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Do you have even a basic economics background? Even basic undergrad macro students know about unemployment and how the numbers only include those still seeking work.
I suggest maybe taking some basic micro and macro courses to get you up to speed and some history courses might help too. My background is in economics and history, though I work in commercial banking now.
Please do some research of your own before telling much more educated (in business and economics at least) people such as Wild to do more research.
Early 80s were certainly much worse than late 80s. I think by the time this whole thing is over we will equal or surpass the economic difficulties experienced during the early 80s. I don't see it getting as bad as the 1930s as the president elect will be more proactive in dealing with the economy than Hoover.
Last edited by Humboldt1; 05-25-2008 at 08:47 PM..
1. In the 80s did major banks fail or have the potential to fail? No, it was S&Ls, big difference there.
3. Was there a nation wide housing crisis that was as bad as the real estate crisis of the great depression or close to it? I should add that subprime was just a warm up lap. The big picture is jumbo exotic loans which will be resetting starting this fall all the way to something like 2012 or something along those lines.
The REAL numbers are generally MUCH higher than what is reported. So if they are saying its 5% you can bet your behind it is most likely 10% or some where around there. I also should add, that during the tech bubble they extended unemployment benefits back then so more were counted. This time they have not extended unemployment benefits so the numbers are skewed even more so.
1. Rakin got it.
3. Most of the record drops in home prices are records broken from...the 80s.
Unemployment- Well, the government said that unemployment averaged 10% in the 80s and that more than a quarter of the US was living below poverty versus 13% now. That means unemployment was double the average over the past few years no matter how you crunch the numbers. I was using unemployment rates as a comparison figure, not a hard analysis.
Everything else I have no right to dispute, your the expert.
Quote:
Originally Posted by Humboldt1
Compelled,
Do you have even a basic economics background? Even basic undergrad macro students know about unemployment and how the numbers only include those still seeking work.
.
Once again, I was only intending to use it as a comparison tool. I actually learned about unemployment in high school economics but you can still use it to compare past times. I wasn't saying "oh, only 5% of people don't have a job!", I was just saying that by historic standards, it's a comparatively decent figure. I know some basic macroeconomics but no, I'm not an economist by any means and I admitted that.
I am extremely worried about hyperinflation. Ever since the stock bubble of the 90's I have been worried...and warning others. This downturn is different, very different. Stagnant wages combined with inflation in housing, healthcare, education, and energy is a bad sign. Today we have no new technological revolution to grow the economy. We are no longer necessary to the rest of the world, we cannot even supply our own energy needs! The dollar is seen as a falling currency and is being abandoned. This is not the 80's and anyone who thinks this will be a mile recession is decieving themselves. This will be an inflationary depression, the worst possible kind. Unless we can get control of the dollar, we are toast.
Wild Style - The 80s did take a hit on banks. many had to be absorbed by larger banks to keep from going under. In the late 80's banks put up banners instead of signs and every few months a new banner would appear. The problem today is that there are just a hand full of national banks that control the banking industry. The gov't can't afford for them to go down.
States should reinstitute Usery laws. Ignorant People today must not understand the concept of credit. What the credit card companies are doing should be a crime and people let it happen to themselves.
yes, those were S&L as I said, not major banks. Look into S&L
Quote:
Originally Posted by compelled to reply
1. Rakin got it.
3. Most of the record drops in home prices are records broken from...the 80s.
Unemployment- Well, the government said that unemployment averaged 10% in the 80s and that more than a quarter of the US was living below poverty versus 13% now. That means unemployment was double the average over the past few years no matter how you crunch the numbers. I was using unemployment rates as a comparison figure, not a hard analysis.
Everything else I have no right to dispute, your the expert.
Once again, I was only intending to use it as a comparison tool. I actually learned about unemployment in high school economics but you can still use it to compare past times. I wasn't saying "oh, only 5% of people don't have a job!", I was just saying that by historic standards, it's a comparatively decent figure. I know some basic macroeconomics but no, I'm not an economist by any means and I admitted that.
You and Rakin need to do more research. As I stated, those were not major banks those were S&Ls, as stated in my second reply (which I am sure you two don't even know what that stands for).
The rest I can't debate you on for the following reason. You both need to inform yourselves about history back then, what S&Ls were. How unemployment rates work. How long from start to finish did the 80s unemployment rates hit its highest peak? Are we at that same point in time in this economic downturn? What other factors are at play. This all goes into being able to sensibly make analysis and arguments for how things are going.
Quote:
Originally Posted by Humboldt1
Early 80s were certainly much worse than late 80s. I think by the time this whole thing is over we will equal or surpass the economic difficulties experienced during the early 80s. I don't see it getting as bad as the 1930s as the president elect will be more proactive in dealing with the economy than Hoover.
I agree, I don't think it will get depression bad, but a long drawn out inflationary period, I do see.
Last edited by Wild Style; 05-25-2008 at 10:33 PM..
