Lack of regulation in the World Banking System caused it.
( I put 25% down and took a 30 year mortgage — so don’t blame me!)
BUT- I LOST $100,000.00 on my condo in order to buy at the bottom of the market out here. So don’t tell me “I’ve had it handed to me” or how hard my parents had it. BULL!! –
OK, I did Vietnam and not a World War — and I don’t know “what it was like when you were growing up” — but my parents did very good for themselves and more power to them. I never asked for help ( they offered a little when they could ) — I’ve worked since I was 14years old –
But I earned every nickel that I have and I have the right to spend it anyway I want. My spending to excess the last 10 years??? Not everyone went out and bought a Expedition or Tahoe.
So you can blame the “baby boomers” if you want, but you’re WRONG!
JS in Kailua Hawaii –
I made a living for over 30 years by recognizing economic trends and consequences. I also have a degree in petroleum engineering and have worked in that field. I would like to express a couple of observations. When oil was $50.00 per barrel and US consumers were not pleased with the price of gasoline, the truth was that worldwide availability of oil was very close to the same as the worldwide demand. Since then, the demand has increased dramatically for many reasons, such as China and India enormous growth of demand, United States’s infactuation with gas guzzling vehicles, and several unbelievably stupid laws passed in the US to prohibit expansion of any reserves outside of the Arab nations. Combine that with the fact that the US became a country with one main economic stimulus — the consuming of products, and you have what we have today. Namely, a legislative body that does not have a clue nor a care as to what they are doing, major corporations led by individuals who only want a few years and several million dollars reward, public schools and universities turning out students who are barely literate and conmpetent,
a voter constituency who think 9-11 was just a bad break and will never happen again, a growing population of extremely low morals and decaying religious influences, and a nation with a lack of knowledge of history — the only thing we can learn from. All of these tendencies are evident in nearly all third world countries. How do you recognize a third world country? They are made up of devaluating curriences, no real tangible resources, uneducated citizens, and greedy politicians that answer only to those who keep them in power. If this sounds like the US is becoming a third rate country, you might wish to rethink your voting history. If you feel it is harsh and unrealistic, then continue to do as you have in the past. But I caution you– keeping your fingers crossed and hoping things will change for the good as they have so many times in the past, may not serve you very well.
Saying that the economy is recovering because a couple of indicators aren’t as bad as expected is like saying that a lazy and gluttonous man may start getting healthy because his weight and blood pressure aren’t as bad as expected this month. The habits that caused the problem haven’t changed, so why should the overall condition improve?
The economic problems are symptoms of deeper issues which are being largely ignored. The dollar is going to continue to inflate and if nothing is done (and nothing is even on the drawing board in Washington. This will continue until people and nations stop investing in the US dollar. Hyper inflation will eventually hit and who knows what happens then. I don’t know why most people seem to think we are immune from cause and effect.
Ever notice that as soon as Wall Street admits we’re in a recession, we start to come out of it?…
I blame this situation on the superstitious paranoids on Wall Street for not following their own advice of “buy low, sell high, long term investments are the way to increase your money.” The fools missed out on selling high, so they’ve been selling low for the past month. Why are they paid so much?
My husband has been unemployed since October, and we are knee-deep in debt. Don’t look to our household for a consumer boost; we won’t be spending lavishly for a couple of years, but we will be getting back into the black.
My money is on Buffet. It is really a matter of if we are in a recession or not, it is what is felt and perceived in each household that really matters. Fear has replaced optimism in most people I know, and fear, real or imagined, puts the skids almost immediately on any new undertakings that require real money, i.e., house appliances, cars, homes, etc.
The ” wait until things get better ” attitude sets in and alternative thinking is it’s offspring – ” make do until we have more money, a new job, etc.”
No, this “recession” is by no means over no matter how much whistling is being done by the Wall Street gurus as they walk through the economic graveyards of America.
Honestly, it’s all the fault of the baby boomers. They spoiled themselves and their kids, which kicked started a cycle of horrible money management and laziness that hasn’t stopped.
Unemployment is 5%. That is considered full employment. You can not have a recession with full employment.
Gas is only 3% of the average household budget. Gas prices doubling is not a budget buster. House values are down from 2005 levels. No homeowner likes that, but the truth is most of our houses are still worth far more than we paid for them. The media needs a recession for political reasons.
I beleive we are in a recession. I lost my job 2 months ago and just found a new one on http://www.realmatch.com…if anyone wants to try it. I think things will changes when Bush is out. Im counting the days
Overall I think the economy is in bad shape. Gas prices have gone up too rapidly, the dollar has lost too much of its value, interest rates are very low, and several sectors of our economy are experiencng real pain. It doesn’t matter what you call it — lot’s of folks are hurting, but much of it seems self inflicted.
$4.00 gas has cut my commute in half. I run my families business and normally my morning commute is over 1 hour. Now, under thirty minutes. I am definitely for higher gas if it means less people on the road. Plus, our business is still doing good.
what is happening right now is a workout of the crazy housing speculation that has been taking place for the last 5-10 years, the fact that there is so much fraud in the credit and financial system is highly prevelant and is still on-going as we speak. this won’t be worked out in all likelyhood before probably the 2013-2015 timeframe. it’s a natural economic cycle, as mr. buffet likes to say, “capitalism without failure, is like christianity without hell!” there has to be a downside eventually. as far as i’m concerned, stuff’s always gonna happen, and there ain’t much that one can do about it, other than look out for themselves and their families. besides, if one can still spend 15 bucks for a PB&J, all ain’t lost!
Thanks to the media the economy has declined. CNN, ABC, NBC, CBS, and PBS have hyped recession fears until these fears have driven the economy down to .6% growth. However, the democrats in congress have also driven the economy down with talk of tax increases and socialization of various parts of the economy. Congress could help by stopping the crooked check cashing stores, credit card companies and Banks from ripping off the general population. Every bank should be required to cash checks, even if the person doesn’t have an account. Also, there should be a limit on interest rates for loans, and contracts should be fixed for both parties (banks and credit card companies should not be allowed to change terms after the contract has been signed).
This is an unusual ecconomic situation. The US ecconomy grew slightly last quarter so it is not a recession, but there is ecconomic hardship.
The best way to look at is to look at sectors. Oil is in a boom. Food is in a boom. Consumption is down. Manufactuing is in recession. Housing is normal after a bubble burst.
What does this mean? States dependent on Agriculture and Oil (Glenn look at this) are growing. North Dakota and Montana benfiting the most but also Colorado, Wyoming, Kansas, Nebraska. Rustbelt states are hurting Michigan, Ohio.
This is only the beginning. Of course the Rich will get richer as now is the time to invest while the prices of products/real estate/investments are so low. But for the rest of us the middle class, working class, and the poor will have to absorb the damage and make harder sacrifices (school vs. work). Whereas, the baby boomers do want to retire but can’t afford health care costs. Our recent college grads cannot find a job that pays higher than $8hr. If and only IF there are jobs available. Even a new form of discrimination has arisen from this poor economy. If you have not served in the military, there is NO chance for a civilian college graduate to get a decent job at the state or federal level even if the applicant is qualified for the position. Remember to thank your company CEOs and congress for living in a fantasy world where people never get sick and work is so easy. Jobs are becoming harder and opportunity is slim to none (our own natural born american kids are not able to follow their dreams of being a doctor even with good grades because the Dean’s kids and immigrants get first shot. It is scary when you need surgery and the doctor does not speak any english and outrageous medical bills for non-existant services begin to pile up. Finally, for you baby boomers Social Sercurity won’t be around for long, how can you let illegal immigrants take your social security money that you have worked so hard for over 30yrs????????????????
We are in a recession, and it was absolutely necessary. Home prices were through the roof in much of the country, people had access to capital that they previously could only dream of and we were allowing folks to buy homes, cars and other expensive items on credit terms never heard of before in history. This is simply a return to normalism, and unfortunately, it hurts.
We’re in a recession. There’s no sense in even debating that point anymore. Anybody in the middle class knows the truth of that.
How long will it last? Who really knows? My guess is that the hard times we’re perceiving now are here to stay. We’ll never see gas under $3.50 again, and probably not under $4 for years to come, if ever. The cost of bread and milk will continue to rise, as well as the prices of produce and all other groceries. The days of selling your house for way more than you paid for it two years ago are going to be a distant memory, one from the “good old days.” And gone (hopefully this one forever) are the days where Americans frivolously spent more than they earned and treated credit cards like a second (or third) source of income. But is that one that really a bad thing?
If we could just do something about the soaring costs of healthcare, many of us would be able to stay afloat and still be comfortable, howbeit less loose with our cash (or, in most cases, credit). But add increasing premiums for lesser coverage (many times coverage that no longer allows for preventative care) higher deductibles, and soaring costs of prescription drugs (and I’m not talking drugs to take care of the side effects of the obesity epidemic…because, believe it or not, there are still plenty of us out there who aren’t gluttons and still have legitimate health problems), and that gouging $4 at the gas pump suddenly seems downright unbearable.
We’re not going to see any relief at the pump in the forseeable future. We’re not going to see any relief at the grocery store’s cash register. We’re certainly not going to be able to cash in on that elusive equity from our now-worth-less homes. And if things continue in this country the way they’ve been going, with insurance and pharmaceutical companies putting the dollar line before health and quality of life, then before long we’re going to have to assign a new definition to the term “middle class.”
If we don’t stop the shipping of our jobs to foreign countries and the greed of large compnies our nation is going to cease to exist. The other thing that is killing Americans chances to stay above water is all these illegal aliens working for poverty wages. This needs to be stopped and at can’t be too soon!
Of course we are in the beginning of a recession, unless of course you wish to follow the propaganda reports our government releases.
It is tough to decide if we are in a recession or not.
We can think in two ways. The first way is we are not in a recession. The rationale for the same is we do not see the economic indicators such as the GDP in negative numbers and nor do we see many people whom we know who are out of work. Compare the same with 2001, we knew bunch of people who were out of jobs. Also, I dont think people are cutting back on spending in any way.
The other way to think is we are in a recession. Look at the housing numbers, the prices keep coming down and houseowners do not seem to have a comfort feeling. I knew a close friend of mine who is planning to do a foreclosure if house prices do not stabilize soon.
And the two leading economists of our times, buffett and greenspan also have differing views. So I guess it could go either way, time can only tell us who is correct.
