So are we in a depression yet?

[punkin]

Unemployment numbers are in.

After yesterday's further unwinding of the credit markets and these numbers, I would say, yes.

 

[dvcgirl]

Not a depression, but certainly a recession. We've had two straight quarters with jobs lost....over the last 40 years whenever this has happened we've experienced a recession.

But I'll try to be positive here . During the Great Depression, unemployment as at 25%, we're still slightly below 5%. So even when things were *really* bad in the 1930s, a full 3/4 of the population was still working. The sun will still rise each day.

What we do have is a recession, and I think it will be nasty because of the inflation factor. The idea that we have serious deflation of assets (housing/stocks) and inflation in commodities will make us poorer and we'll be spending a whole lot more for the things we buy.

 

[punkin]

Not a depression, but certainly a recession. We've had two straight quarters with jobs lost....over the last 40 years whenever this has happened we've experienced a recession.

But I'll try to be positive here . During the Great Depression, unemployment as at 25%, we're still slightly below 5%. So even when things were *really* bad in the 1930s, a full 3/4 of the population was still working. The sun will still rise each day.

What we do have is a recession, and I think it will be nasty because of the inflation factor. The idea that we have serious deflation of assets (housing/stocks) and inflation in commodities will make us poorer and we'll be spending a whole lot more for the things we buy.

You are so cheery. Let's sing a rousing chorus of "Tomorrow"

OK, recession then, not depression. I really never understood the difference between the two.

 

[happygirl]

I find dvcgirl very realistic, I personally like that better then people saying nothing wrong and blowing fake sunshine up people backsides

 

[theLavers]

We're probably in recession, but things will probably pick up the second half of 2008, so don't despair. The media coverage can get to you, but in the grand scheme of things, even when things are bad economically in the U.S., we're still better off financially than the vast majority of the world.

MaryPat

Who's never had to watch any of her four children starve to death, thank God!

 

[punkin]

MaryPat

Who's never had to watch any of her four children starve to death, thank God!

Good God-I don't think it will come to that.

But, I think all of 2008 is shot, we may start climbing out of this by 2009 (maybe).

 

[dvcgirl]

You are so cheery. Let's sing a rousing chorus of "Tomorrow"

OK, recession then, not depression. I really never understood the difference between the two.

I think GDP has to decline by 10% for it to be a depression. And if that happens employment just tanks.

What we have are the simultaneous deflation of two huge asset bubbles (credit and housing). And because credit and housing are so intertwined these days, as one spirals it will drag the other down with it. Because it's all tied to housing, we don't bottom until housing bottoms. And then we'll grow at a very tepid rate because the days of easy credit are going to be on the back burner for quite some time.

We continue to add to our cash position waiting for the time to put our toe back in the water.....my conclusion. Not. Yet.

What is interesting to watch now are those major investors and hedge funds who are getting crushed when they didn't even have any "toxic" CDOs on their books. They were simply *over-leveraged*.

All you Dave Ramsey fans out there. You know how he always talks about how he went bankrupt? He bought a zillion houses with very little money down. For *whatever* reason, his bank got nervous and called his loans and he was toast. That's what is happening now. A lot of banks are nervous and short on cash, so they're sending out margin calls (which is essentially a demand for more capital from the investor) to investors.

These investors don't have the cash to cover the investments so they're being forced to sell assets at fire sale prices. Prime mortgage portfolios that are AAA rated and backed by Fannie Mae were being sold yesterday for 70 cents on the dollar. This is why Cash is King . Those with cash are on the sidelines scooping up these assets. That toxic CDO crap can't even be sold....that's totally worthless. And so when it's all said and done a whole lot of people out there, from the homeowner to the hedge fund owner.....many will be worth a whole lot less.

 

[dvcgirl]

We're probably in recession, but things will probably pick up the second half of 2008, so don't despair. The media coverage can get to you, but in the grand scheme of things, even when things are bad economically in the U.S., we're still better off financially than the vast majority of the world.

MaryPat

Who's never had to watch any of her four children starve to death, thank God!

Well, and you have a great point. I mean, our poorest here in the U.S are wealthy compared to most of the third world. So....it's good to put things in perspective.

I'm not so sure about the second half of this year though......we may be flat for awhile after this one. Remember 6-8% of personal consumption spending in this nation has come from home equity withdrawals. That's not coming back any time soon....

