[malamute]

Originally Posted by magellan

I don't necessarily disagree with a lot of what you are saying, and our country is going through a transition/revolution as we haven't seen in about a century. But even intellectually, you have to agree that there are a lot of opportunities that will arise as many huge developing countries start to move into a more "American" lifestyle. When resources are taxed to the breaking point, new technologies emerge. We as a country, even as a state, contain a lot of thought leaders in these areas. It's too bad that we've so badly damaged our credit systems that are needed by businesses to grow, but the wildest and best ideas aren't supported by banks, they're nurtured by venture capitalists, those optimists who are always on the hunt for ways to make audacious gobs of money on bets that banks won't make.

Yes, the current party is coming to an end. But greed, ambition and ultra-competitiveness will replace the current party with a new one, trust me.

I'm getting more offers for easy loans and credit than ever before. All kinds of 0% and 1.9% balance transfer offers and offers for fixed rate loans I don't think I could ever pay off.

I don't really believe credit is any tighter.

[malamute]

That said -- I know from experience that there is a big difference between having $100 too little and $100 extra a month after meeting your minimum necessities. That is, if you cut back as far as you can, no cable, no dinners out, no internet, heat to 55 degrees at the highest and are still $100 below your bills, you're in trouble.

Anyone who is employed at an above average wage is not hurting unless they're big spenders. That's a whole lot of people, but obviously some people are having hard times.

[Indentured Servant]

Originally Posted by malamute

I'm getting more offers for easy loans and credit than ever before. All kinds of 0% and 1.9% balance transfer offers and offers for fixed rate loans I don't think I could ever pay off.

I don't really believe credit is any tighter.

I cannot say that I know what banks are doing....I only know what is reported. I do know that many banks are facing insolvency and that is why so much bailout money was directed at saving banks and why the FED keeps lowering the discount rate for inter-bank borrowing. There theoretically SHOULD be a credit crunch given the crisis....but given all the bailout money......the credit cruch should have eased somewhat, but people don't want to borrow in this climate. Furthermore, the banks are more strict on their lending standards. I guess it all depends on what type of loan one is looking for, what type of collateral they have, what is their credit rating, income to debt ratio.......and how secure the bank feels their employment sector is. You might not want to make a loan to a GM auto worker even if he has excellent credit, collateral, income to debt ratio and the like.....due to the uncertainty of the industry.

[Bhaalspawn]

Originally Posted by michigan83

Hey, the way I look at it - 91% of the people in this state are EMPLOYED. That sounds pretty good, right? That's an A- on a test.

Considering that economists consider an unemployment rate of 4-5% to virtually be zero, we are about 5% above the absolute minimum unemployment rate. So, in a way, we are around 5% unemployment. The other 5% wouldn't work if employers were knocking on their door.

At issue is what exactly those numbers mean and whether the official unemployment numbers are accurate. Is someone who works for 5 hours per week for poverty wages truly "employed" or is he, in actuality, unemployed? If the unemployment rate were 3% but 90% of the people worked for third world poverty wages, would you say that the economy were strong?

The "official" unemployment numbers dramatically undercount the amount of unemployment and don't count significant unemployment nor do they account for the issue of quality of employment. For example, people who would like to work but retire early since they can't find anything worthwhile are in actuality unemployed but wouldn't count as being unemployed. The same can be said for stay-at-home parents who would like to work but can't find anything worthwhile.

I'd like to see an employment measure that lists the percentages of the working-aged populace that earn at or above various income levels. What percentage earns over $100,000? $80,000? $60,000? $40,000? $30,000? $20,000? $15,000? $10,000? I'm sure that that sort of stat would be much more telling than our current, doctored up unemployment number.

Even bad times in the U.S.A. are pretty good. Things could suck a lot more than they do. I see an awful lot of people at the mall buying crap that they don't need.

It's possible that we are at the very beginning of an economic depression and that it hasn't even started yet. We'll get another chance to measure the amount of milk and honey in the glass a year or two from now.

I love this state.

I love my state...I hate its crappy economy and feckless state government.

[mostie]

A few years ago, I used to go to a place in Cali where I lived, WorkForce, to use their computers and fax out my resume, etc.- it was during a time that I was looking for work, and at that particular time, it literally took me almost 8 months to find a job- and I was hitting absolutely everything. I was talking one day with someone who worked there, and we started talking about the unemployment rate, and at that time, it was at a horribly huge 12%- he told me that the rate of 12% really wasn't even accurate, that the rate was taken from the amount of people on unemployment benefits- and it didn't count anyone else (can't recall if he said it also counted those who had only applied and weren't receiving benefits or not..)- he told me that the actual rate was closer to 20%----I think that's what's happening here, as well- those who are employed but working a few hours a week, those who have applied, and, for whatever reason, don't qualify for benefits, and those who haven't applied at all.