We are not technically in a recession by the standard definition but when everyone is deep in debt from the pass decade of cheap money loans we all bought into and there is no light at the end of the tunnel to say things will get better soon we feel like there is a recession. For some or should I say most of the typical working class they are in a personal recession because of inflation eating away at their spending power. Between the cost of energy not just gas, wait to you see this upcoming winter’s heating bill, and food who can says they have more money left over at the end of every week lately. We need to remember that population, food, and natural resource (oil) have been the cause of most wars in our recent past and if energy and it related inflationary effects on other items keeps rising be prepared to see a world turned upside down. I myself think we should exert some military pressure and illustrated that we will take back US assets ceased in the recent past as the major oil producing countries around the world have nationalized oil assets. A few well place nuclear devices and a naval fleet showing up to take back US assets that have been ceased will drop the world oil prices like you won’t believe. And for those who say we can’t do that stop and think what China or other countries will do when their backs are against the wall. Yes we will be hated but we are already hated by the rest of the world so let’s use our power to do something and scary the hell out of OPEC and the others oil producing countries. The greenies won’t like it but do we want to have a country we can pass on to our child or do we want to go out with a whimper freezing in the dark as the oil producing countries laugh at our stupidly to pay whatever they want.
Unlike the 70’s, this is an uncontrollable nightmare for most people. We’re in a global market and the Asians can drive the cost of oil up with our own markets closed. We aren’t in control of the world anymore. No one really knows where the cost of oil will end that’s just driving up everything else. After living through the last several recessions, I think that this one will last for a long time…..I don’t care how the government and wall street want to sugar coat it! I don’t think that the full effect won’t be felt until this coming winter when we get hit with the double whammy of what it’s going to cost to heat our homes as well as eat.
Well, this is how I see it, not listening to the media with all it’s hoopla and glory. Gas and food prices continue to rise. We have not seen a pay increase for the past three years, generally speaking. Home equity gone due to spiralling home values. To snag a decent paying job, an hour or more commute is what we are up against due to the lack of economic growth and businesses closing. We can’t sell and move to a more metropolized area for better jobs due to falling home prices and lack of people to qualify for mortgages. I know this first hand, I am in the real estate business or shall I say was in the business and recently lost my part time employment due to the “economy slowing”. I have the qualifications and education to land a great job, but after many,many applications, no takers. This has never happened before. We do not have large amounts of debt or an excessive mortgage or car payment. But every single dollar go’s into the gas tank,utilities,mortgage and food. There isn’t anything left for a “cushion”.
People are borrowing for neccesities and to make ends meet. This is were it’s at. Have we seen the brunt of the storm? I don’t think so. Economic Stimulus and Mortgage Subsidies are only a tiny,tiny band aid on a huge boo boo………..
does anybody really think gas will ever be $2 again! $4 now, $6 next year. i suppose the old adage that necessity is the mother of invention will ultimately save the day. but until that day comes everybody in america will just have to man up!
by most measures, we are in a recession. never mind what wall street or greenspan says, the real deal is on main street. food prices are too high, gas prices are too high and the value of homes have dropped too far. maybe we need this and in the long run, we will all be better off.
WAKE UP AMERICA THIS IS JUST THE TIP OF THE ICEBERG. THE HOUSE PRICES STILL
HAVE TO DROP.ALSO MANY STORES ARE CLOSEING. AND THE UNEMPLOYMENT RATE IS
GOING RISE.SAVE YOUR MONEY AND KEEP
YOUR POWDER DRY.
It’s gas prices. Get the price of gas at the pump down to the $2+ range and we’ll all be in better moods.
We are absolutely in a recession. I would have to agree that, while greedy mortgage brokers had shady lending practices, many Americans just spent too much- had to have the car and the huge house. Many people bought a house and should not have or just did not read about what they were getting themselves into. No one should buy without 20% down- you can’t in most oter countries and it is for a reason. So while gas prices have pinched us more, we need to step up and accept responsibility for or fiscally irresponsible and materialistic ways.
Generally a recession is a temporary dip in economic activity – usually a normal part of the business cycle that occurs when the economy gets overheated and needs to take a breather.
Somehow, this downturn feels different to me. The problems driving it are not simply cyclical but seem more permanent to me.
It just feels more like we are going through a fundamental shift in our economy. America seems to have lost its way in the world. New competition from the emerging economies in Asia, Latin America, and elsewhere a a real challenge American economic supremacy.
American brands (and their corporate parents) will still dominate the world – but the outlook for American workers will continue to decline. It won’t be a depression – but rather a gradual decline in our standard of living over many years – perhaps decades.
I agree with CNBC, “resession” depends on whether one is talking about in general or a particular family. I put about 6.5 to 7.2 gals of gas in by 19 year old 4X4 every THIRD weekend! I retired 3 weeks ago but was only driving a total 10 miles to/from work every week. I still have the money I got when I got out of the USAF in 1965! We’ve saved big time all our lives and when I was laid off, after 25.5 years, in 1994 we had an ELEVEN year buffer. Is the USA in a resession, probably so. Is it effecting my wife and I, no way, never will!
Personally I believe that Greenspan is smoking something he shouldn’t. The economy is not going to get better. That’s a misgiving that some economist seem to be having. Stocks going up a bit doesn’t mean the economy is going to get better. Gas and food are the best gauges of how the economy is. When a gallon of milk costs as much as a gallon of gas, that’s not good. Milk in South Texas is $3.99 a gallon and climbing. Food over all is up sharply like produce, meats, eggs, bacon and so forth. Get a T-Bone? Not when for one lousy T-Bone costs $14.36 I won’t. Even hamburger is up. For a 10 pound roll of hamburger sits at $17.99. I can feed my dogs cheaper with a 40 pound bag of Kibbles at $16.79 from Wal-Mart while a 10 pound loaf of mean costs me $17.99? Come on who is Greenspan trying to convince? Get real people, a recession is just the tip of the ice berg. Thanks George Bush for nothing. The Republican’s have hurt this country and the very fact that since Georgy took office the Middle Class is no more. Either you’re poor or rich. Which by the way the rich are staying that way by feeding off the rest of us. I’m an Independent who’s going Democrat this year. I’ve had enough.
The sixty percent that drives the economy (not business and government, but consumers)have less disposable income due to increased energy costs that in turn effect all the things we use daily. I believe we have another twelve months of pain and adjustment before things get better. The grassroot entrepreneurs are needed to pull us out of this….that’s where our American leadership is.
We’re in a recession, I agree w/ Buffet – it will be a while before things turn around. Nice to see numbers on consumer spending and housing starts but the truth is what you actually see on the street and hear from your neighbors, relatives and friends. In other words, spending habits will change – you’ll see more people in NYC for the weekend shopping, eating, strolling, instead of traveling abroad or somewhere else domestically (people will continue to spend money but it will be spent in other places and it will look like steady or, in some cases, better consumer buying). But again, the reality is in the street – we are reaching the height and end of the biggest consumer credit bubble, in addition to a ridiculous real estate market, where new, existing and FORECLOSED homes are all competing w/ each other. Recession, 24 months +, global (I should add), and don’t be fooled by false starts – the individual won’t be fooled by the same kind of nonsense and half truths (I should say all out lies) some political candidates are spewing. This is the real deal and we know it.
We are clearly in just the beginning of this RECESSION. Home prices are dropping, people & businesses can’t get money because of the credit crunch, and Commodity prices are soaring. This is the beginning of a long, painful process that will last a couple years.
It’s not a recession; it’s worse. It’s not a depression; it’s worse. It’s almost like a modern Dark Age. Every responsible institution is either corrupt or broke. Our brightest and best are seemingly all predators. The concentration of wealth is now a threat to national security. There is so little money in the hands of the masses that we simply cannot maintain our physical infrastructure, our schools, our public services. Things will not get better from “economic forces.” They will only get better when our leadership leads us all down the long path to badly needed social change. I am terribly pessimistic.
Only a fool will think that we are not in recession.
We waste too much food and purchase unnecssary house hold items.
We have to conserve.
Too much money is spent on Iraq.
Ashok,Linden, NJ
I live in florida;your typical 4 person family;one in college,one at home;jan 08 we cancelled the country club after 11 years,and we all have cut all expenses that did not fit into wants….we now just do needs…vacations we were able to mold them into company trips saving us $$$$ on rooms and gas….expense not coming out of pockets;we work a combined total of 75 plus a week we are both emplyed full time;turned in all gas guzzlers and purchased used v6s with over 100K on em…sold our home and put our profit into our 401ks. We rent a home now and will probably buy again when the kids are taken care of….do whatever you gotta do to get em thru school[college] so they won’t ever get caught in this mess we’ve made! america should be ashamed of our leaders that WE put in office….GOD BLESS AMERICA!
The recession today is much different than the recessions of times past. We did not have the internet in 1993 as it exists today. That was before Al Gore “invented” it. Today, we have 24 hour news channels (a plethora of them),newspapers online, chat sites, and more information available / more connected than ever before. So if someone yells fire in the theatre, the entire city hears it and jumps into a panic. Every Jo Blow “expert” gives his opinion even opportunists who predict devastation / disaster / DEPRESSION is listened to because they have a forum from which to speak.
This breeds confusion, panic and is an environment rife for people to take advantage of others. It is also a great opportunity to gather more information than ever before and make better informed decisions. I believe our society is learning to deal with this new power of information.We need to understand the information, its impact and almost filter individually the bombardment with a NO panic button vs. being pulled in a different direction daily depending on the waves.
It,s just the begining!! After what little savings some people do have is gone because of higher energy and food prices the slow down will get worse. The FED can only fix so much.
When people get down to not spending because they just don’t have it. What will the Fed come up with then?? It is a sad state this country has come to.
If we get a democrat president, the economy will improve almost over night. If we get a republican president, the economy will stay in the tank. Media 101
What I feel is a major change for the United States of America at the macroeconomic level. The past 65 years the core of America’s economy has been oil. With high prices of oil starting to actually affect people’s spending habits, economic data will turn increasingly negative as the consumer cuts back on their spending in order to ensure their own survival in this extended downturn.
Jobs will be lost and the economy will remain weakened until America’s entrepreneurs reinvent the core of America, which in this case would be new forms of energy. Not until then will we move forward economically.
There’s only so much oil left.
How can American’s be driving a 11 Billion miles less last month but oil prices are still going up. I’ve noticed in my bar that where once credit cards were about 15% of my business and cash the rest — it is now about 40%credit 60% cash. People don’t have the money in their pocket, but they’re still drinking. I THINK WE’RE IN A RECESSION. CONGERESS and the PRESIDENT need to get fuel prices under control.
