Dear recession:

[sahd2one]

I think life is what you make it. Yes, sometimes people get a bad break through no fault of their own, but more often, good decisions are rewarded.

Restaurants and stores in my area are chock full of people. I don't think the economy is as bad IN MY AREA as the media seems to be portraying.

The last book I just finished was The Success Principles, the very first chapter talks about E+R=O. I fully believe that you can change your outcome by your own reaction to an event. I think you can either blame everyone and their mother for your outcome in life or you can take personal responsibility for your reaction to those events through their own fault or through no fault of their own.

Can it all go away tomorrow? Sure, but as long as I have my health and my family, the sun is still going to rise tomorrow. I see this correction in the market as a positive thing even if it is painful for many. I think pain makes us all appreciate the joy in life, but that is just me.

 

[Colleen27]

I support legislation to end the basis of interest rates and insurances rates and employment based on credit scores. If you saw mine, you would think I have zero credit...it is very low.

I'm with you on that one. My credit score is pathetic, not because of negative information but because we don't use credit. Our mortgage is our only debt, and my name isn't even on it because I had no income and a marginal credit score when we bought the house, so our broker felt putting me on the application could actually hurt our chances of approval. My entire credit record is a student loan and a car loan from when I was 18, both paid off at 20 when I got my first professional job. A decade of no information really lowers that all-important score, and it sucks to know I'm likely to be penalized when buying insurance or applying for a job because I don't buy into credit as a way of life.

 

[jodifla]

I suspect that if we were having this conversation face-to-face, we'd be agreeing more than disagreeing, but it is hard to gauge tone in online postings and some of your comments did come across as gloating.

I know not every one is having a hard time. Even here, where things really do suck (Detroit area, Michigan), there are those who are in a position to make the most of the situation.

We are feeling the downturn, in that DH's business is slow and we're chipping away at our savings to make ends meet some months, but we're not in dire straits. Even in the worst economy, people need their leaking roof or leaky pipes repaired, so while business is slow and we're patching together a living out of small jobs that we'd have passed on a year or two ago, we know that there will always be *some* work.

In fact, we're among the most fortunate - we have savings, and we have options. We're looking at buying a larger house while the market is weak and prices are low, because we can afford to pay cash. In this market, rent on a 3 bedroom home is considerably more than our mortgage payment, so we'll rent out our current house until the market improves enough that we're willing to sell. It'll be a fixer-upper for sure, but with a DH in construction who isn't working as much as he'd like, we've got the skill and the time to handle that.

I'm probably a bit over-sensitive about optimism in the face of current conditions, though. I don't talk about our house hunt or our plans IRL, because it feels like it would be insensitive at best to talk about buying a foreclosure to improve our long-term position when so many of our friends are close to losing their homes. Sure, there's an upside to a down economy, but that's no consolation to the people who don't know where their families will be living a few months from now, you know?

I spend most of my time in the Detroit area and in South Florida. Both areas are hurting.

There's a lot of fear in MI because of the car companies' precarious situation. Those companies combining or going out of businesses potentially mean the lost of tens of thousands of jobs that will ripple through and cripple the economy in many states.

It's definitely not impossible for MI to have the same unemployment rates of the Great Depression if the car companies fail.

And in SoFla, everyone banked on their house being worth a half-million. so they're reeling as well.

 

[sahd2one]

I know not every one is having a hard time. Even here, where things really do suck (Detroit area, Michigan), there are those who are in a position to make the most of the situation.

Well didn't Roger and Me come out nine years ago or so? Wouldn't there be a point where a person has to see it is not getting better, time to find some place where it is. We could get into a discussion about the politics of the local government, and lay blame everywhere and anywhere, but this is not the thread for that.

We are feeling the downturn, in that DH's business is slow and we're chipping away at our savings to make ends meet some months, but we're not in dire straits. Even in the worst economy, people need their leaking roof or leaky pipes repaired, so while business is slow and we're patching together a living out of small jobs that we'd have passed on a year or two ago, we know that there will always be *some* work.

What a fantastic attitude.

I'm probably a bit over-sensitive about optimism in the face of current conditions, though. I don't talk about our house hunt or our plans IRL, because it feels like it would be insensitive at best to talk about buying a foreclosure to improve our long-term position when so many of our friends are close to losing their homes. Sure, there's an upside to a down economy, but that's no consolation to the people who don't know where their families will be living a few months from now, you know?

But let's apply that scenario to someone who has received a donor organ? One person or family receives a positive outcome while another person or family has experienced a tragedy? Should we stop organ donations because they might be insensitive to the tragedy of others?

 

[cabanafrau]

I do say I have to agree w/ sahd2one . . . there is very little of value to be gleaned from 99-percent of the "news" our media reports on.

