what do you think about our economy? (Full Version)

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Leslie_JnJs_mom -> what do you think about our economy? (7/15/2008 7:41:10 PM)

The news is blowing things up like we are on the brink of a total crash. I think one bank going under is not a sign of impending doom. What do you think am I wrong?



karlie -> RE: what do you think about our economy? (7/15/2008 7:47:06 PM)

I think our economy is in deep trouble and I honestly don't see it getting better, other than a short flash of hope/relief here and there. I think it's a sign of the times.

But, I'm not worried or stressed. Our hope is in God who has it all under control.



NoShow -> RE: what do you think about our economy? (7/15/2008 8:31:48 PM)

I think you're wrong if you think the only problem we're facing is "one bank going under".



Miss Giggles -> RE: what do you think about our economy? (7/15/2008 8:49:44 PM)

I am not sure. Our states had a bad economy for a few years now. Many are doing ok though.

But a lot of people moved out of state. But some are still spending like no tomorrow.. so it's hard to tell.



Harvie -> RE: what do you think about our economy? (7/15/2008 9:02:50 PM)

Actually, a lot of banks have been going under -- those stories were just not as well publicized as IndyMac. And my understanding is that there are a number of other banks teetering on the brink of FDIC takeovers.

Prices and costs of living are rising faster than salaries.
Home values are stagnant or dropping.
Unemployment and outsourcing overseas is on the rise.
People are not saving the way they used to.
Too many people live paycheck to paycheck.
Too many people are significantly overburdened with high interest consumer debt.
We do not have a stable, long-term, economic policy that addresses national debt nor our dependence on foreign oil.

Looking at all of these things -- I'd say that the US economy definitely has "issues."



Leslie_JnJs_mom -> RE: what do you think about our economy? (7/16/2008 12:11:09 AM)

No things are not pretty are they. I was hoping that things were not as bad as the news was making it out to be. They keep showing these people in lines comparing this to the great depression when people lost everything.
Is Bank of America ok? Or are they one of the banks going under?



prophet -> RE: what do you think about our economy? (7/16/2008 3:03:35 AM)

The Big banks will be bailed out by your Feds by prinitng more USD. To protect yrselves you should hedge your savings by buyin gold.

Shalom



kernsfamily -> RE: what do you think about our economy? (7/16/2008 9:19:54 AM)

Good times and bad times....

it's cyclical...

once you have 5-6 or so years of economic growth (as we did from 2002ish through last year), things are going to slow down for a while. Though, this time around, there are some extenuating circumstances....(housing and oil being just two of them)

we haven't had a significant slowdown in quite some time....(the last 2 recessions were fairly minor, the last one being the one that started in early 2000)

Then we have politicalization of the situation....there's a candidate out there that must convince as many people as possible out there that they are miserable, the country is in shambles, and that the economy has NEVER been as bad as it is now.....so, we will feel compelled to elect him as our "savior", along with his Marxist economic and social policies....

Unemployment? sure, it's rising, but, historically, it's STILL fairly low....5.5% for June (IF we ever get back to the "BAD" rates of 8+%, THEN we can talk about how "bad" things are.....)

Outsourcing of jobs to other countries? That's the most overblown "issue" recently. (Especially with the news earlier this week of Volkswagen building a factory in Tennessee, bringing jobs here from Germany......to go along with most any other foreign car manufacturer coming HERE to build cars)......more jobs have COME to the U.S. than have ever been SENT overseas......over 500,000 texans work at jobs that have foreign origins.....(the politicians always talk about the fairly small amount of jobs that go overseas....but, you won't hear many talk about the many jobs that are brought here....the "key to their success" is to make things look as bad as possible)

For many people, it all depends on what state you live in. Which, just illustrates the fact that state and local governments have much more control over your "economy" than Washington does. (I know...Iam a former Michigan resident....been here in DFW Texas for 12 years now....)....the differences between the economy here in Dallas, and the economy back home in Detroit is STARTLING....(and can be attributed to local and state political leadership, or lack thereof...(not to mention the influence of "special interests" that run the state of Michigan, and what they have done to make it what it is today)

now is a great time to load up on Ford & GM stock.....wow...talk about bargain prices....and, as they always have, will rebound....



GroupW -> RE: what do you think about our economy? (7/16/2008 9:39:58 AM)

I think I agree with Kernsfamily. Generally, the economy is proving a bit more resilient than one might have thought. If we have a recession, we're starting from a very good position of low unemployment and good productivity. Hopefully that can minimize some of the pain. Inflation is rising but still at manageable levels. Increases in inflation are largely due to exogenous price shocks like oil.