This economy is being “talked” into a recession. Look at the Bureau of Labor Statistics unemployment chart. Unemployment is at around 5%, this figure is still historically far below the 7.5~10 of other troubled times. Sure gas and food prices make times tough, but these are long term problems (e.g. growing world economies, etc.) that will require long term solutions far beyond the economic times we are in now.
I will say one thing, we are currently in the mess we are because of greed. Money is truly the root of all evil and until we break these ideas of having to have more and more and more, were heading toward disaster. If you really want to know what is going on in American and why were where were at, just look at wages from about 1980 on and then look at inflation and see if you can connect the dots. My father made $32000 as a truck driver in 1980 working for a newspaper company. That was enough money at the time to pay for a brand new house in 1 year. People were paid fairly then because corporate companies were happy with 10% profit margins, now companies want to make 2000%. This equation is simple the only way CEO’s can make what they make in the corporate world today is by cutting the throats of the little man that holds it all together. I had a friend that lost his job along with 300 other people at a local firm that sold out to PNC, guess what if you took the total salaries of all three hundred people they let go it wouldn’t equal the bonus that the CEO receives of PNC.
Yes we are in a recession, and it won’t likely reverse until oil drops significantly. When it does investors will rejoice, feel richer, and start spending money they either don’t have (credit) or shouldn’t spend. I’d say the bottom of our current recession will be Q4 of this year (at least from the markets standpoint), the economy won’t rebound until next year sometime.
In the mean time, I’ll be on CNNMoney daily enjoying Mr La Monica’s straight foward, no BS reporting. Keep up the good work buddy, your reporting stands out marketedly from the rest of your peers.
We are in a recession. No one wants to use the “R” word especially during an election year, but sorry candidates, we’re there.
As a family of five, we have been able to sustain a pretty good lifestyle since my wife and I both work. We don’t splurge on useless items and vacations by any means but up until recently we could go out to eat or get away for a few weekends a
year. For the first time in our nine years of marriage, we have no choice but to cut back on extra’s or “fluff” since we have to spend so much more on gas and food. I don’t see oil and gas prices coming down significantly anytime soon, if at all. I believe the investors and hedge fund managers are causing the lion’s share of rocketing oil prices. If one looks closely at the oil markets, it doesn’t matter what the reasons are: dollar up, dollar down,dwindling supplies,attacks on pipelines, rogue countries building atomic bombs, Spongebob not being renewed for another season…oil has found a way to keep rising..
We will eventually have to change to alternative energy, I know…and in the meantime, it will be good to know that a few thousand investors will end up being billionaires..and when the economy is broken, their money will be worthless…So my final words to all you hedge fund managers: Happy returns guys!!! Spend it while it’s still worth something !!
“Consumer Spending holding steady..” of course it is dummy; we have to spend more money just to buy the things we need. So, we are spending more and getting less. “New home sales rise….” The builders in my area are having fire sales just to avoid the lenders calling their notes due on the homes in inventory. And no one seems to mention that if builders are giving up pricing on their new homes the ripple effect is that existing homes are, in fact, in fact worth less on the open market as a result.this creates a surplus inventory in that catagory which means that people could end up “upside down” in the homes they already own. Anyone remember “fuzzy math”? Seems it never went away.
This country does not need lawyers any more !! It needs visionaries like Washington and Abraham Lincoln to revive this great country once more !!! Get Obama in !!
What I don’t hear the economists discussing is that while inflation is rising in the form of fuel and food costs, real incomes are not keeping pace. So how are families making ends meet, by cutting discretionary spending, or putting it on the credit cards. So whats next, a credit card crisis (again), or decreased consumer spending and a deeper recession? I think the stage is being set for both.
I think that one’s opinion of whether or not we are in a recession clearly is based on personality. I travel 50% of the time for my job and I see full planes. I also see packed mall parking lots and as the unemployment numbers point out, don’t know anyone who is unemployed. Things certainly could be better, no doubt. However, just like people overwhelmingly want change in government, yet continually vote in their own reps time after time, I think people see (or hear through the media)problems with others economically (but not necessarily themselves)which is making things appear much worse then they really are.
Recession? How about DEPRESSION??? I live in Los Angeles where regular gasoline is running $4.13 a gal and a doz medium egss are $3.89 / 1 gal of milk $6.00. Unemployment is growing and there just aren’t jobs available. All of a sudden the little immigrant guy at the drive thru window at Burger King is gainfully employed and I am not. I only drive when I have no choice, I have joined a food co-op with a girlfriend where we plan our meals, split the cost of ingredients and we each cook 2 days a week abd have leftovers 3 days a week. We do our shopping once every 8 to 10 days, within a 2 mile circle to avoid wasting gas. No heat turned on this winter and there will be no AC this summer. Lowered coverage on insured vehicles, buy generic drugs whenever possible, began selling my personal things on ebay. And I consider myself lucky because i have a home to live in.
I blame George Bush and his waste of trillions of dollars we dont have bombing Iraq and I blame the greed of the gas companies. I dont know at what point we stop being apathetic and pathetic and do something.. Oh, thats what voting is supposed to be for right? Another joke. My vote, your vote means nothing, nada, nyet, zippo.
What has happened to this counrty is a disgrace and I blame BUSH for all of it.It appears to me that the heart and soul of this counrty the middle class is being pushed out.I am very nervous and scared for the first time in life about the economy we are getting hit from all angles and it’s going to get worse before it gets better. This is only the beginning of a long road. Gas, fuel oil, food, etc. the prices are just sick.Gas is $4.50 where I live.
We are NOT in a recession………..yet. Statistics have proven otherwise. However, the naked eye and our pocketbooks tell us we are close. There are two keys to recovery in my eyes. One: the housing market must stabalize. If Americans don’t have confidence in their single greatest asset – than negative setiment will flourish. Two: the media must stop with the incessant negativity in regards to the economy. Consumer setiment is directly tied to that in which we read/hear. It is almost as if certain media outlets want there to be a recession in the way they report things (even though to this point the numbers suggest otherwise). I wonder if a pending election has anything to do with that.
Anyone that thinks we are not in a recession is wearing rose colored glasses.. or is already so wealthy that they only have to cut into taking their boat out once a month from 2 or 3x’s a month to make up the difference! For middle income and certainly lower income families with a rather small discretionary budget.. there isn’t much to cut in ordre to make up the difference to cover the rising food and gas prices. I shutter in fear about what my heating bill will be next winter. Working families need to get to work.. so how do you cut that back!
Im’ disgusted when I hear how rich and fat stock holders are getting on these spking oil prices while we all suffer.
Whashinton is the problem, what are they smoking up there? Bush sold us out to every other country, left our boarder wide open to an INVASION, yes and invasion of our country by Mexico and any other freeloader that made it throught the desert. Soaring prices are due to GREED, nothing more. Bush is an oilman and so are all of his Washington cronies. What to they care if the masses go under they are on TOP!
I’d say we will see a depression, Yep, the “D” word because GREED knows no bounds!
I think it is going to get worse. I have trimmed all of the fat from my budget and I still had to take almost $500 out of savings to make ends meet this month. Gas went from $3.84 last Tuesday to $4.09 today. Each week at the supermarket, prices on every item increases $.10 to .$25. I drive only when necessary. My job is dependent on many different industries. It is salary and commission. I used to average $600 commission per month. I received $135 last month, not even enough to pay my car payment. Guess where my stimulus check is going. I am fortunate, because I have the savings to fall back upon. But for how long?
I’m 63 years old and I’ve never seen anything like the state of our economy at this time. My husband retired early and fortunately I have a good fairly secure job. However I can’t retire until I’m at least 70. Even then I don’t expect to have the wonderful retirement my parents had.I just hope I can live without asking for help from my children. Several of my co-workers are also in their 60’s and 70’s and still working. The house we paid cash for and remodeled for our retirement is now worth much less,so can’t be considered much of an asset. I worry more about my children and grandchildren. When my generation was starting out we believed we could have it all if we just worked hard. Well we did work hard and now it’s all being taken from us. My parents talked about the Great Depression. Are we headed for another one?
I think the Bear Sterns bailout marked the ‘bottom’. However I am still invested in an inflation protected bond fund and have traded in my ML500 on a SMARTcarfor2.. Might as well live with the reality of high gas prices. My recommendation, dump your SUV.
The economy is probably in recession, whether or not it meets the two-quarter decline in GNP or not. I would even question some of the economic data (CPI & unemployment). But I would be careful in placing the blame, because we are all to blame if we consider ourselves consumers. The fact is that demand is drastically outstripping supply all over the world when it comes to food and energy, especially when you consider the burgeoning new middle class in China and India. The only solution is for the consumption to slow down. And unfortunately the only way that has happened historically is through a recession. So, like it or not, the R word may have a silver lining.
Just curious, but was the world also about to end back in 2004 during the last Presidential election?
What about 2006 during the last “big” Congressional elections?
Yes, things are difficult, but we have suffered worse before (i.e. Great Depression. You who think that we are now worse off than during the Great Depression: Go talk to someone who actually lived through it. What we have now is nothing. We haven’t even gotten to the levels we were in during the 70s).
This just more media created doom and gloom. Turn off the TV, the computer, the car radio, whatever and take all the energy spent whining and complaining and do something productive.
If you believe the government is negligent, incompetent, etc., do you really want the “government’s” help in “fixing” this (never mind government fixes usually take things from sort of bad to the worst ever).
Or is it that the “wrong” people are in charge, so to speak? Do you really think things will change if you put the “right” people in charge?
Give me a break!
I can’t believe there are those in this comment string that want to blame the media. Are you for real? Look in your grocery store for evidence of the real problem: it’s NOT a media-driven negativity ratings frenzy. There’s a race going on in the grocery aisles–what’s going to be more expensive: milk, OJ, bread, or meat? And that’s all driven (pardon the pun) by the king of them all, gas prices! People are in real trouble. Here in the mountains of NC, only those who brought their fat retirement portfolios and trust funds can afford to keep the heat on. Like hundreds of families, we’re having to choose not only which amenities go unpaid (like phone), but which necessities go unpaid (like power). And we’ve got growing kids to clothe, and groceries to buy. God help us if someone gets sick! The economy is wrecked, and if anyone is to blame, it’s the people who decided to vote against their economic best interests and hire people to run the government admitted to hating government. We NEED a strong, well-run government to make sure the “trains run on time” like they did in the 90s. How the two parties in their arrogance can feel like they can skate by blamelessly is infuriating. How people can NOT blame the current administration for squandering Americas power and wealth is beyond me.