 

[disynut]

Well, I'm sure depressed about it! Especially since we decided to cancel our little "extra" spring break Disney trip and pay off debt instead. We had the money saved for our trip, but owed a little on credit cards--not a lot,but enough that we wanted it gone. With the way the economy is looking we were more concerned with the rest of the year....we decided to stay home for the first time in four years. Trying to be responsible is so hard!

 

[CarolA]

All you Dave Ramsey fans out there. You know how he always talks about how he went bankrupt? He bought a zillion houses with very little money down. For *whatever* reason, his bank got nervous and called his loans and he was toast. .

*whatever* reason was that Dave didn't pay. (He often fails to mention that little issue so that it sounds like the "banks just don't like me")

 

[kbkids]

*whatever* reason was that Dave didn't pay. (He often fails to mention that little issue so that it sounds like the "banks just don't like me")

That's my problem with him. I do agree with alot of what he says, but if I could just file bankruptcy and then start over fresh, I'd be good to go too.

 

[Glenn]

The unemployment numbers look low but they are deceiving. If your out of work more than 6 months your not counted in the unemployment numbers. Lots of folks fall in that catagory especially if you have anything to do with construction, lending or banking. Same with lots of manufacturing in the midwest. If they would count everyone that is looking for work the number would be lots higher. Another comment has been made on margin calls, in the late 20s many small investors were buying stock with 5 or 10% down with the rest on margin. When stocks dropped & the margins were called things snowballed down. Keep an eye open on things.

 

[dvcgirl]

The unemployment numbers look low but they are deceiving. If your out of work more than 6 months your not counted in the unemployment numbers. Lots of folks fall in that catagory especially if you have anything to do with construction, lending or banking. Same with lots of manufacturing in the midwest. If they would count everyone that is looking for work the number would be lots higher. Another comment has been made on margin calls, in the late 20s many small investors were buying stock with 5 or 10% down with the rest on margin. When stocks dropped & the margins were called things snowballed down. Keep an eye open on things.

You are right. Think of all the realtors and mortgage people who are out of work.....all independent contractors and not counted.

As for being out of work for six months or more and not being counted....is that because you no longer qualify for unemployment then and fall off the "continuing jobless claims" list?

 

[ObsessedwiththeMouse]

..

 

[leahjade]

On a news program that I saw last night said that a lot of our economic problems right now are due to consumer overspending - taking out larger mortgages than they can afford or not looking ahead to higher taxes and interest rates being added on to their payments, as well as the increasing credit card debt. For the first time in the US, citizens owe more on their homes that what they are worth! So a lot of our so-called "crisis" is because of individual irresponsibility.

 

[ObsessedwiththeMouse]

..

 

[mickeyfan2]

OK, recession then, not depression. I really never understood the difference between the two.

My Grandfather described the economy this way. If you and your neighbor are working then the economy is booming. If your neighbor is laid-off and you are working then the economy is in a recession. If you are laid-off then the economy is in a depression.

I think we are in a recession but a depression is highly unlikely. During the great depression a single worker supported 8 people. So the loss of a job was dire. Today that number is about 1 other person. Many families have two incomes. Losing one will hurt but they will not starve.

 

[mickeyfan2]

It's not just about "starting fresh" nor is bankruptcy an easy quick fix anwser. We are filing on Tuesday and it's not something that should be taken lightly, nor are we going to be "good to go" in the future, financially.

This is something that is going to follow us for the next 10 years, at least. Sure, we won't have the bills, but it's also a sense of failure, because we can't live up to our financial responsibilities. It's embarassing, to say the least.

Just my opinion....

How bad could it be if your can file bankruptcy and then 7 months later take a week long trip to the Poly?

 

[Fizzgig]

How bad could it be if your can file bankruptcy and then 7 months later take a week long trip to the Poly?

Wow. What a way to kill a good thread there, buck-o.

Can we return to the discussion we were having, or do you feel the need to continue on in this vein?

 

[mickeyfan2]

Wow. What a way to kill a good thread there, buck-o.

Can we return to the discussion we were having, or do you feel the need to continue on in this vein?

What is not true in what I said. There person stated how bad it really was when another stated how bad is was not. Then the person who has it so bad is off to the Poly. Maybe this is a indication of how they got to that point.

BTW What did your post add to this thread?

I actually posted before that post with actual stuff about a recession vs. depression.