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Old 03-12-2008, 08:42 AM
 
116 posts, read 413,430 times
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If you Google Recession or Economic Slow Down you will get thousands of hits. It seems like everyone who wants to get on TV will spread their doom and gloom stories and tell us we are heading into a deep economic hole. Of course someone who would tell us things are doing great would not get on TV because it would be not very interesting. That being said I hear from many people in the business community that things have really fallen very fast in the last few months. They say the perfect economic storm has hit with huge real estate, energy, inflation and credit problems strangling our economy and we will soon go into a deep economic recession with problems more severe than the Reagan Recession in the early 1980s.Have you seen signs of a slowing economy in your hometown or business? How bad will it get?
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Old 03-12-2008, 09:46 AM
 
Location: Sugar Grove, IL
3,131 posts, read 10,877,534 times
Reputation: 1619
in our area, the biggest slow down is in new construction and slow housing sales. when you go out, you still see lots of people eating out and shopping. I think the media makes things worse. i was wondering if we could get them to "experiment" to see their real effect by having them only say positive things. I think people should start to skip the news and focus on what is going on around them. The statistics for home values etc in this area are not drastically changed. I do think that this is a correction of overly-inflated housing values.
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Old 03-12-2008, 10:27 AM
 
Location: hinesburg, vt
1,574 posts, read 4,558,376 times
Reputation: 400
The economy has its troubles, but the media and the hoards of "business" experts fuel the feeding frenzy of bad news. All this creates quite a bit of extra useless anxiety. The focus of the stories headlines the bad news often without explaining that the stats and figures apply to select regions or industries. I know I have taken a hit and this recession will set back my plans time wise, but it's pointless to dwell on doom and gloom.
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Old 03-12-2008, 12:31 PM
 
Location: Dallas Texas
163 posts, read 875,273 times
Reputation: 144
No, it's not as bad as they say it is....yet. But it will be soon, and it'll be much worse than what you're hearing about.

Just think about it; the majority of Americans are living off of credit. They have no money in savings, and are in debt up to their eyeballs. They spend more than they make, and even if they stop overspending now, they still have tens of thousands of dollars in credit card debt, etc...

On top of that, they have no money (or a far inadequate amount) saved for retirement. Pensions and other "guaranteed retirement income" are a thing of the past. It's now entirely up to the individual to save for their own retirement, and the majority of people are not.

Finally, it's not just our citizens who are living off borrowed money...it's our government too. The national debt is going up faster than ever before, while the value of the dollar is going lower than ever before. All this is going to lead to massive inflation and a recession like we've never seen before.

In short, our entire economy is a house of cards, and there's simply no way it can keep going like it is. The market will have to correct itself at some point. When that point comes, our credit based economy will crumble, and when it does, watch out!

My prediction is that within the next couple years, several major banks will go bankrupt, the dollar will become crap, inflation will skyrocket, and we will officially end the "era of easy credit" in the United States. We'll be in a recession for a while, but eventually the economy will correct itself again, and it'll all be OK again.

But going forward, credit will be like it was in 1980. Only the wealthy will be able to get a credit card or a mortgage. Or rather I should say, only people who have a proven record of financial responsibility and a reasonable debt-to-income ratio. Interest rates will probably be sky high too, at least until the economy gets back on track.
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Old 03-12-2008, 01:53 PM
 
48,508 posts, read 88,877,336 times
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Overall yes. But in some areas it is still good but the falling dollars value has positives(export) and negative(buying power).Also the market can effect those with retirement 410K type accounts.I don't see inflation getting near as bad as the 70's recession at least yet.There are strong parts of the economy also compared to both the 70's and 80's recession.
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Old 03-12-2008, 02:15 PM
 
2,775 posts, read 3,277,451 times
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Depending upon what I read, I believe the economy can swing two ways right now - "not so bad" and "very bad." I am hopeful that things appear worse than they are however, and would like to think that the media is just whipping up a frenzy to sell their news.

The reasons for major concern are founded upon the notion that the US is not just facing one problem right now, but several all at once. It is the perfect storm scenario which is hard to ignore or deny.
#1 - major banking institutions have lent too much money to people who cannot pay the loans back
#2 - blue collar and white collar jobs are disappearing due to offshore outsourcing
#3 - the US Government has way overspent and the budget deficit is spiraling out of control
#4 - the US Government continues to print too much money causing inflation
#5 - the US trade imbalance with other countries is unhealthy and unsustainable
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Old 03-12-2008, 02:32 PM
 
221 posts, read 939,671 times
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Default Is The Economy As Bad As The Media Makes It Out To Be

DEATH is not as bad as the media makes it out to be.

