Recession

So, it seems we could be going into a recession, a real recession.

Signs of the times:

Consumers spend every penny they have, saves rate is the worst since 1933, the Great Depression

http://www.usatoday.com/money/economy/i ... omes_x.htm

US Dollar rate for 2007, steadily weakens

http://www.x-rates.com/d/USD/EUR/hist2007.html

Gold rates high:
'Investors are coming into gold because they are uncomfortable in other markets,' said Holmes. 'If the Fed continues to cut rates and inflation continues to rise, that is almost the perfect environment for buying gold.

http://www.forbes.com/markets/feeds/afx ... 10155.html

http://www.usagold.com/dailyquotes.html

Merrill Lynch says it's here

http://www.telegraph.co.uk/money/main.j ... eco107.xml

Goldman Sachs says we are heading for unemployment rate to go from 5% to 6.5%

http://www.cbsnews.com/stories/2008/01/ ... 2917.shtml

A Wall Street superstar this year who runs Balestra Capital Partners, Jim Melcher, says he's "worried about a recession. Not a normal one, but a very bad one. The worst since the 1930s.

http://www.newsandpolicy.com/news/2007/ ... cessi.html

Re: Recession

My Dad has been talking about the economy for a while, and now with every morning another story on the subprime crisis, credit crisis, gold prices rising, I'm thinking - oh crap.

What's your spin? Are we heading in deep, or is this all smoke and mirrors?


To me it has been obvious this was going to happen. There are to many high end boutiques in almost all of the suburbs ($200 jeans anyone?). The push for a "little bit of luxury" that Americans have been going into head first i.e. flat screen t.v.'s, new steel appliances so they look "good", rehabing homes past their actual worth and at the price of a loan they have to pay on, and add that to prices of homes being so high and health insurance rates hitting the average person hard - this was... inevitable. How bad, I don't know, but all I can say is - crap.

Re: Recession

THE RECESSION WILL ULTIMATELY BE SEVERE

At no time in the past 58 years has the unemployment rate risen 60 basis points (50 bps is the actual recession threshold) from the cycle low without the economy slipping into recession, and now have the jobless rate hitting 5% in December versus the March/07 trough of 4.4%.

http://www.financialsense.com/editorial ... /0109.html

Re: Recession

You know what bites about all this is that in a recession imports increase in price. And what has America demanded? Cheap goods, outsource everything so most items are imported, so everything we buy could go up significantly, double crap. Hello buy American, is there anything left to buy?

[PrincessFiona]

Re: Recession



They are projecting that home prices in our area will have fallen 16-23 percent by this Spring. Lets hope they are exaagerating. Of course we bought at the peak right before the bubble burst.

We had two neighbors move to TX...crazy neighbor and another neighbor....Neither have been able to sell their house in a year and our former neighbors (not CN) moved back last week. If we had to sell our house right now, we'd be sunk.

[houseelf]

Re: Recession

While I completely agree with the prognosis of "recession" for the current economic outlook, it bothers me that ther is only ever bad news about the economy: Unsustainable Growth!, Wide Variances in the Market!, Bubble!, Inflation!, Unemployment!, Devaluation of the Dollar! Overvaluation of Stocks!, Speculation Amock! Lack of affordable housing because of rising real estate prices! Real Estate Slump! Things are never just "on track".

Obviously, this type of hysteria is not exclusive to the news about the economy. It is probably a confluence of factors: the modern media, the extreme inundation of information, or just a human tendency for negativity. It lends a "Chicken Little" feel to everything. Except this time all factors suggest that, at a minimum, the ecomomy really is experiencing a setback.