I stand by my reply, many a local bank got absorbed due to financial problems in the 80's. This did not only apply to S&L's
Again do research and re read what was said. Were major banks in trouble back then? NO they were not! Nothing and I mean nothing on the level of Bear Sterns was even remotely close to being in trouble as is the case now.
What would the implication be should a MAJOR bank go under now?
I hate to link to wikipedia but this will point you in the right direction, I suggest looking into it further though
Back in the 80's there were not the very large banks you see today like a Chase that has merged 4-5 times with other majors like Chemical. BOA was not the country wide bank you see today.
Back then you could consider a large regional / state bank like Republic Bank Dallas or Texas Commerce Houston would be considered a major bank. And those did have serious problems
4. Talking of unemployment rates based on the numbers issued by the government doesn't mean anything. It is like those who come here posting CPI and thinking it means something. It does not and here is why. Just as the CPI leaves out certain KEY factors so does the unemployment numbers issued by the govt. They are only counting those individuals who are currently seeking unemployment benefits and are looking for work. If you are no longer eligible for those benefits and not checking in with the govt to report employment status, they are not counted. The REAL numbers are generally MUCH higher than what is reported. So if they are saying its 5% you can bet your behind it is most likely 10% or some where around there. I also should add, that during the tech bubble they extended unemployment benefits back then so more were counted. This time they have not extended unemployment benefits so the numbers are skewed even more so.
Wow, everybody read this five times. I absolutely love hearing people in the newspaper and online say "We are not in a recession! Look at how the unemployment rate isn't that bad!"
Excuse me, but you cannot collect unemployment after a certain period of time. Once you're off the lists, you are not counted as part of the percentage, though you may still be unemployed.
And part two, which is even bigger: WHAT ARE ALL THESE NEW JOBS WE KEEP HEARING ABOUT? You know what they are? Minimum wage, service jobs or call-center jobs, NOT JOBS YOU CAN RAISE A FAMILY ON.
I sometimes feel like everybody misses this whole point entirely when talking about the economy. I lucked out and got a government job a few years back, and so I make decent money with benefits. Are all these new jobs that are supposed to help the economy anything worth writing home about? What does it matter if we added a call-center in a city, are those employees really gonna be there one or two years later? Can they retire on that?
As soon as we start getting back all the high-tech jobs that are overseas, or as soon as we get some manufacturing jobs that pay 18$ per hour, then you can actually hold those jobs up as a bright future for the common American worker. Call-centers? Taco Bell? Menial, minimum wage service jobs? Please, don't even bother counting them, unless your idea of living well is a one bedroom shack in the ghetto. America is sliding into a recession, and you cannot point to the unemployment rate or most new jobs as proof against this. For every new low-end service job, there are twenty lay-offs from Ford.
Banks were not allowed to merge until the 80s due to regulations. In Chicago, many of the large regionals are based out of Ohio as regulations were eased in Ohio before Illinois, allowing Key, Nat City, Fifth Third, and Bank One (now Chase) to come in and take over the market. Harris and LaSalle (now B of A) were owned by Harris Nesbeth and ABN Amero.
There were certainly bad banks that went out but many were bought out as an opportunity for their shareholders and officers to cash in.
The Continental Bank here in Chicago is a great example of one of the largest banks that went out.
Rakin,
What is your economics background?
I refuse to debate you regarding banking as I know way more than I should on this topic having worked in commercial banking in Ohio, Indiana, and Illinois.
It does not help my point but several of the money banks including my present employer nearly went broke in the 1990s as a result of real estate crash. Sure, the govt would have bailed us out but it would have been ugly.
Wild,
Please straighten these folks out regarding 5 percent unemployment now and 10 percent unemployment in the early 80s and how things aren't much better than they were then, regardless of what the govt reports say and how these published numbers are cooked. Things could actually get worse than the 80s, though we aren't quite there yet.
I will stick to educating folks about banking and deregulation if you help them with basic macro.
Things could actually get worse than the 80s, though we aren't quite there yet.
Through all of the elitism, that statement is basically what I was trying to say. You don't need a degree in economics to have common sense. I didn't say it isn't going to get that bad, I just said I think it's going to take a few years, I see a soft landing, and in regards to the OP, pissing and moaning isn't going solve any problems. Also, if they are cooking the books now, what makes you think it was any different in the 80s? I'm not naive enough to think that a low unemployment rate means everyone is employed. HOWEVER, if you have 10% of the population applying for/on unemployment benefits, that's a lot worse than having 5% of the population receiving benefits, no matter what the de jure definition of it is. Like I said, an unemployment rate makes an ok COMPARISON TOOL.
I don't know why we are dwelling so much on the literal definition of the unemployment rate anyway. The OP said that the unemployment rate is rising, and all I did was say that this isn't the first time it's happened and that it was higher through the 80s which nobody seems to even remember. What's the big deal? Anything untrue there? Why do I need to have a degree in economics to make a statement like that? I even said in my second post that I'm not the econ. whiz, and asked wild style to explain more.
Last edited by compelled to reply; 05-25-2008 at 11:53 PM..
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not all banks bought out were having trouble