Of course recession has a commonsense definition. Are people still trying to live beyond their means and then blame it on recession when they can’t make a mortgage payment? All those who do not have cell phones, do not have cable television, carpool or take public transportation (or bike/walk!), grow some of your own food, enjoy the free public entertainment available rather than new movies, please let me know how this “crisis” is feeling.
I think consumer spending has gotten out of control; we all want to have our cake and eat it too.
Well, tighten that belt cowboy, and learn to live a little bit more cheaply. Oh, and cancel your subscription to ESPN, the Wall Street Journal, USA Today, etc. They’re all available free online, which is also free at your public library.
High energy and food prices are here to stay. So are depressed wages and salaries for 99% of the population. A couple years from now we’ll look at pictures of SUVs and big homes and wonder what the hell people we’re thinking. My advice: learn Chinese.
Buffett is politically invested in a Democratic victory in November and will use his status to push that agenda. Because Buffett wants to put the worst possible face on the economy I tend to believe that Greenspan’s outlook is more objective.
The economy is NOT in recession technically or otherwise. The economy is recovering from a downturn. Home sales are up and unemployment is suprisingly low. The only problem is gas and food prices; these expenses are in every household and create the impression of a worse economy than we actually have.
It’s going yo get worst and there is no way of stopping this recession. the Bush adminstration and his party who has been in control almost 8 years has spent more money than all of the past presidents combined. the corporations rule the world and also our elected officals. We have allowed the mortage banks to not be regulated to help make this mess. The big banks have been bailed out but not the borrowers. the banks can charge 30% on credit cards. It’s going to get nasty
We are in a recession but it is an important part of the cycle. Oil is up, yes, but that also is needed for this country to change its lifestyle. The price of gas will not come down with an opening of the strategic reserve because once that is used we will be back at square one. Since the country does not want to change because it is inconvenient to our way of life oil will continue to climb. And if we start to open the artic refuge for oil drilling we will only divert more resources to oil and not alternative energy sources thus extending the reliance on oil.
Just wait till the consumer runs out of credit. The last expansion was driven by cheap credit backed primarily by home equity. Home equity is down, loan qualification requirements are back to the norm. This recession is going to be long and painful.
Recession, most people are feeling the pinch of the higher prices, but the people in the 6 figure income brackets and credit card users are just “business as usual”. The “hammer” of the financial crisis has not hit. Should OIL and NATURAL GAS PRICES continue at the present level into the winter months, then you will see a financial catastrophe. People will not be able to pay for housing, heating, transportation, and food. AND, that is when “things are going to hit the fan”. We will begin to see people with an angry attitude. The people at the bottom of the economic chain are going to want to know why they are having to suffer, when people in other parts of the world are only paying one tenth of what they are paying for gasoline and natural gas.
For those that used their home’s like a piggy bank, regardless of their ratios; Thought that 300 Horsepower was more important than 30MPG; And thought that the unused balance on the credit cards was their safety net, this is a full on depression.
For those that planned well, saved, did not over extend themselves, the economy is in a minor down turn.
For those that invest wisely, this is an opportunity to acquire assets and long-term investments at a discount!
Which are you?
The technical definition of a recession is completely arbitrary. Also, it isn’t particulary useful, since it is based on past economic perforance instead of current and predicted performance. Yes, we are in a recession and have been slipping in deeper since Q4, 2007. How deep will it go and how long will it last? No one can really tell us, because no one really knows what’s going on with the economy right now, cuch less what will be going on six months from now. The ones who should know don’t care. Why should they care? They yanked their money and ran at the first hint of trouble. They left, as they always do, the middle class holding the bag. They’ll become bearish for a while (which means they’ll have more time for golf and yachting). Meanwhile, the rest of us will hope we can hold out for better times and that our families won’t end up living under a bridge.
I wish people like you would get a real job and then you would know what it is like to hump it very day and work for a living. So far this year the economy has not contracted we have a slow down going. Why are all you CNN freaks so fixed on saying we are in a recession?? If you do not like this country get out.
How frustrating our finacial ‘leaders’ are so out of touch with Americans. We have been in a recession in Kansas City for over a year just ask store owners, restaurant providers, small business owners, and those of us driving to work and grocery shopping for our families. Wake up!!!!
I know personally,,,,,, We are in a recession. I am having a hard time making ends meet with everything going up except my wages. Its not that I dont work either,,,, I am presently maintaining 3 jobs… one full time and two part time. I think our President and Congress, need to take a hard look at what they have done, and start worrying about their own country, But then again, why should he care, Hes an oilman about to go out of office,, and cannot be re-elected. The high price of fuel is in his best benefit. I know I am scared, and so are several of my family, friends, coworkers, etc.
Yes we are in a recession! you would
have to be an ostrich with your head in the sand to not recognize it. As
soon as the election is over happy
days are here again. how soon we
forget.
Consumer spending is up? That is BAD, because American consumers are suffering from record debt levels. Rather than saving and paying down their debts, consumers are spending more money? Sure the economy may enjoy a bump in production, but the truth is that one should not be borrowing more money to spend when one should be saving and paying down debts.
The economy isn’t headed anywhere. It’s already there, having been given up to communist China and middle eastern oil exporters years ago.
Ever wonder where Iraq’s oil exports are going?
We are now approaching or have approached , depending on what you hear, peak “cheap oil”. This only means fuel prices rise sharply. No one wants the U.S. dollar anymore and this hurts, so the dollar goes down and costs go up. All we need is to have a series of bad events happen and then all bets are off the table. Call it what you want then but no one will be able to afford anything.
I believe Alan Greenspan (the most successful Fed Chairman ever) on any topic related to the Economy. I predicted this would happen when he retired at the same time US elected a stupid oil man as president and he set off the new Middle East Wars! Additionally, ridiqued for voting for Gore who would have kept us on the fiscal path of success, no war and would have tackled global warming. Now Republicans, you pay!
I feel we’re about to enter a depression. Jobs are at a loss, (partly due to outsourcing overseas and high employee costs, the dollar can’t buy much, gas is out of control, and getting a minimum wage job is nearly impossible.
I think the terrorists have got what they intended when they took down the towers, a slow suffering.
We’re not in a recession, were in a DEPRESSION.
Steve Smith, I’ve traveled quite extensively in Asia, and lived in China for awhile (Guangzhou). And there are a couple of major differences in their educational systems compared to the US. First, China doesn’t educate all of it’s citizens. While we spend resources for special education, China doesn’t even really acknowledge that these people should be educated. Also, China may graduate a lot of scientists and engineers, but not very good business managers and leaders. Therefore, people may have a decent idea, but not a lot of know-how on developing a business plan and getting it started. This is what the US excels at – developing a b-plan, getting it funded, and growing a brand. This is what America’s future is – selling our innovative ideas.
Who are these Economist that keep making off the mark predictions and comments? — If Oil and Gasoline continue there upward trend sending Capital out of our country, then the economy will continue downward. To the Economist, how are things getting better? Is it foolish to invest ones money under these conditions?
Woody
The “recession” is a child of the “economic boom.” Truth is, there never was an “economic boom” unless people spending beyond their means and pushing themselves further and futher into a chasm of debt constitutes a good economy. Similarly, there is no recession unless you consider housing prices returning to realistic levels and wayward consumer spending being brought under control a recession. For those of us who did not go on a drunken spending spree over the past seven years, leverage their home equity to buy depreciating assets (cars, boats, toys, etc), and abhor consumer debt in general, the economy is just fine.
I hate to say it, but by 2009 we will be in what will come to be called the
Greater Depression, so this year will be a sloping downward year.Sorry.
I have yet to see little impact: restaurants and movie theaters are busy. Mall parking lots are full. Perhaps that’s because housing prices fell much less here in the northwest part of the Denver metro area … they never rose quite so sharply.
What Else Is Recession?
I’ve been in retail for 15 years and hav’nt seen sales this bad. Luckily I am still surviving but some of my business associates have not been that lucky. I downsized from 5 stores to 2 otherwise would be out of business by now!
I also participate in trade shows in Chicago, New Orleans, Memphis and some more cities and most of them are down by atleast 25-30% in sales and attendance. The worst part is that it is getting worst. Retail Sales are declining in every mall and trade show across the country and even if Walmart does post gains, that is because consumers are looking to get the cheapest prices and care less about quality. I think it is about time Bush understands to atleast cut down on money being sent to Iraq and start pumping it in to local economy.
sonny ahuja, milwaukee, WI
president.
Grandperfumes.com
Let’s do the math medium family income $45,000 per year medium house $209,000 this means houses are still almost double what they need to be (2.5 times earnings ~ $112,000) to be affordable to people. More houses will be foreclosed on as time goes on.
With increase of gasoline the economic stimulus package will go directly into George Bush’s friends hands e.g. OPEC and big Oil companies.
With 4.8 million Americans still looking for work but out of unemployment money they are not counted in the 5.7 million who are out of work and getting unemployment for 4.8 percent unemployment. So add them in and we are at 8 percent unemployment.
The 2 to 3 percent inflation rate the government gives us is also cooked numbers real inflation is 12 percent per year. They lie about it so they will not have to increase S.S. payments.
With S.S. payments increasing and Iraq War debt we no longer pay the interest on our national debt yet alone the principle.
Even after adding 200 billion a month to the banks for the last 4 months from the Feds banks are still reporting billions of dollars of losses each month. US businesses are losing 3 billion dollars a day.
We are so far into a recession. in 1999 the Dow Jones Average was 11,373 today adjusted for inflation it should be 14,400 at 12,600 this is a drop of 13 percent add in the drop of dollar of 50 percent against euro we have lost at least 63 percent of our wealth which means we have been in a recession the whole Bush term.
I believe we are in a recession and my family and I are trying save every penny we can. Hard time when summer is coming and the kids have been cooped up all Winter, but I feel this recession will last into 2009. People have no money to spend after their houses went down in value. I am trying to save at least 12 months in my emergency savings, while still putting away the max in 401k and to try and pay more towards our mortgage balance. Rather put away for a rainy day than to spend it on frivilous things
$4 gas is not sustainable for filling cars or the effect it is having on food prices. A typical family of four is having to pay an additional $200 or $300 per month for the same purchases they made last year for less, with no one having anticipated the sudden increase. Old habits die hard. Americans will not be able to make the lifestyle adjustment and will run up huge credit card debt. That industry will be facing unprecedented levels of default. Personal bankruptcy filings will double. Yes, Virginia, we are haeded for a bad recession.