When did you ever have the ability to spend, spend, spend, without a care in the world? When did you ever not have to buy things on sale, or cut back? The price of gas is annoying, as is the fallout from that (higher prices for goods everywhere), but, really, who was charging trips to Europe every month anyways? A family's budget was always tight. Bills were always dreaded. I would imagine that absolutely having to own an SUV, 52 in high def tv, massive media center, designer clothes.....would rack up some serious debt. If you must cut back for awhile- do it. Geez, don't we all have to do this from time to time?

Again, nothing is as bad as the media makes it out to be. I'm not saying everyone is living on easy street, but, goodness, Chicken Little news people, calm down. Not everything is a crisis.
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Old 03-12-2008, 02:53 PM
 
Location: Boca Raton, FL
5,819 posts, read 9,474,198 times
Reputation: 7833
Smile Back to Basics

Let's go back there. As a honest mortgage broker, it's a relief in a way.

I am very stressed about people who cannot refi b/c of value and we need to do something about that; these are good people who can make the payment but if the value is not there may walk. That will add to the problem already there.
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Old 03-12-2008, 03:10 PM
 
Location: Chino, CA
1,458 posts, read 3,063,505 times
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I tend to agree that the News over exaggerates and Investors tend to enjoy going with the band wagon. Seems like every news story covers the same things 5X over.

Of course the mortgage debt issues persist, banks have a credit liquidity problem, and that inflation is still a key issue, but I think since these issues have been prevalent and has been going on for over 6 months to a year now, that some of the efforts (ie, freeze rates, interest rate cuts, stimulus plan, tightening loan standards, layoffs and belt tightening) should help mitigate or ease the pain. Exmp. Like reducing someone's mortgage rates reduces 100s per month by refinancing, businesses should also feel the easing on their credit lines.

I think a lot of the market currently is due to speculation, those "animal spirits", and the tremendous lack of confidence in the USA. Does the media influence this? I believe so. People are stunned and are in a waiting game. At the end "time" is the only currency that matters.

Inflation?
Isn't a slowing economy suppose to give deflationary pressures? Isn't higher inventory levels suppose to reduce prices (there is a gas surplus from what I hear)? House prices are going down... and with less people shopping shouldn't other prices go down too (supply vs. demand)? Even if the Fed injects more money into the system.

Credit Crunch?
I think there's still a lot of capital going around. Look at how fast and high the commodities are going up. Everybody and their dog is trying to invest in OIL and Gold? And the trade deficit will balance itself more as Imports become more expensive and exports become cheaper to other countries. We need more FDI (foreign direct investments - hey! use your higher valued currency), and our own companies to realize that it's actually getting cheaper to do business and grow in America.

Deficit?
The main problem I see is that our current governing Administration doesn't seem to have it's priorities straight. We're spending exhorbant amounts on Wars (please don't say we're going to fight Iran now too?), cutting back on Education, and investing largely in a Technology (Ethanol) that isn't truly renewable (without raising food prices, etc.).

So yea, I think things are kinda overblown. Once we regain confidence, sit through house inventories dwindling down, I think all this chatter will only make us stronger in the long run.

-chuck22b

Last edited by chuck22b; 03-12-2008 at 03:19 PM..
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Old 03-12-2008, 03:14 PM
 
Location: Los Angeles, Ca
2,884 posts, read 5,414,046 times
Reputation: 2748
I think things will get much worst than they are down the line (at least in the next 5-10 years).

The media does a terrible job of explaining things in a common sense way, everything is always overly dramatized, overly complicated.

In sports, people see whats going on in front of them. They know if the Lakers are doing well or if some team is terrible. They play well, or attendance is up. You don't need "experts" to explain it to you.

Business, economic reporting isn't like that at all.

-Too much money will cause inflation. It'd be like playing monopoly, and the banker keeps adding more money to the board. Of course prices will go up. Anyone can understand that. The media makes inflation so mysterious.

-An obvious trade imbalance that can't last. I shake my head when I hear people say that our trade deficit can continue, that it's a sign of American strength, people have faith in America.

You basically have the rest of the world working 12 hour, 14 hour days (i.e. Chinese working very hard) making real goods (Toyotas, TV sets, French Wine), they send us more goods than we send them, and they take dollars in return. Dollars we can print at any time. How long can that last?

Would you accept that game if you were working 14 hours a day making Toyotas? One of the problems with how they report on the economy is its all so US centric, you never hear what foreigners are thinking or what they're doing.

Definitely this era of easy credit is going to end at some point. Credit card offers for everyone, instant loans.

Retail will contract in a huge way. Alot of shuttered malls, outlet malls, lots of vacant retail space.

The media likes to report on things in isolation, to ramp up the fear factor. Like the economy in the 70's was a mess, but people still went to baseball games, they danced, they went to the movies. There were great movies then, fashion. We'll live through this, life will go on.
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