It's nice to have a good attitude about the way things are these days, but unfortunately for me, I'm a die-hard realist- and it's hard to see much to have a good attitude about- there are hardly any jobs where we live, and what little there is, is VERY part-time, and minimum wage- it's as if the employers are totally taking advantage of the situation they find themselves in, and they are able to hire someone with a bachelor's or master's to do a job that would take a HS grad- in other words, they are getting WAY more "bang for their buck"- it's all well and good to think about moving to somewhere where the employment rate is a lot better, and where there are jobs- unfortunately, we can't afford to relocate- it costs to rent a place, and to actually GET somewhere else- especially if you don't know anyone in that particular area- to make matters worse, the only other place we have family, is in Cali- and they are almost in as bad shape as WE are, lol~

[magellan]

Originally Posted by Indentured Servant

I cannot say that I know what banks are doing....I only know what is reported. I do know that many banks are facing insolvency and that is why so much bailout money was directed at saving banks and why the FED keeps lowering the discount rate for inter-bank borrowing. There theoretically SHOULD be a credit crunch given the crisis....but given all the bailout money......the credit cruch should have eased somewhat, but people don't want to borrow in this climate. Furthermore, the banks are more strict on their lending standards. I guess it all depends on what type of loan one is looking for, what type of collateral they have, what is their credit rating, income to debt ratio.......and how secure the bank feels their employment sector is. You might not want to make a loan to a GM auto worker even if he has excellent credit, collateral, income to debt ratio and the like.....due to the uncertainty of the industry.

A large group of credit unions have now set up programs with the Big 3 for new auto loan programs with rebates. Credit unions are doing pretty well actually. Michigan State University Credit Union (EL) and Lake Michigan Credit Union (GR) are doing phenomenally actually. If people with good credit want a car loan, they are there and there are great deals to be had.

[malamute]

Originally Posted by magellan

A large group of credit unions have now set up programs with the Big 3 for new auto loan programs with rebates. Credit unions are doing pretty well actually. Michigan State University Credit Union (EL) and Lake Michigan Credit Union (GR) are doing phenomenally actually. If people with good credit want a car loan, they are there and there are great deals to be had.

In the downturn, Michigan doesn't rank so poorly | Freep.com | Detroit Free Press (http://www.freep.com/article/20081230/OPINION01/812300353 - broken link)

When you lead the nation in unemployment, the assumption is that no one could be worse off. Not so, according to an analysis by the Kaiser Family Foundation, which ranks Michigan only 16th among the 50 states in economic distress.

[Indentured Servant]

BhaalSpawn, You hit the nail on the head. Moreover, it’s not simply an issue of “accuracy” but also “consistency”. The metrics for calculating rates of unemployment and employment are radically different now than back in the Depression of the 30’s. It’s like trying to monitor your weight when the weight scales calibration is constantly changing, hence, the scale might show your weight as being constant, but you know your clothes are not fitting the same. Something is not reconciling. The same is true for most government statistics, with the most egregious and nefarious misrepresentation being the governments reported rate of inflation, which it has been understating for the last 15 years or more (The corollary of understated inflation is overstated economic [GDP] growth rates).

It’s important to note that the government usually keeps a series of statistics, which represent different “views” of the phenomenon. For example, the government releases a “core” (different from aggregate inflation because it excludes food and oil) rate of inflation. Thus is true for most statistics reported. The thing to note is that the “official” numbers released by the government are ALWAYS the most favorable number in the series. For example, the government excludes from its “official” unemployment rate those people who want a job but have not looked in the past few months because they have become to discouraged (hence…discouraged worker label) or people who are working part time but want to work full time….but cannot find full time work. Thus, the most recent 6.7 national unemployment rate, for the month of December, also was 12.5 percent when discouraged and part timers who could not find full time employment were added it. Of course, government and politicians have a vested interest in always reporting the most favorable number.

This is why I warn people that things are a lot worse than the government is letting people know. There is the physical economy and the psychological economy and they interact and react to one and other to form the general economy. The physical economy is simply the numbers, the accounting, if you will. The psychological economy is the confidence of the people in the system or direction of the government and or physical economy. The psychological economy is really the key to the performance of the physical economy. If people are not confident in the future, they will minimize their consumption which reduces sales and the bottom line of the physical economy, thereby self reinforcing their pessimism about the future as the change in their consumptive behavior, trigger by their pessimism, reduces aggregate demand to the degree that it worsens the physical economy. This is why the government reports the most favorable statistics, in addition to changing the way they calculate statistics, all in an attempt to keep the public as optimistic as possible….so they will keep spending.

The truth hurts. If the government came out with the TRUTH, it would be like shouting “FIRE” in a crowded theater. The economy would collapse in a month (that’s a very conservative estimate) and the country would disintegrate into anarchy. The government is trying to prop up the psychological economy by bailing out the physical economy, as the domino effect of increased major business failures will scare the heck out of consumers about the direction things are going and expedite a downward plunge in the economy. Normally these businesses would be allowed to fail, if not for the avalanche ripe condition of our current economy. If a few large companies start tumbling in this environment, it for sure will create an avalanche that will bury the village below. However, the government cannot ensure the solvency of the physical economy whet it is not solvent itself, but rather, 60 trillion in debt, already, by standard business accounting. Essentially the government is trying to restore confidence by having the blind lead the blind. The only people falling for it are those who do not realize that the government is blind.

[London Girl]

Originally Posted by Driller1

I have been in a third world country many times. One night in Tegucigalpa, Honduras we could not buy milk. I had money, there just WAS no milk. This is the capital city!!! To be poor in the US is the dream of many.

Well said

Easy to forget to count our blessings

[Cliffie]

In a similar vein, here's some good advice all the way from Turkey. The author makes conditions in Turkey sound like Michigan if things were REALLY bad:

Daily News - Why are we always pessimistic?