However, if we're then going to base our opinions largely on anecdotal accounts of what we see in the shopping malls, restaurants, etc. around us, I'll have to say the sky is falling. It probably doesn't take Al Roker to point out that I live in Michigan.

I'm also old enough to remember what it was like in Michigan in the late 70's/early 80's. Times were tough. People lost their jobs or were laid off long enough to believe their jobs were gone forever. Things eventually got better. FYI, I can state as a first-hand eyewitness & participant, Michigan's economy hasn't been under-performing consistently for decades -- despite any anecdotal evidence to the contrary on this thread.

Anyway you slice it in the real world (where flesh & blood human beings live) times in Michigan have never been this challenging since the Depression. Dredge up all the statistics & figures you like to empirically challenge the truth of this statement. I prefer my facts straight, preferably those I can see with my own two eyes. I'll have to save my rose-colored glasses for later when I have a minute to relax, dream & hope for better days to come soon. Right now I think my time is better spent working hard to keep what we have & conserving my creative energies for helping brainstorm solutions to the issues & problems we all face.

Sure would be nice if everyone decided to put their backs & brains into solving some of these problems rather than stand idly by, feeling protected enough to stoop to denying the misery of countless others. Oh, that's right, got to get back to work. I'll have to save that daydream for when I have time to put on my rose-colored glasses again.

TFI since I won't be back to the thread, my family suffered mightily in the late 70's/early 80's. We are amongst the lucky & blessed few currently. We are tremendously grateful for that fact, whilst constantly mindful of those who aren't so lucky right now & the fact it can happen to anyone at anytime, including us. Don't ignore what's going on, look for ways you can help turn things around.

 

[sahd2one]

There's a lot of fear in MI because of the car companies' precarious situation. Those companies combining or going out of businesses potentially mean the lost of tens of thousands of jobs that will ripple through and cripple the economy in many states.

It's definitely not impossible for MI to have the same unemployment rates of the Great Depression if the car companies fail.

Well they could follow the lessons of Iaccoca who took a loan from the government and re-paid it in just over two years. Or they could take lessons from Honda:

http://www.tennessean.com/apps/pbcs.dll/article?AID=/20080925/BUSINESS01/809250324

And in SoFla, everyone banked on their house being worth a half-million. so they're reeling as well.

I am not sure where folks had this change of heart where a house became a speculation instead of a place to live. As with any gamble, sometimes you crap out. That is the harsh reality.

 

[Colleen27]

Well didn't Roger and Me come out nine years ago or so? Wouldn't there be a point where a person has to see it is not getting better, time to find some place where it is. We could get into a discussion about the politics of the local government, and lay blame everywhere and anywhere, but this is not the thread for that.

Decisions about where to live are rarely made on economic conditions alone, though. Many people have gone, but many cannot or will not. We've seen it getting worse for years, but family will probably always keep us here. Besides, I do love this area. I'm a born-and-raised Detroiter who can't imagine life anywhere else. So we'll get by as best we can, with DH in a recession-proof field and me freelancing for clients all over the country, and we'll do what we can to improve things here rather than moving on.

But let's apply that scenario to someone who has received a donor organ? One person or family receives a positive outcome while another person or family has experienced a tragedy? Should we stop organ donations because they might be insensitive to the tragedy of others?

It isn't the doing that makes me uncomfortable; it is the talking about it with those who are losing. I suspect that I'd feel the same way in a donor situation - grateful for the positive outcome, but uncomfortable sharing the joy of that outcome with those who lost. We still go about our lives and do the things that are best for our family, but we find ourselves doing it a little more quietly our of sensitivity towards our many friends who are hurting so badly.

 

[sahd2one]

But I see examples of people leaving their comfort zone and family for a better life elsewhere. Just look at our immigrant population, or throughout our history?

The east was flooded with advertisements in the 1800's about how life was so much better in the west and people left in droves. Those ads left out a lot of the negative things though, yet we did thrive.

I am in a business that sells to people purely with discretionary income and while it is slow, it is still profitable for me. I am just tightening up how I market and how I spend, but I am still spending and so are my clients. I see opportunity to poised for success when everyone else is cutting back. Sometimes you truly have to zig when everyone else is zagging!

I wonder why some people who are experiencing hardships have not started their own thread where they can share their hardships with others. It almost seems like those of us doing well are not "allowed" to share it with others. There will be people who will "make their last post" to a thread and then continue with their little comments in other threads. Well those people have not made their last word to a thread, they have just continued it elsewhere.

 

[C.Ann]

The Dow Jones Industrial Average is 30 stocks...it's down 37% over the last year. The S&P 500 is a much better indicator....it's down 41%. What's your point? The international markets have been positively crushed. So what funds are you in again that are only down 12%-15%? Seriously, I'd love to know.