Generally, the state of the economy is fairly decent given the circumstances. Nonetheless, there are some ominous clouds on the horizon that are legitimately worrisome.

The "stagflation" word is getting a fair amount of press, and rightly so. The government is being forced to inrease money supply during a time of very high deficit spending on the fiscal front. Parallels can be drawn to the Viet Nam era when money growth and spending were not controlled and led to inflation. Still, our situation is not as bad as back then.

The banking system is a mess due to the liquidity crisis. This is really the #1 problem right now. When banks can't lend, the general economy heads south. It will take a while to fix the current crisis. Some banks will fail, possibly even a big one or two. Hopefully the Fed will manage the failures to minimize the collateral damage to other institutions.

In short, there is cause for worry but there is also cause for optimism. Generally speaking, monetary policy takes 6-18 months to start showing up in the real economy. The Fed began easing in late '07. In theory, that would imply signs of recovery by this time next summer. I wouldn't expect much before then, given all the other issues we're facing right now. It's reasonable to expect the lag in monetary policy to be at the longer end of the spectrum this time.



redeemedsaint -> RE: what do you think about our economy? (7/16/2008 10:11:17 AM)

I believe that we are seeing the beginning of the end times and it's only going to get worse. If we continue to accumulate the debt that we are in, then we are in major trouble.



relady -> RE: what do you think about our economy? (7/16/2008 10:36:40 AM)

I am not incredibly positive about the economy; however I do know a thing or three about housing. DO NOT listen to the national news about the state of the housing market. DO NOT listen to the bank spin on the problem with mortgages. Housing markets are locally driven, and while you do have a national average, that is never by any means the last word on housing prices. In any large metro area housing prices will vary even right down to specific subdivision. Here in St. Louis it is very school district driven - we have some spectacular school districts here and guess what -- a handful of them had price increases in double digits for the last quarter. Some aren't doing as well. But I can tell you that all this foreclosure mess is being driven by a handful of states, with CA, FL, NV, and AZ leading the pack. Are foreclosures up everywhere? Yeah. Are prices down everywhere? Maybe a little. But there is no way that homes here are losing 20-30% in value. Just isn't happening.

And the banks whining about mortgage foreclosures? I have about no sympathy for them. They WILL NOT work with people, in spite of their spin that they want to. They made loans that should be illegal to people to whom the real terms of the loans were not properly disclosed. Add to that the normal amount of layoffs and other life changing events that can cause such issues and voila! Foreclosures are up. I could go on and on about lender issues, but I won't.

Relady folds up her soapbox. Just my two cents.



kernsfamily -> RE: what do you think about our economy? (7/16/2008 10:48:11 AM)

quote:

And the banks whining about mortgage foreclosures? I have about no sympathy for them. They WILL NOT work with people, in spite of their spin that they want to. They made loans that should be illegal to people to whom the real terms of the loans were not properly disclosed. Add to that the normal amount of layoffs and other life changing events that can cause such issues and voila!


not only the banks...but, the many, many people who "fudged" their income and other items on their loan forms (especially with "no income documentation loans"), in order to "qualify" for houses that they shouldn't have gotten....

AND, real estate speculators, as well...

they, along with some mortgage banks, are ALL to blame....it created the "perfect storm"......all came crashing down at once.....



seagullplayer -> RE: what do you think about our economy? (7/16/2008 10:51:49 AM)

I think the old adage goes;

If the guy next door loses his job it’s a recession, if you lose your job it’s a depression…



kernsfamily -> RE: what do you think about our economy? (7/16/2008 10:57:03 AM)

quote:

I believe that we are seeing the beginning of the end times and it's only going to get worse.


Iam sure many people said that exact same thing......80 years ago.

not to mention the time period of 1873-1896...and a myriad of other economically bad times in our nation's, and world's, history.....that make today's situation look like a "piece of cake".....



3cappuccinosmom -> RE: what do you think about our economy? (7/16/2008 2:18:39 PM)

I think things are clearly not as easy-breezy for most as they have been. We are certainly feeling a bit of a pinch these days.

However, my perspective is colored a bit by having lived in Ethiopia and married an Ethiopia. What he and his family has been through (and what his family is going through now) keeps us from whining. We feel very blessed indeed that we have such an abundance of good things and finances that we are able to help family--and we are working with an income that is well below average, bordering on poverty level.
I might start to fret a little when McDonald's goes under and cable TV starts going down the tubes for lack of customers. [8|]

I think a lot of our economic problems have to do with both the government and individuals spending way above their means. I basically know *nothing* about economics, but it seems to me that we have been on shaky ground for a while, having gotten so deeply into debt, often for very foolish things. I am hearing psa's on the radio encouraging people to visit gov't websites for their $40 subsidy coupons so they can buy themselves new HD TV's so they don't suffer when stations stop broadcasting analog.[8|] And there are two coupons allowed per family. If that's for real, isn't that just a wonderful thing for the government to do for us?