This is a media-driven recession helped by the credit meltdown. Before the credit meltdown, the media (ala ERON) was determined to make the general public believe the economy was tanking to help get a change in Washington. Constant doom, gloom, recession, woe-is-me, is American in trouble? reporting eventually takes a toll on consumer confidence and business attitude. Real estate in most areas of the country would be okay but for the gloom and doom from markets that were vastly overpriced for no good reason. But the media insists on focusing on those areas so they can sell more advertising. It always pays to remember that CNN, Fortune, Time, NBC, Fox are in business to make a PROFIT just like GM or HP or Microsoft and not to report the news. As soon as the election is over and the media has seated a Democrat, the media’s overlook and reporting will be more rosy and upbeat.
Of course the economy is turning around, its an election year. The only reason anyone thinks the economy is improving is either they work for the oil companies or they are nieve. Government calculated inflation calculations don’t include food and fuel, HELLO!!! Those are the two areas going through the roof and affect everyone’s lives.
Just about every business is heading overseas, the US debt is skyrocketing, the energy policies being proposed are laughable. The future is not bright…
This recession is the canary in the coal mine. We are at the early stages of the struggle for future living standards between the developed and developing world. Right now the developed world is losing, and needs to find a way to get used to the downward adjustments, this US recession is the first step down in living standards as poorer nations step up.
malls are open but the people are just enjoying the free air conditioning, Wallies clothes racks are overflowing but there is free air conditioning, the grocery stores have marked up a few items but there is free air conditioning too!
To Jim in Columbus -
With all due respect, sir, what is the truth then? You claim a liberal agenda – what is the truth?
The consumer is tapped out – every dollar we spend at the pump is a dollar we cannot spend on eating out, clothes, groceries, and so forth.
We can drill for more oil – but it would only put off teh inevitable. At one point the US used 20 million barrels of oil a day (CIA Factbook). Even the mega field at the ANWR would last less than a month if that was all we had.
More and more of our country is being bought by foreigners – even Anheuser Busch may be bought by a foreign concern, InBev.
To say that thinks are rosy, or what is going on is liberal bias – then what is the truth sir? Look at history – we have never in the history of this nation had two steep cuts in the prime rate this close together. Look at the St. Louis Fed website for this information.
No, this is something new and scary – and we have only ourselves to blame.
I can barely afford to drive to work, and last night my family and I ate peanut butter and jelly sandwiches for dinner. We are broke. There is nothing left to cut. WE ARE IN A RECESSION.
Yes, I believe we’re in a recession. Instead of listening to the news media and trying to make heads or tails out of the economic statics, I use my own two eyes and common sense. What I see when I’m out and about are business shops closing right and left, restaurant activity down significantly, mall activity down, and strip mall parking lots that use to be full now mostly empty. On weekends in my neighborhood, people that normally would be out shopping are now staying home. People think twice before taking their cars anywhere. I was really surprised that this economic slowdown has taken so long to effect people’s spending habits. I think most people believed that after the Katrina storm ended, gas prices would go back down below $2.00 per gallon. That never happended, and it was only a matter time before people would have to choose between heating and cooling their homes and filling their gas tanks, and cutting back on spending in various ways. The housing crisis only added fuel to the fire. So what is one to do? Well, as a former financial planner, my advice is to watch what you spend, have enough savings set aside in case you lose your job, and wait for better times ahead.
The media, which is ratings driven, wants everything to be associated with hysteria. As long as there is any negative energy in any aspect of our economy, they will harp it as the worst ever and present it as an issue that covers all segments of society. How else to drive their agenda and ratings? I see problems, but not as severe as the media would present. It would be nice to hear or read some truly objective journalism.
If the government would open up the strategic reserve for 90 days, oil (gas) prices would drop like a rock. That would get all the speculation that’s in the market, out….and oil prices would remain lower because the spec’s would be afraid to get back in. That’s short term…..but it would have a long term effect. Of course that would be diametrically opposed to Cheney and the “boys” energy policy, but hey, they’ve robbed the U.S. for 8 years. Enough is enough.
Question is how comfortable are you financially today with,
1. Price of your house
2. Security of your job
3. Cost of Goods (Food, Gas etc.)
Answer is simple – Not comfortable on all counts. It is not a question of market sentiment. We are now down to the smallest unit of this economy – Me, I , You…..Oil needs to be at $ 80 / bbl or less for this economy to function. Yes I agree there are counties where people pay $ 8 – 9 / Gal. But this happens over a period of years and not months. If something is not done this economy is going to implode….
What is really terrible about all of this is that CEO bonus paychecks were up 11% this year. Why can’t, for one year, every CEO in America give up their annual salaries, and donate them to a cause to help stimulate our economy? Why can we not measure our economy by number of trees cut down, or people without health insurance, or soldiers without benefits? We will never measure our “true” economy because its impact would be too terrible for consumers. I mean, Adam Smith never invisioned payroll bonuses topping $50,000,000. It’s time that the hand became visible again–don’t you think?
Sad to see that the majority of readers/posters are focusing on the soaring price of commodities and luxury items. We are at a competitive intellectual war of sorts with India and China. Our companies are quietly outsourcing our jobs to these countries. Should it stop? No (and there are compelling reasons not to), but the next administration shoulda attempt to slow it down. I have certifications for various hi-tech positions and a Master’s Degree. In the 90’s, this would have landed me a nice paying position in a fortune 500 company. In today’s standards, this is a notch below middle class. If you’re not retired or have kids in school, you owe it to yourself to read
“The World is Flat” by Thomas Friedman. His visit around the world to various CEO’s and how they have all but given up hope on the US will help you understand the big picture and why we are in for a very hard landing as individuals. Our labor markets couldn’t be opened to many seeking employment here and so companies have moved overseas. Most Americans haven’t traveled and so think that perhaps our educational system is the best. Read the book, become informed, what they’re teaching us and our kids in Jr. High School is what Chinese and Indian students mastered in elementary school. The jobs are going, will continue to go overseas. By the way, we can’t take care of everyone, our system of government isn’t setup to do this and so pain is here but this is just a small appetizer of things to come (small is the word here). Believe me, gas and rising food prices are nothing when you realize that you won’t be able to find a reasonable paying job in 5-7 years from now. I was surprised to hear from the book that we have “0″ American born graduates in Mathematics at Johns Hopkins in the past few years. I guess we’ve been sleeping at the wheel. Get the book and understand what you might be able to do to soften the pain for you and your family. The near future it is every man for himself or “every family for themselves”. This book should be required reading for all Americans.
Bush and his Republican party should get full credit for this. All we heard and Bush made sure of this in 2000 is that he inherited a recession now who is he going to blame? Clinton? This guy is the biggest loser in HISTORY…Vote all of them out in Nov.
I find it hard to believe that reshuffling of corporate capital could make up for what consumers may no longer be able to spend. If the expansion was driven by people spending over their heads, how much growth can we expect if they can’t do that anymore?
Things are a bit tricky here in MI, but not nearly as bad as it could be, or has been, or will eventually be. If people can keep their head and modify their behavior, alter their lifestyle to live within their means,this situation becomes an opportunity to define priorities. Remember, the best offense is a great defense.
The economy is tanking because of governmental negligence. Healthcare affordability and availability is a huge problem. The erosion of our manufacturing base (as an engine for growth) is a huge problem. The state of safety net programs such as Social Security and Medicare are a national shame.
Americans are very pessimistic and rightfully so. America has lost it’s compass. The problem is with the leadership in Washington DC.
If you are in the construction industry you have been in a recession for the past year and a half. Is that a train or daylight at the end of the tunnel? We may not know until the end of next year.
Historically, all economies are cyclical and this one is no different. It will adjust in time. But consumer confidence would be strengthened if there was a coordinated “war” on fossil fuels. Such a national pledge would require national change and sacrifice, typical of most wars. Individuals would change their transportation habits, industries would alter work schedules to use mass transit and modify production techniques, scientists would tackle energy conversions the way they focused on the atomic bomb, and the government would divert billions of dollars from the national budget. It would be a war for independence. Right now, between oil producers, oil refiners, speculators and gas-guzzling vehicles Americans don’t see any hope.
This economic downturn is created by Crony CEO’s at banks,Rating Agencies,Bush administration and Gullable consumer. Now Feds is trying to bail out the same Banks by lowering interest rates, so that these Banks can borrow cheap money and Lend at much higher rate because Mortgage interest is dependent on 30 year bonds.
Feds should raise the interest rate and support the dollar, thus oil and commodity will come down.Government should prosecute speculators.
Sentiment plays a major role in the country’s economy upswing. I have been reading different website and I do get the feeling that media is hell bent on painting a gloomy picture and predicting a deep and a harsh recession. Suppose that a severe recession hits the US. In that case, all the journalist and the so called ‘experts’ will keep their job and rejoice in their ability to predict accurately about the negative economic growth. It is the middle class who will face the loss in their wealth, income and confidence. Feel sorry for this system
A weak dollar could be in American favour. It make America export again, and that will turn into profit for corporate America which in turn make stock soar. This will eventually offset for the housing woes and credit crunch.
I think we will see the dow rally by September, if not the latest March 2009, if still nothing happen then i am afraid there will be a depression. Historically, a recession never last for so long. I believe since December 2007 US already in recession, but the authority is keeping the fact to prevent havoc in the financial market. JMHO
Economy headed down. Hard. Harder than the experts think.
Good news is things will perk up after the election, no matter who wins.
We are at a tipping point. You hear that phrase on the news about once every five minutes in unrelated fields from chemistry to biology and oil prices and SUV sales. Not very many people seem to realize it but we have reached peak oil.
Worldwide GDP is actually the same thing as worldwide oil consumption. No room for oil increase=no more worldwide gdp increase=worldwide recession starting this year
We live in a society that is built on cheap abundant oil. We have done nothing to prepare. Oil prices are under control now compared to what we are going to see as supplies begin to suffer disruptions and people try to horde enough gas to keep driving to work. Within 4-5 years civilian use of fossil fuel vehicles will probably be strictly curtailed as governments attempt to conserve the fossil fuels we need to run our farms, military, and civil infrastructure.