But to say that the recession isn't affecting you....and that your portfolio is only down 12-15% in the types of accounts you listed. Well, either you're not keeping up with your statements or you're not being honest with yourself, or us for that matter..

---------------------------

And I believe you just hit the nail right on the head.. Particularly with your last sentence..

(And I wouldn't hold my breath waiting for a "straight" answer.. You will likely get a lot of vague, wishy-washy, mumbo jumbo.. )

 

[dvcgirl]

---------------------------

And I believe you just hit the nail right on the head.. Particularly with your last sentence..

(And I wouldn't hold my breath waiting for a "straight" answer.. You will likely get a lot of vague, wishy-washy, mumbo jumbo.. )

Yeah, I'm not holding my breath for an answer. I would just love to know how he's down about 12-15% on the year when the Dow opened on September 29th at 11,139 and closed on October 27th at 8,175. So we're down 26% for the *month*, but the OP is down 12-15% for the year. A pretty amazing feat .

And like I said, I understand the OPs overall attitude (even if I don't understand his math). The news can be a real downer, but that doesn't mean that it isn't happening. I've said before....DH and I got nervous a year ago....and so we moved to the cash option within our 401Ks. And I have no debt, and so we're in good shape. I posted about our decision to get out on the BB a year ago.....because it was something that neither of us had ever done in our nearly 20 years of investing.

And so while we were lucky in anticipating the downturn, we're actually smart enough to know that we aren't getting off scott free here. The house that we bought 18 months ago is probably down at least 10% (and we're in a very stable real estate area compared to many others). Still, that's 50 grand that is gone. And even though we're not in the equity markets now, we'll need to find the courage at some point to get back in. And the days of just investing and forgetting about it....that we'll get 12% returns year over year. Gotta tell you, I'm wondering if those days are over.

I also recognize that things change *very* quickly with a job loss, and we're going to see a lot more of those. DH lost his job in 2003, and while he was only unemployed for a short period of time, he did take a significant paycut at the time to get back in the work force.

And so we continue to live beneath our means and are even adding to the emergency fund. I just shake my head at this idea floated in conservative talk shows that this recession is somehow "not happening", when the fun is just getting started.

 

[NotUrsula]

Yeah, I'm not holding my breath for an answer. I would just love to know how he's down about 12-15% on the year when the Dow opened on September 29th at 11,139 and closed on October 27th at 8,175. So we're down 26% for the *month*, but the OP is down 12-15% for the year. A pretty amazing feat .

Presumably he owns a lot of Campbell's Soup.

 

[C.Ann]

Yeah, I'm not holding my breath for an answer. I would just love to know how he's down about 12-15% on the year when the Dow opened on September 29th at 11,139 and closed on October 27th at 8,175. So we're down 26% for the *month*, but the OP is down 12-15% for the year. A pretty amazing feat .

And like I said, I understand the OPs overall attitude (even if I don't understand his math). The news can be a real downer, but that doesn't mean that it isn't happening. I've said before....DH and I got nervous a year ago....

-----------------------------

For me it was last January - when I really started to smell trouble brewing.. At that time, things were no where near what they are now, but my "gut" told me to pay attention and plan ahead - just in case.. I'm glad I listened - and I will continue to "follow my gut feelings" for as long as I feel the need..

I am perfectly capable (as are you) of "hoping for the best" while also being smart enough to "plan for the worst"..

Keep the educated info coming! (And please don't limit it to just the BB.. Apparently people are in need of it here on the CB too..)

 

[kydisneyfans]

My local community paper has an article today regarding the perceived recession and the lack of it in my neck of the woods.

Housing sales dropped 4% in Sept 2008 from Sept 2007, but the mean price per house sold actually increased 11% year to year. Wow!! New housing permits are also on a higher pace than 2007.

Business construction is at the highest rate ever according to our chamber president, with several businesses moving to new locations as sales are up and they need more space.

The peers at the company I work for consider the market I cover "recession proof" as most jobs are government, farming or medical related. Between the UK Hospital system, Central Baptist, and St joseph, there are 1.4 billion dollars in construction going on in the Bluegrass region right now. We have the most efficient Toyota plant on earth, they are moving people from other plants here to prevent layoffs. My sales numbers are growing weekly right now, it was VERY slow in the summer, but the growth the past 4-6 weeks is remarkable. A new tech school had ground broken this week.

Keeneland (horse racing) was 136 people short of breaking attendance records in the fall meet out of 200,000+ in attendance, although betting was down 7% year to year. The fall horse sale was well below last years numbers.

There continue to be weak signs that something may be in the cards here, but this is nothing like the media wants to portray right now.

 

[sahd2one]

My local community paper has an article today regarding the perceived recession and the lack of it in my neck of the woods.

Housing sales dropped 4% in Sept 2008 from Sept 2007, but the mean price per house sold actually increased 11% year to year. Wow!! New housing permits are also on a higher pace than 2007.