About forclosures, sure the banks have done some bad things, *but* I know too many people personally and heard too many interviewed "victims" who freely admit to lying ("fudging") about their income in order to get a house they truly couldn't afford. Individuals spending more than they can afford have to take at least some portion of responsibility for this problem.



GroupW -> RE: what do you think about our economy? (7/16/2008 3:45:59 PM)

quote:

ORIGINAL: 3cappuccinosmomAbout forclosures, sure the banks have done some bad things, *but* I know too many people personally and heard too many interviewed "victims" who freely admit to lying ("fudging") about their income in order to get a house they truly couldn't afford. Individuals spending more than they can afford have to take at least some portion of responsibility for this problem.


Amen. There are lots of folks to blame for the current mess - too many to lay at the feet of any one particular group. (It takes the combined effort of lots of people making lots of different foolish decisions to make a mess the size of THIS gumball.)



JimboFletch -> RE: what do you think about our economy? (7/16/2008 4:00:32 PM)

quote:

ORIGINAL: kernsfamily

quote:

I believe that we are seeing the beginning of the end times and it's only going to get worse.


Iam sure many people said that exact same thing......80 years ago.

not to mention the time period of 1873-1896...and a myriad of other economically bad times in our nation's, and world's, history.....that make today's situation look like a "piece of cake".....

I just might begin to squirm a bit myself when things approach conditions in the Carter administration.

One can almost divide the near-panicked from the much less stressed by age.



BlueAdept -> RE: what do you think about our economy? (7/16/2008 5:03:31 PM)

I think we are seeing multiple issues.

1. Housing/Banking - They are conjoined twins. People taking out 125% loans, interest only loans, and other crazy loans. I don't know which was worse, the banks for suggesting it, or the people for doing it. Yes speculators might have had a small role in this mess, but if you didn't have a bank funding them; they would have been unable to get the loan.

2. The movement of some labor out of country. Again I think there are several issues here. Labor unions not seeing the world has changed, and shipping becoming more reasonable. Shipping used to take 2-3 weeks or more to go from China to the US, now you can make that trip in 3-6 days. But then you also have the white collar workforce, or management being willing to give up "control" of the process flow. China and other countries have improved their manufacturing methods, so years ago they tried to make the same items but only put out crummy work. Today they can make the same item for a fraction of the cost, and you can not tell the difference between the 2 parts.

3. Political issues - There are several here. Taxes, health care, retirement, and I am sure there are others. These are all "hot button" issues, no one is willing to touch them. It is like we have a crazy aunt in the attic, we all know she is there but none of us is willing to do anything about it.

4. Related to all of the above - Personal responsiblilty, some where along the lines we have lost this. The country as a whole seems to want someone else to take care of them. We have various groups wanting other groups to give them money/jobs/houses/education etc... We have girls having children, and no father around to provide. We have nearly lost the moral compass, and even those that cling to a moral compass seem to live like the Judiao/Christian beliefs are old fashion and out of date. (50% of all marriages in the church end in divorce.) This area has a huge issue, because of the debt issues. How many people are willing to spend like crazy only to walk away and declair bankruptcy because they can't deal with it. We want what we think everyone else is getting, and we are not willing to wait until next month we want it NOW!

While I don't think we are in horrible shape, I think we are on the edge. I read something years ago that said 2007-8-9 would start a economic depression. When I read that it didn't address the oil, housing and other issues that have come up. But it did talk about the Boomers retiring, and as a result the spending slowing down. When you expect growth due to spending, and you have people going into a horde mode, recessions are what happens.



Leslie_JnJs_mom -> RE: what do you think about our economy? (7/16/2008 6:03:58 PM)

quote:

ORIGINAL: redeemedsaint

I believe that we are seeing the beginning of the end times and it's only going to get worse. If we continue to accumulate the debt that we are in, then we are in major trouble.

It has always been that way. I have heard people say that we are closer to the end now then we have ever been. Well yeah time does not move backwards. People have been looking for the end times since Jesus went back to heaven.



prophet -> RE: what do you think about our economy? (7/16/2008 7:58:21 PM)

quote:

The banking system is a mess due to the liquidity crisis. This is really the #1 problem right now. When banks can't lend, the general economy heads south. It will take a while to fix the current crisis. Some banks will fail, possibly even a big one or two. Hopefully the Fed will manage the failures to minimize the collateral damage to other institutions.