Economic trends follow long term cycles, which is difficult for impatient consumers and business writers to comprehend and acknowledge. The median price of housing in the Sacramento, CA area has declined 29% in the past 12 months. Conservative projections of 15 million “homeowners” having negative equity in their homes after housing prices have hit the bottom of the current market cycle make me think that it will be a few more years before consumers have adjusted their household economics to reflect their reduced net worth that resulted from the decline in the residential real estate market.
Recession is 2 Quarters of Negative Growth- in other words “recessive”
We have not experienced even 1 Quarter.
Buffett is pandering and knows he is using the word *recession* incorrectly.
As a writer for CNN Money you should be ashamed to post so much nonsense- look deeper- be a journalist.
The comments on here are ridiculous. THe end of the world only happens once, yet almost everyone on here is predicting it. As I first read them I was laughing, then I started feeling sorry for people who believe this junk. There are three things at play right now – 1. housing 2. commodities/inflation 3. stock market correction (result of #1). The housing mess is at its end. It was only a regional problem anyways. I live in the Midwest/South and prices have already been rebounding considerably. Check out housingwatch.com and look at Nashville, Dallas, and Houston. Onto commodities – grains all started because of ethanol – let’s get rid of the gov’t subsidy and corn will fall, as will wheat, etc. Metals are a result of China/India and are likely not to fall. Oil is a result of speculation (at least past $100/bbl). Once the EU economies weaken at year’s end, the Euro will fall and the dollar will strengthen relative. Third – the market. It corrected 15-20% and has since recovered much of that. It’s probably going to trade in a range through the summer until the commodity issues are sorted out. So, I’m not worried at all, and personally I’m not affected because I lived life lean in good times, and can weather this blip on the radar.
Everybody wants to live like a rock star; few people can play the guitar. Once Americans ran out of home equity, which was extracted to buy gadgets we didn’t need with money we didn’t have, the economy deteriorated.
The era of bling bling has officially ended.
Paul is a respected columnist, but this economy is BAD, and the comment that there was “positive” news on the housing market? The press plays with numbers as we all know. The housing numbers are still near 17 year lows, with no end is sight. I had to laugh at that housing number for new home sales and laugh on how it was somehow positive. Everyone is in denial except for Warren Buffet, who has a portfolio to prove he knows what he sees.
I was around for the recession in the 1970’s, what we are experiencing now is no where near what was going on then. recession, I think not, slow down yes. Sure times are difficult, and will be untill everything once again settles down and gets where it needs o be. As for the price of fuel, we have been spoiled for years, and although the price of a gal of gas is about the same as a gallon of milk it is still cheaper than our other liquids, everything will eventually get in line, just as it has in the past, and as it will in the future.
So long as US consumers continue to send more money out of this country than is sent into this country by foreign consumers, the economy will continue to deteriorate. Sure, there will be ups and downs along the way, but the rubber must eventually meet the road. Do your part by buying domestic goods. Better yet, buy local goods!
Last time I checked, isn’t the definition of a recession actually negative growth for *two* or more quarters? If we actually posted growth (albeit pitiful) last quarter….
Concern definitely is justified, but I have to question whether the economic fear mongering we’re seeing run rampant in the media is doing more to hurt our economy than other factors.
While the worst is always a possibility, those who are predicting that the US economy will never recover and will never again reach the heights of 2003-2005 need to go back to school and re-take some Econ classes.
For those thinking that the subprime crisis and bursting of the housing bubble are signalling the end of days for our economy and that 2003-2005 is the best it’s ever going to get. What did you say afeter the dot com bubble burst pre 2003? “Oh it will never again be as good as it was in 1998″? 
Next Step: Do you really think all these kids are paying $4 a gallon for gas? No Way! How can they afford to pay $4 for gas and provide for a wife and baby off the same thing they were making two years ago? They’re not! They’re putting the credit card in the slot on the pump and paying minimum payments when the bill comes in just like they always have. Only now, ther’re not the only one’s doing it, and they’re not always able to pay the minimum payment. This huge credit bill is going to come due soon, and no one is going to be able to pay for it. Then we’ll have the sub-prime problem all over again with Citi-Bank, etc. Get ready because this is a double-wammy–we’re just half way through!
I CHEER HIGH OIL PRICES!
High energy prices are simply a reflection of reality. People have to react to them, by driving less, more conservatively and buy smaller cars. We cannot embrace sustainable energy development and use without high energy prices.
We ARE having a recession, but it is not nearly as deep as others, because employment is still excellent.
The loss of the middle class is occurring, but it is still possible for those who work hard and speak English well to do fine. If you want to improve your financial status, first start by improving your language and communications’ skills, and read!
Knowledge is power.
Bernard Shaw had it right when he said that …poor English dooms a person into their lower class…
Henry Higgins:
“You see this creature with her kerbstone English… Well sir, in three months I could pass that girl off as a duchess…â€
Communications’ skills parlay directly to money
sanjosemike
Hey baby boomers. Yes you, people of my generation. Look what you did. You spend because you are the first generation to consistently have a two career family. You spend because Mom and Dad left you their savings. You spend because you tap into the equity in your homes. You spend because credit cards are easy to get and to use. You spend. You spend. You spend. What are you going to tap into next? Or has the well run dry?
How did we ever get oil @30.00 brl and had all we neede and now big oil is reporting billions in quaterly profits and thats’s not revenues…
that’s PROFITS. We Americans didn’t manufacture the gas guzzler, the BIG THREE DID AND GOV’T played along. Dont blame me. I bought what was available and don’t compare other world prices with our $4.00 gallon when Saudis gas is $.45 gallon. We must blame CONGRESS as they have not designed an energy policy and stuck with it. I say,”GET RID OF THE INCUMBENT PARASITES”
The matter of “it” starting and ending has been so blurred by doctored CPI’s and other adjusted values that all we have left are our senses. It seems that the gov’t is so intent of wanting the economy to be good that they are willing to distort every bit of analysis to prove the point. All of my senses tell me that we are in trouble I no longer trust gov’t numbers or declarations. It’s gonna’ be 10 tough years.
If you look at the technical meaning of recession then we have not met the criteria nor are we even close. The news people are doing what they do best, and that’s make people panic. If I look at energy prices and realize that it’s really only costing me about $20.00 more a week to fill up from this time last year and the cost of my groceries hasn’t gone up that much more comparibly so it really isn’t as bad as it could be. The cost difference is about the cost of one meal at a restuarant. The signs for this downturn have been around for almost 2 years. I paid attention and am now in better financial shape than I have been in the last 20 years. Oh yeah, if I were Warren Buffet I’d be yelling recession too. Did you notice that he is looking to spend about 40 billion dollars in the overseas market? If I had his money I’d be yelling recession too. No wonder he’s the richest man in the world. He can create his own market just by opening his mouth.
Hey, at 50 I’m pulling money out of my 401K to pay off some bills to make ends meet now. I figure I’ll be working well past age 67, 6 months anyway when I can (if I can) start collecting Social Security payments.
Economic bailouts such as the rebate checks and home mortgage subsidies are postponing the inevitable, and are ensuring that an economic collapse, if it happens, will be catastrophic. It’s like putting patches and band-aids on a very large dam, allowing it to fill up even higher before collapsing. At issue is the fact that middle and lower class Americans have financed their lifestyle to the point where we are spending every single penny to pay our mortgage, car, and credit debt. Lowering interest rates will not help, since there isn’t ANY more money left in the paychecks to pay for more debt. The vast majority of Americans are living with no cushion or safety net.
The people who analyze, predict, and regulate our economy are the economic elite, and are blind to the plight of the people who make up the backbone of our economy, and therefore severely underestimate its weaknesses and the impending disaster.
Has our country ever had a President or Vice-President with significant financial accumen and background? I would love for Mitt Romney to be named McCain’s VP choice, precisely because I would like to see what could be accomplished. Imagine someone with real business experience and knowledge leading the politicians that direct the financial machinations of the country!
I believe the economic downturn has a ways to go and it won’t be pretty. Alot of households have lived with “fluff” in their lifestyles and are eliminating the “fluff” now to make ends meet. Others who didn’t have more than basic living expenses are either trying to find alternative income to get by or are just not making it. There are already more “average” people using services that traditionally were used by the homeless and unemployed. We, as a family of 5, were going to take our first big family vacation in 13 years and couldn’t afford it with the rise in gas and airfare prices. We’ll probably see more petty crimes from desparate people and those who choose to just take out their frustrations in such a way. I think the recession is bringing about permanent changes to some of our habits. I’m already making great use of my bike. With higher food prices and using my car less I guess I’ll be losing some weight…
Consumer spending has held up, but has anyone drilled down to see what consumers are buying. Increasingly, I see purchases related to a mid-to-long term reduction of expenses. For example, purchases of hybrid vehicles and more effecient appliances should be on the rise. Also, backyard or home entertainment products should reap the benefit of increased fuel costs. When you can’t afford to fill the tank you tend to stay close to home. The quandry is whether these transition exoenditures will bridge the gap and soften the impact of the un-declared recession.
To Pete, NY, NY: You hit the nail on the head. Panic is what could make all the normal rules go away, regardless of what financial metrics say (or don’t say). And compared to our society at the time of the Great Depression, there is not much social cohesion to impel people to willingly share sacrifice and hard times. America as we we know it, not existing in a generation? Frighteningly plausible.
I think 2003-2005 period is the peak of standard of living for Americans. It will keep go down due to debt and inflation problems. Foreign oil will suck tremendous wealth away from Americans. It does not matter when the official recession(s) happen. The standard of living will never return to the easy money days of 2003-2005.
The sad thing is if you realize this year is worse than last year, think what’s going to be next year and the year after next.
The unemployment rate hasn’t “spiked”; in fact it has hovered between 4.5 and 5.0% for the past year or so (it actually came down in April).
I get the feeling there are a lot of short-sellers out there….
Doomsday prophecies are always popular, but the economy really has been improving in every measurable way since the bottom of the mortgage crisis. We’ll have to splurge less and drive less, but the statistics show we’re already adjusting our lifestyles, and that most of us had a lot more budgeting room than we thought. Gas and food costs may never fully return to their former levels (especially gas prices, which, in the long run, can’t go anywhere but up), but ignoring the signs of an economic recovery runs the risk of negating them.