Business construction is at the highest rate ever according to our chamber president, with several businesses moving to new locations as sales are up and they need more space.

The peers at the company I work for consider the market I cover "recession proof" as most jobs are government, farming or medical related. Between the UK Hospital system, Central Baptist, and St joseph, there are 1.4 billion dollars in construction going on in the Bluegrass region right now. We have the most efficient Toyota plant on earth, they are moving people from other plants here to prevent layoffs. My sales numbers are growing weekly right now, it was VERY slow in the summer, but the growth the past 4-6 weeks is remarkable. A new tech school had ground broken this week.

Keeneland (horse racing) was 136 people short of breaking attendance records in the fall meet out of 200,000+ in attendance, although betting was down 7% year to year. The fall horse sale was well below last years numbers.

There continue to be weak signs that something may be in the cards here, but this is nothing like the media wants to portray right now.

Yep when you see a 12-15% drop in your retirement savings, you take notice, but you know you are in no way or shape affected by that drop unless you were going to cash in those savings. It does help to be well diversified and not tied in with the Dow. Through dollar cost averaging you are able to buy more shares at a lesser price. Like clockwork, we put in the same amount month after month after month. My gains will not keep pace when the market recovers, but I am reducing my risk by putting in a little at a time instead of all at once.

Same with a housing decrease. You are only affected if you were going to have to sell or short sale or face foreclosure. If you are not moving and have no plans to, there is ZERO effect you feel of a recession!

Those who think they are educated in these matters are just bandying about figures and trying to scare people that things are worse than they really are, all they are really are just ignorant and engaging in fear mongering which brings down everyone's confidence.

I am glad that you and others have shared posts that buck the trend! Keep it up!

 

[dvcgirl]

Yep when you see a 12-15% drop in your retirement savings, you take notice, but you know you are in no way or shape affected by that drop unless you were going to cash in those savings. Same with a housing decrease. You are only affected if you were going to have to sell or short sale or face foreclosure. If you are not moving and have no plans to, there is ZERO effect you feel of a recession!

Those who think they are educated in these matters are just bandying about figures and trying to scare people that things are worse than they really are, all they are really are just ignorant and engaging in fear mongering which brings down everyone's confidence.

I am glad that you and others have shared posts that buck the trend! Keep it up!

LOL! You just can't answer the question can you? Bandying about figures? You mean....actual returns. I hate those pesky numbers.

Seriously, have you opened your 401K statements lately or checked your funds on-line? Because you're down a heck of a lot more than you think you are....or did you just make those numbers up? Hmmmmmm........I think that the recession *is* affecting you!! Denial ain't a river in Egypt you know .

Please share with us all the name of targeted retirement fund that is down 15%. That's a simple enough question isn't it?

 

[C.Ann]

LOL! You just can't answer the question can you? Bandying about figures? You mean....actual returns. I hate those pesky numbers.

Seriously, have you opened your 401K statements lately or checked your funds on-line? Because you're down a heck of a lot more than you think you are....or did you just make those numbers up? Hmmmmmm........I think that the recession *is* affecting you!! Denial ain't a river in Egypt you know .

Please share with us all the name of targeted retirement fund that is down 15%. That's a simple enough question isn't it?

-----------------

Did I call it or what?

 

[ntsammy5]

My 401k is up 2.1 % for the last 12 months, excluding all contributions - I switched to money markets in July 2007 - I could see the credit swap market becoming way too heated - I never in a million years thought the market would drop as much as it has though.

No matter where you are in the country, even bad spots like Buffalo, there are still positive signs as long as you personally are not without a job or other source of income. This recession has barely started though.

 

[sahd2one]

There have been 18 bear markets (defined as a 20% drop) since the modern market era started some 80 years ago. The average bear market decline has been 36%. Since the Great Depression, the market has fallen by 50% or more in 4 individual instances. Remember the last time that happened? It was in 2000-2002! That was just 6 years ago. So it's good to keep perspective.

Again if the average 401(k) is down 20%, how can we only be down 12-15%? In a word, dollar cost averaging. And not being invested in funds tied to the DOW!

Live it, Learn it, Love it!

 

[dvcgirl]

My 401k is up 2.1 % for the last 12 months, excluding all contributions - I switched to money markets in July 2007 - I could see the credit swap market becoming way too heated - I never in a million years thought the market would drop as much as it has though.

No matter where you are in the country, even bad spots like Buffalo, there are still positive signs as long as you personally are not without a job or other source of income. This recession has barely started though.

Yeah, I'm up about 2-3% on the year....also in the money market option.

But hey, the market is up nearly 900 points today! Wonder if Obama will get credit for that....well, it was his fault that the markets were tanking.

 

[ntsammy5]

This manic market really has me worried - 500-1000 point spreads are not good!