I heard on a morning talk show that only 5% of jobs have kept up with inflation over the last six years. I agree that the "luxury lifestyle for all!" is a component of this recession, but not the only one. There is plenty of blame to spread around: extreme corporate greed, a very expensive and currently ineffective war, increased global competition without adequate preparation for job transitions, professional lobbyist/pork barrel projects, exponential increases in personal expenditures for health care, and increased expenses for all levels of education from preschool to college. I know that I'm extrapolating a LOT by writing this, but I'm fairly sensitive to laying blame to consumers for current circumstances. (In other words, I don't think that this was your insinuation AT ALL but I'm running with my tangent here, beg your pardon. )

Focusing on "indulgent" citizens lets too many guilty parties off the hook. All you have to do is go to the grocery store, fill up your tank, purchase a prescription, or find a decent preschool or tutoring service to understand that this phenomenon is not due exclusively to clever marketing tactics by Pottery Barn, DKNY, and Lexus. I truly hope that this the root cause of this isn't laid before the middle class as some sort of immoral defect on their part. Although we could all stand to drink a few less lattes.

Kelly

Re: Recession

I totally agree Kelly, this issue is not just at fault to the idividual, our government has made some LOUSIE decisions, and plenty I'm sure we know nothing about. Makes me want to learn even more about our upcoming election, we do need a change, but from who?

America has become more a debt 'junkie' than ever before with total debt of $48 Trillion with the highest debt ratio in history.

That's $161,287 per man, woman and child or $645,148 per family of 4 -- an increase of $45,514 more debt per family than last year.

Last year total debt increased $3.9 Trillion, 5 times more than GDP. External debt owed foreign interests increased $1 Trillion; Household, business and financial sector debt soared 9%.

72% ($35 trillion) of total debt was created since 1990, a period primarily driven by debt instead of by productive activity.

And, the above does not include un-funded pensions and medical promises.

That is quite a chunk of money.

edited to add link:

http://www.financialsense.com/editorial ... /0315.html

Re: Recession

That's a good point Lily. I find myself frustrated when trying to figure out what to buy. It's hard to riffle through stuff with a toddler telling you "Go!" (btw who taught her that? :tsk: ) I'm trying to buy local if I can, and am starting there. Maybe we could find a place to paste items we like to buy with a clear conscious. It's also hard to be poor and to buy something that is not imported. We are enslaved to the process ourselves, even when you don't want to be. Funny thing is, I remember as a kid t.v. adds that proudly stated their items where made in America.

[Meenah]

Re: Recession

I was recently at Gap Kids and everything was made in China, very frustrating.

[Vishenka69]

Re: Recession

I think everyone is talking about the recession because a). they need to talk about something and b). if they predict the worst and then it doesn't happen it'll be better than the other way around. Media tends to take the most extreme position in everything. I don't think we'll hit a Depression like in the 30s but the economy has been booming for 10+ years and it's due for a slowdown. Nothing goes on forever and the business cycle tends to average 7 years give or take.

While I think that buying stuff made in the States is an honorable thing to do, the world economies are way too overdepended on each other. If one crashes significantly it will have an effect on the rest of the world. Every big US company makes lots of money in Asia in Europe. If US consumers stop buying items made in that part of the world and their economy suffers, their consumers stop buying American products or stops coming here to shop and we hurt too. It's a Catch-22.

[Rapunzel]

Re: Recession

Ahhhh, we've been about to hit a recession since right before this particular Bush took office (right before his first term began many years ago).

Now I really do believe we're about to go into a recession.

I think this is a self-fulfilling prophesy in many ways. I am getting very, very tired of journalists trying to BE or MAKE the news rather than just report it. I DO think journalists greatly influence the daily lives of average Americans, in other words. And, I DO believe in self-fulfilling prophecies.

[Rapunzel]

Re: Recession

And, if this time we really ARE headed for a recession and maybe worse then it's time to get a president into office who understands the economy, knows finance backwards and forwards, and has made it his life's work to "fix" things gone wrong (oh, little things like the Olympics, numerous companies, Massachusett's state university system, etc.). Yup, I'm talking about Mitt himself. The old piece of sports equipment really does have the brains and experience to fix something like this - far beyond what ANY of the other candidates could or would do.