Both Greenspan and Buffet are correct. According to Greenspan, the credit market is recovering, meaning the wall street firms are getting better and loan packages are now being traded, but that does not translate to easier credit for consumers. The banks have to readjust their lending policy taking in the new risk horizon – that borrowers will default. Greenspan is looking at wall street while Buffet is looking at Main Street, as prices are going up, consumption is going down, consumers are starting to pay down the debt and save more. The thing is, there is no one to blame except ourselves, the consumers. We fell in love with the SUVs, we ignore the global warming signs and thumb our nose to any conservation measures, we spend and spend and rack up the equity loans, we charge purchases to our credit cards like there is no tomorrow, we promote free enterprise and keep the government off the backs of the big corporations with meaningless regulation and enforcement, and we want to keep the value of the dollar down to help the export segment of the economy. Now is pay back time and we, the consumers, are at fault.
The division between lower, medium and high wage earners has increased so dramatically that the high wage earners do not “feel” the squeeze that the rest of us do. Since their (the wealthy) inability to experience what the average American does, like trying to fill their gas tank or support a household on a dwindling budget, nothing is being done to curb inflation. Salaries remain the same on the lower end of the pay scale while ever increasing on the higher levels. This has been accelerating over the past several years to the point that we are now. Some are completey devasted by the state of the economy and others are totally satisfied.
What we are seeing is the result of the structural degeneration of the middle class. Incomes have been stagnant for twenty-five years. More middle class tax dollars have gone to subsidize corporations (like big oil). It takes two incomes to do what one once did. And now consumers are nearly tapped out on debt. Once the consumers stop buying, there go the profits and stock market, and there goes the economy. The coming debt crisis will make the housing crisis look like a walk in the park.
NO. A resounding NO. The economy is at full steam, growing close to 1% This is NOT a recession. We have 96% EMPLOYMENT, interest rates are low at 3.9%, reflecting low CORE inflation. The headline inflation will come down once the fat is cut from the system. Remember, gasoline is at $4/gal, or $.25/cup. No one has come forward to offer any liquid in society that people use on a daily basis that is that cheap. Not coffee, not beer. The stock market is doing well, the consumer is still resilient. The stimulus checks should boost the economy 1-2%. Thus NO RECESSION.
I think we are in the beginning of this economic downturn. The sub-prime mess alone should be a significant indicator of this. Our “recession” is going to last for quite some time.
Because of the overwhelming liberal media bias, there is an agenda underway to promote the worst possible economic scenarios now, as the election draws near, so that the biased media can promote their agenda for getting Democrats elected. They obviously are rooting for an official ‘recession’ to arrive in advance of the election, because that will fit with their hoped-for news ‘template’. Just remember, when you are invested so heavily in defeat and doom-and-gloom, things are turned upside down such that bad news is good news, and good news is bad news. Some of us can see this clearly; most of you cannot.
California real estate is selling very fast if it is priced well according to today’s values. This could be the start of a floor on values being created in CA. Multiple offers from Investors and Owner occupants who are seeking bargain basement prices coupled with pent up demand are appearing on bank owned REO’s and short sales.
New FHA guidelines are a huge help for owner occupants. This trend will continue until the new home builders’ standing inventory and future REO’s are worked off.
“And as I’ve argued in several recent columns, the fact that many big corporations have ample amounts of cash that they are using on mergers as well as to buyback stock and increase dividends is a good thing. Unlike prior recessions, Corporate America may help to keep the economy afloat even if consumers pull back.”
Your analysis is flawed: The fact that some large US corporations are doing well does not mean that the US economy is doing well or will recover quickly. Most of these corporations are actively investing in the[high growth]emerging markets overseas and not in the US.
Wow, Geore Howell Palmyra, your doom and gloom is almost as bad as your spelling..hell, the future’s so bright, I’ve got to wear shades…relax, things are getting better day by day
Yes we are in a recession.
It would be nice if more companies found ways to “share the profits” with the labor force. Historically companies have stated that “labor costs” are the largest costs of doing business and the quickest way to go from red to black is to layoff a few hundred or a few thousand workers. While these actions may help a companies “bottom line”, has anyone studied the affect that these actions have had on the economy over the last 8 to 10 years?
There is a growing divide between what companies are willing to pay and what workers need to survive and prosper in this country. The result is a dying middle class. History teaches that when a countries middle class disappears the nation quickly ceases to exist as a worldpower.
The only thing missing thusfar is wholesale panic. If panic takes hold, I believe life as we know it in America will disappear within a generation.
$4.20 for bread. $3.67 for a HALF gallon of milk. $4.10 for a gallon of gas. $3.96 for a small box of your favorite box of breakfast wheat and corn.
I get one and 1/2 full grocery bags now for $150 a week. I used to get six full bags just a year ago.
I don’t have the extra income to pay for more food and more gas. I am walking more, making soup more, and feeding my family less and less since our pay has risen less and less compared to food and gas.
Call it what you will…i call it pain. It hurts and hurts bad. (or “badly” if you prefer.) How long can we suffer this pain? Until we riot over food like other places in the world. “We aint got it so good right now.” But we can.
Coal saved us in the mid to late 1800s. Wind and solar can save us now. I hope are not too slow to learn.
It hurts bad.
I am glad Mr. Buffett has the same accession as mine:”Call it whatever, it’s recession to me and it’s recession to most of the people.” Wall Street can call it whatever make them feel better. WH can make whatever the number to argue “we are not there yet”. But if you eat, drive, live in a house, you know recession is here!!! Unlike the WMD, it’s real and it’s right in your face.
(BTW, our gas price went to from $3.97 to $4.17 in less than a week…)
You mention in your 5/27/08 article, Welcome to the “recession” that “Personally, I think it’s an encouraging sign that, despite many economic problems, consumer spending has held up relatively well during the past few months.” I think what you failed to consider is that with skyrocketing fuel and food prices consumers have little choice. To be fair you should mention that consumer debt is increasing and savings are decreasing. This is where the money is coming from and what happens to consumer spending when debt is maxed out and savings are depleted? My opinion, the economy crashes and burns.
A Rant.
Why go only halfway? Call it a depression. As the home values continue to fall even those of us with older fixed rate mortgages are in danger of being upside down. This is all happening while we are becoming underemployed or unemployed and small local companies are failing due to lack of business. The lower half of the economy is going into default. Anybody else think it’s deja vu of 1932.
None of us in the lower middle class made the decisions that led the United States to these conditions. The Uberwealthy/mega corporations did this to us. We buy the products that they create. We consume. This time they fed us something bad, all while the President himself led the cheers for broader homeownership. Too bad he didn’t promote higher wages or tougher oversight.
I think we are in the beginning of this economic downturn. There are too many negatives out there. I think high grain/commodity prices are here to stay. That means higher food prices. Higher fuel prices are here now and I don’t see them subsiding much. Everyone wants to point to consumer spending as a positive. They say, consumer spending is holding up. Yeah, it’s called digging deeper in debt. American’s these days are going to spend money. It’s how we are now. They will spend until there’s no one left to loan them money. What happens when home equity loans are defaulted on and credit cards are defaulted on? I think we are in a downturn that will last for years, not quarters. I hope I’m wrong.
Its almost over, Now that time has past enough for banks to stop loaning the bank vaults to everybody, everything should be coming back online within the next 6 months. The only trouble is Oil. If it doubles what it is now, then OPEC will be the ones that stoled Christmas
This is just one of many adjustments Americans will face as globalization rearranges our economic structure in this country. The majority of Americans will have to lower their lifestyle expectations.
More and more dollars spent are pumped out of this country to foreign entities. Only to be returned to the US in credit and investment: this foreign investment now dictates how we will be able to access and use it, and how much value we will receive from it.
The same dollars spent internally on American centric output would have recirculated more quickly and in more economically friendly terms to the consumers (i.e. jobs, benefits, similar lifestyle choices).
But alas, B-School types will tell you to embrace the future of globalization, after all it is making more of them wealthier faster. Meanwhile, you and I will have to grin and bare it.
To those complaining about oil company profits…. please review the definition of profit margin, and compare the oil companies’ margins with those of other industries. Yes $4 hurts, but Americans also don’t need to live 30 miles from work/school. You don’t have to have cable tv or a cell phone. There are many other ways to cut costs. Also, how do you expect the price of oil to react to the huge increase in global demand, especially when the US gov’t limits what we can do to increase our domestic supply because of complaints from “eco-friendly” groups?
There are a couple of key points not mentioned in the article.
1. Credit card debt is soaring. At some point this will pull back with a negative impact on the economy.
2. People are pulling money out of 401-k accounts for nothing other than day-to-day living expenses. This is a real bad indicator and needs to be watched closely.
Since the items not mentioned are both negative I tend to think that the economy is in worse shape than we think so I am more in Buffett’s camp regarding the downturn being both longer and deeper than most economists expect.
The USD is failing as part of a plan to bring in a new currency. This currency is likely to be equalized with the EU Euro. Americans are just too Arrogant to realize they are subject to the world economy. As the most waistful nation on the planet, we have been designed to “dispose” of everything for the sake of social acceptance. So, kiss your money goodbye America and get ready for TRUELY tough times ahead. Because, you have not even seen the beginning of trouble. You have grown weak and pathetic as a nation because of the Elite that dictates our future!
We’ve been in a recession since last summer, inflation is at over 13%, the government is giving away money – think about it!! When has the U.S. government given anybody free money with no strings attached?? We must be in a world of hurt (remember Congress convening in secret not too long ago?)
So what’s the solution? Getting rid of the problem is a good start – no more FED and no more fiat money. There’s a very good book that came out recently (within the last month)by a presidential candidate on the subject – NY Times best seller as a matter of fact.
I find it interesting the way people question whether the US economy is in a recession. To put this question into real context you should compare GDP numbers per capita (2005 – 2008). Although GDP is rising so is your population (at a faster rate) – so on average Americans are becoming poorer. (also try adjusting for inflation). This is even more dramatic if you compare GDP per capita in Euros instead of dollars – then you have seen a severe decline in wealth levels. I also have doubts about official US inflation figures. Want to know the state of the economy? Do the maths… http://www.onemanstanding.com
Whether we are in recession or not, the only thing you need to ask yourself is “are you better off now then you were this time last year?” My answer is no. I don’t really care what you call it or how you debate or slice it or categorize it. It doesn’t take a genius or a PHD to know the economy is sucking air right now. Only in America can we debate the meaning of something, as oppossed to actually acknowledging it.
We are in an economic downturn no matter what you call it. The good signs now or in the future that optimists cite are not the most relevant to the economy. What is relevant is that the vast majority of Americans are being hurt by the rising cost of everything and real incomes are not keeping up. It will get worse.