The liquidity problem is only a consequence of something more fundamental ie the sub prime problems. The US finanacial community have become too innovative with their derivative play where assets can be played out manya times in lending. When the asset value hit the skids, the pack of cards come a tumbling down with it. Thats whats slowly unwinding in the balance sheets where the institutions have to prop up their asset figures by infusion of capital from where?

The Feds....by printing more $$$$ to help prop up their balance sheets.

When these derivative garbage has totally unwind, you can only hope that the USD has not become totatlly worthless!

Shalom



APZR -> RE: what do you think about our economy? (7/16/2008 8:52:14 PM)

I'm ignoring the doom and gloom media, looking at my own numbers, and changing my biz when I see a shift. Since I spend the whole day at work looking for opportunities, rather than spending my evenings watching the news in the evening, I work in my yard and garden.... I love summer time veggies.



JimboFletch -> RE: what do you think about our economy? (7/17/2008 8:27:18 AM)

quote:

ORIGINAL: APZR

I'm ignoring the doom and gloom media, looking at my own numbers, and changing my biz when I see a shift. Since I spend the whole day at work looking for opportunities, rather than spending my evenings watching the news in the evening, I work in my yard and garden.... I love summer time veggies.

You are one of my new heroes!
[sm=thumbsup.gif]



earthless -> RE: what do you think about our economy? (7/17/2008 8:54:32 AM)

quote:

ORIGINAL: Leslie_JnJs_mom

The news is blowing things up like we are on the brink of a total crash. I think one bank going under is not a sign of impending doom. What do you think am I wrong?


Many would say that is because they want to make sure the people are prepped to vote for "change". If you catch my drift.

Apart from that.. it is amazing to see how the coverage of the massive gains and progress in the Iraq war is not covered by the mainstream media.

Things that make you go hmmm....



bzirk -> RE: what do you think about our economy? (7/17/2008 11:38:58 AM)

quote:

ORIGINAL: Leslie_JnJs_mom

The news is blowing things up like we are on the brink of a total crash. I think one bank going under is not a sign of impending doom. What do you think am I wrong?


When compared to the thrift failures from the S&L crisis, it's nothing, and we survived that. However, that was the only far reaching financial crisis going on in this country when it started happening. We have to remember that several major hits are happening. The debt in this country, both indidvidually and collectively as a nation, is at absurd levels. Energy prices, which affect the prices in every area of the economy, are at an all time high. Last but not least, the housing crisis and the ensuing credit crunch that's been created is crippling to many (even those who did not participate in bad practices). We're just not in a good situation at all.

Having said all of that, I do think the media is contributing to the hysteria. No question. The mainstream media is biased against the current Administration, so if they can put that Administration in a bad light, they're going to do it. I don't remember them showing so many photos of people lined up around the block for their money when only a couple of institutions (even big ones) failed during the S&L debacle. But then the big closings weren't happening during an election cycle. [8D]

But the media did not create the consumer price jump of 1.1% in a month. The media did not create the high prices I pay for groceries and gas that are really cutting into an already tight budget. Those are real and not manufactured by the nightly news, which btw, is not how I make my assessments of the economy. I base it on economic indicators and also real things I see occurring. Usually, that's not the things that make the front page much less the nightly news.

So is there hope? Sure there is. People still need to eat and live somewhere and put clothes on their backs and on and on, so demand is going to remain. Will it remain at the same levels? No, it won't, and maybe that's not such a bad thing. What people have got to get in their heads is that we are still at a standard of living that is extremely high compared to the rest of the world. It's absurdly high. The other thing to remember is that we are in a global economy, and the U.S. is a big player in that, but we need to fine tune our place. The dollar being weakened is helping to make inroads into some foreign markets. Yeah, they're getting our stuff cheaper than they normally would, but some places weren't even getting our stuff before. Eventually the price will go back up. But I'm not even sure we should be keying on manufactured goods as much as we do. Is that really what we want to be our mainstay as a country? It's not our mainstay anymore, but the national pscyhe still talks like it is. I guess old habits die hard.

Truth be told though, if I think about it long enough, I could really get hacked (to the point of steam coming out of my ears) when I think of the people who made and the people who took out bad loans knowingly. They are the ones who created the situation where the fed had to cut rates to a point that's created this decline in the dollar.



NoShow -> RE: what do you think about our economy? (7/17/2008 11:43:31 AM)

quote:

ORIGINAL: bzirk

When compared to the thrift failures from the S&L crisis, it's nothing, and we survived that.


Seriously, even when you throw in Freddie and Fannie into the equations?

Plus, I would have thought that MBS and CDO would have somewhat leveraged things up, making this worse.



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