McCain is going to be president because America is a afraid of a truth telling black man. McCain will plunge the world into WW III and save the economy by slashing the world’s population by more 2/3’s allowing consumerism to regenerate to it sales base. Business will able to grow profits anew. Think of the money to be made.
It’s hard to be optimistic when, every time I go to work in the morning and pass a few gas stations, they’re charging 3-5 cents more per gallon. I read an article estimating an average of $5-$6 per gallon average by 2012. Energy costs are only increasing and, as unfortunate as that is, that affects the price of everything end-to-end. Think things are bad now? Wait until the truckers that haul our products are paying $6/gallon. Things are only going to get worse.
I predict the current recession will last longer than anyone is saying. We are in deep trouble. Our economy had been going great guns since all kinds of rather dumb consumers chose to buy things, many of which were not essential, on credit. For themselves or there kids. Now those folks find themselves in a crunch. And they are not getting out of it anytime soon. We more reasonable folks who choose not to rack up mounds of credit, who lived within our means and did not waste money on any of the latest non-essential gadgets are not going to pick up the slack. We ARE in a recession and I predict we will remain in one for a few years. The companies that make essential things – food, drugs, fuel, clothes – should do OK. But I would not be investing any of my money in any company that makes non-essential products right now, those will be hurting. And frankly should be hurting.
It is only the beginning. The dow probly will fall between 1500 to 200 pts. It will be a long one due to the reason know one seems to understand the comsumer.
The world economies are headed for an adjustment whereby labor costs will equalize worldwide. The devaluation of the USA economy will bring Europe down and China up. Most people do not want to acknowledge the behavior of wealth.
I agree with Warren and disagree with Greenspan. Greenspan is trying his best to encourage the consumers and citizens of the United States. The economy has been in a slump for a while and has gradually gotten worse in recent months. If it weren’t for gas prices which have lead to inflation in food and energy, he might be right saying we have a 50% chance. We will not see a significant improvement unless gas prices go back down and unemployment stops rising at the rate it is. The housing turnaround might occur but not at any significant rate in my estimation. Consumers just don’t have the same resources to spend like they did a few years ago.
Let’s see, tanking house prices, soaring gas and food prices, mounting job losses, record-low consumer confidence…sounds like good times to me. Look, we don’t know if we are in a recession right now, but like others here have said, who cares, it’s a recession for many if they lose their jobs or can’t pay their bills or can’t feed their families. But I guarantee you this, before we get to the other side of this economic slump, it will turn out to be some of the worst times since the Great Depression. $5 gas? Are you kidding me? Families and businesses alike are all feeling this oil price shock. And it’s an absolute joke. They should ban all futures trading in commodities, and allow only those planning on using the actual commodities to buy futures. Hey, there’s a concept! THAT is actual supply and demand…what’s going on in the oil and commodities markets right now is an absolute disgrace to the world, and has absolutely nothing to do with supply and demand. Rich investors driving the price of everything through the statosphere just to make a buck, while others starve as a result. They oughta be arrested for crimes against humanity, because that’s what this is…it’s a crime against humanity.
We are in an economic slow down, definately. Recession, not sure. The economic growth numbers do not substantiate it. Unemployment numbers certainly don’t substantiate it. Although the press does substantiate it every day. It might be nice if they would report on some positive things instead of constantly over stating the negatives. Like you stated in the article, housing sales are up over same tiem last year. Employment has certainly kept pace. I often wonder what would happen in this country if people were to experience some of the recessions of the past. 12% unemployment and 16% interest rates. We would have anarchy because as one reader stated earlier many people don’t have anything saved to get them through on month let alone a year of hard times. Maybe we need a recession to wake them up. Also remember that the stock market looks ahead and ignores the past. Wait till the Fed stops cutting rates and you will see the speculators run for the exits as oil and gas prices come down to more reasonable levels. Inflation will become the number one priority by the end of the year. Things could get a little worse before they get better.
We’re probably at the bottom of the downturn, right now. Looking back, for the economy, Q2 will have been the bottom , Q3 and Q4 will be better.
We need to use less oil, import less, produce more, export more, reduce the trade deficit, and reduce the government budget deficits. Keep more of the cash in the country. Then, things will get better.
Yes we are in a recession. And if the bunch of greedy people we have running the country and the oil companies do not do something in the near future I think we will be knocking on the door of a full blown depression. You must remember that there are many people that can not even afford to drive to work . Yet the oil companies are allowed to make 43 billion dollars a year in profit. I can not believe that the people we have trying to run this country are too blind to see that there is something wrong with this picture.
We own a business that depends on salesmen that travel every week. Yes, they are suffering and so is the company, because of higher gas prices — but not to the extent you might think. Our top salesman’s commission is actually up 7% YTD. Our total company income YTD is down 7%. It seems the less experienced and less aggressive salesmen are listening to the news and are convinced they can’t sell.
For those of us who could not use our home equity to prop up our lifestyle, we’ve been in recession since 2001. And come on, Paul, corporate buyouts, mergers, and stock buybacks don’t add any value to the economy. Increased dividends, yes, but you know that’s a drop in the bucket. The economy is in far deeper trouble tha anyone is admitting.
Paul, I don’t understand why Americans spending more money is considered a good thing. If it’s measured dollars to dollars, then you’re just measuring inflation. In any event, Americans should be saving money rather than trying to spend their way out of this recession. The deeper Americans get themselves in debt, the more it ties the hands of the Fed to fight inflation. They can’t hike interest rates while everyone’s in hock.
To jason smith, upstate, NY:
Wow, how much more hate can you spew? Is the economy doing great? No. Is it a recession? No. If it is not a recession, don’t call it one. Say that gas prices are so high people are cutting back on their driving but don’t call it a recession unless it is a recession by definition.
Going down and will down much more. Greenspan is being patriotic when he says a 50% chance. I applaud him, but I won’t be investing in anything but hedges. Buffet came back from his shopping trip in Europe without buying anything. It is time to read the ancient wisdom literature and learn how to enjoy live no matter what happens.
The economy is really heading wherever the investors, oil companies, and top level executives what it to go. It’s really pretty much under their control. Maybe some of the top executives could hand over their millions of dollars in salaries to those loosing a job because they messed up. The traders know exactly what they are doing, ripping us all off.
There is no question. YES in capitals. This writer believes that there are a number of levels this will hit at, and some are yet to be seen. It is like the human body fighting cancer. There is the cancer itself, but you try to fight it with chemo and the liver, kidneys, digestive system, blood, cognitive process all can be affected. There is a synergistic tendency for the whole organism to be dragged down into a dangerously low level and problems feed off each other. I am worried that things are bad enough that the economy will mimic this pattern. Buffett is right. This will be very damaging.
The only way to hit the oil companies is to nationally boycott gas. Take mass transit…get to work some other way. FIND A WAY…Hurt them. record profits???? Eff them. They’re liers and they line the pockets of the federal goverment. There is no hope, no more classes… only mega rich and everyone else.
gas ONLY went down because people are driving a lot less….that is like companies closing factories to prop up share price….it is a downward spiral…we just keep driving less and less until we don’t drive anymore and US oil/car companies/Bush/McCain STILL don’t get it….if bush didn’t mandate ethanol, people could afford to feed their horses, they will need them soon…neocons will get money short-term from oil/coal, but long term they are shafting our whole country and people are still fooled….bush/mcbush apologists say oil companies are not at maximum refining capacity, but that too does not change the fact we are at peak oil.
Sure china, russia and india may be stockpiling oil BECAUSE they know we are at peak oil and they want to be the last one standing…this does not refute peak oil or give excuse for high gas price, it reinforces the fact Bush/McBush are in denial and are fooling all of us…..
neocons know what is going on and are just squeezing out every last drop of profit before we switch over to electric, not giving any subsidies to wind/solar/hybrids because they know that a huge paradigm shift is occuring, HAS to occur, and they just put their heads in the sand and don’t want to acknowledge it!!!!
hasn’t chevy promoted volt about a million times now??? they are a sham also….I will be driving honda/toyota who put about a thousand times more dollars or yen or yuan (dollar is worthless now, thanks to neocon policies of just printing ever more and hoping other countries are willing to keep losing money investing in treasuries) into research and development……even nissan says they will have 100% electric car by 2010 and I trust all the foreign companies more than any US car company propped up by short-sighted King George and his protege McBush……
Are you kidding me? If anyone out there thinks we are not in a recession, and forgive me but the “official” recognition of it is irrelevant as the perception is what people react on, they are not only fooling themselves, but they are out of touch with reality as well! Look all around you people….things are not bad, THEY ARE ABSOLUTELY FRIGHTENING!
If it looks like a duck, walks like a duck, quacks like a duck…
Of course we’re in a recession. The question is who cares what name we give it? Folks are strapped. And it’s not just because energy prices are high, although that seems to be the trendy way to complain nowaday. The previous 5 years or so have been been the best times anyone has seen economically since the booming 80s. Incomes and jobs were growing, debt had never been cheaper, and everyone’s feeling of security grew every time their home appreciated 22% in a year. Folks threw thousands of dollars around in equity acting like they never had to pay it back. Sure, energy prices are tough to swallow, but I wonder how tough it would be to pay those bills if folks hadn’t gotten in over their heads in this country in debt over the past half decade. This recession is an economic breather. It has to happen, and it’s probably going to keep hurting well into 2009. We’ll come out stronger in the end though.
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Well i have been partially employed since 2002 which basically i have had to work two part time jobs to make a living. i know i consolidate trips, dont go to the gym anymore on sunday. fixed my old car with 200k on it and it still dont work right. im in debt up to my eyeball and my credit rating stinks and I am someone with a 4 yr technology degree. im getting by and i know folks have it worse than me but i believe that trickle down economics dont explain the evaporation. meaning if you have 100 gallons of or 100 dollars if you pour that water or them dollars down the tree,some of the money will go in to pockets before it makes it all the way down or in the water’s case roughly 25% will evaporate into the tree before the water reaches the ground. so to me based on natural science trickle down economics dont work. have went to college in minneapolis i am very sensitive to infarstructure issues like bridges roads,aiports, electricity grids just to name a few. I also believe that minimum wage should be indexed for infaltion or to cpi or something. moreover rebuilding americas infastructure will create good paying job for americans to get pride back in being an american. and finally there should be an amendment to the constitution that states. no money should be allocated by congress spending said money is going to do the most good for the most people. that way the corporations dont have to spend good money in washington lobbying politicians they could spend it on good wages for their employees.