Great Depression 2.0???

So... Here we are in 2009. In the United States, we have seen the stock market go from 14000 points to down near 8000 points. The credit market is screwed (which means we can't get loans) and the housing market has tanked (which means that people like my parents can't see their home for what it's worth). It sounds like things are tough all around the world. Banks are failing. Heck... I took a job here in St. Louis because my company bought another. Now, only a few months after I moved, my company was bought out because WE were in trouble. I have been assured that our jobs our safe... But for how long? I have a friend that moved out to St. Louis as well and he bought a home rather than renting like I did. Now he is struggling to make ends meet thanks to his mortgage. So, here are my questions to WBW... How is the current economic climate affecting you? For those in the USA, do you think we are heading towards the next Great Depression? And, those of us in the United States are welcoming President Obama on January 20th. Regardless of your political leanings, do you think we will come out of this anytime soon?

Oh... And I would also like to here from you guys and gals outside the USA... Who knows who started this mess... Chances are it was us, but you never know. And what do you think our new President's chances are to steer us in a better direction?

this is just a recession. think will turn around and be back with a strong economy 8-10 yrs. no matter who is president now, we are not going to see a difference in the next 4 yrs.

I'm just waiting for the other shoe to drop, they say we're safe at my job. I'm still nervous though.

true we haven't hit rock bottom yet.. we still have that to look forward to.

Quote:

Originally posted by bachiotomy

true we haven't hit rock bottom yet.. we still have that to look forward to.

I agree here. I don't think this is simply a recession. Everyone seems to think that if we can get people buying houses again that everything is fixed... but how does that happen? That's one of the things that caused the problem in the first place. Too many years of feast means that too many people chose to build rather than buy an older house. Now the housing market has a massive surplus that isn't going to be fixed anytime soon, even if lots more people are able to buy houses.

I fear we're still in for a pretty good downward spiral at this point and I think outsourcing overseas as well as buying foreign oil are mostly to blame. We've lost a lot of our wealth, and printing more money isn't going to get that back. I feared this was coming several years ago and went back to school to go from programming to nursing. While even health care isn't immune, I'm hoping that it will be one of the last to be hit. As a plus, when the economy worsens and you're in a stable career, you tend to be able to put yourself in a very strong financial position... at least that's what I'm hoping for anyway. I'm rat-holing money so that I'll be able to have a large down payment once housing prices appear to have bottomed out

Unfortunately though, the more people that decide to buckle down and save, the worse off our economy is... because even less money is being spent. It will be an interesting, and rocky, few years I think - to say the least.

I think we're in for at least another year of decline, and there really isn't much the government can or should do to fix it. I think the best thing for the government to do is cut taxes and get out of the way, then the recovery will come sooner then later. Economic activity needs to be encouraged and make jobs like the stimulus package proposes isn't going to encourage real long term activity and growth. Sure you'll keep some people busy for a few years but then what? This is a very complex problem we face and there is no quick fix, I think the free market is our best bet and unfortunately it doesn't look like it's going to be allowed to work unhindered.

The Housing Collapse of 2009 Will Be Worse Than 2008
http://www.youtube.com/watch?v=kunB4SnAh4g

Sure the mortgage companies screwed everyone but shame on people who were talked into loans they knew they couldn't afford.

As for me, I am scared for people like my parents... They are only 5 or 6 years from retirement age. And, like a lot of us, we have seen our retirement funds tank. I am 36, so I know that I have at least 30 years for it to rebound. But they don't have that cushion. And they have a second house to deal with. They moved into a 55+ community but still have another house that they can't sell. My brother was renting the house, but he is looking to move sometime soon. It really sucks!

I'm with you, Diode... I am also waiting for that other shoe to drop. As I said, I am working for a financial company that was bought out. We were told that our jobs our safe since the home office will remain here, but who really knows? I am also handicapped, so I need the medical benefits that my job provides. I would have to move back in with my parents if I lost my job. How pathetic is that at my age?!?!?!

Quote:

Originally posted by jbecause

The Housing Collapse of 2009 Will Be Worse Than 2008
[ Link ]

Sure the mortgage companies screwed everyone but shame on people who were talked into loans they knew they couldn't afford.

Yeah... I can see your point... There a lot of people out there that were sold on a good sales pitch. What's sad is that even though there are those that KNEW they couldn't afford the loans, there are also those that didn't. For example, old retirees that were suckered into these loans and didn't know well enough to read the fine print. I think there is plenty of blame to spread around.

this isn't even close to a depression... what caused all this is too many people making too little money borrowing too much money ... you cant make 25k/year and own a 500k home. The problem wasn't too much building ... if you have the money build what you want ...

the issue at hand is ..too many people have champagne taste with beer income.

america is becoming another europe ... everyone expects someone else to fix it ..and everyone expects things period ... no one will take responsibility for their own actions.

people need to get their heads out of their asses and stop bitching about the price of strawberries and gasoline (another major cause of the recession). in case you dont know what that means ....

you ever looked at the price of gas in england .. or hell ..the rest of the world ... how about all our fruits ...

its the Wal-Mart line of thinking that gets capitalism going in reverse...

to fix our problems ... we need to stop letting immigrants move freely across our borders ... and we need to stop employing illegals and paying them bullshit wages

we need to burn down every wal-mart in existence ...

we need the left and right wing radicals in this country to stop throwing temper tantrums and get along (left wingers would rather give osama bin laden a hug than to thank our president for keeping us safe and blame gwb for all our problems and forget that not everyone has a billion dollars to spend aimlessly) while extreme right wingers think everyone should go to church and live exactly by the bible and cram it down everyone elses throats...

most importantly ... people ..the consumers ... should stop bitching about spending 10 dollars extra while shopping for groceries and support their local mom and pop stores instead of feeding china .. oh i mean walmart.


and bullshit ... if someone didnt read the fine print ..fuck them too .. im not gonna pay for their ignorance ... thats like saying ... uh the guy fell off the mountain and died ..but he wouldnt have if there had been some rails ..or a sign that said uhh its steep stay away.

i pay my house note ... i dont ask for help ... there is NEVER an excuse for ignorance ... now if someone lost their job and is facing hard times ..i dont mind helping them out ... but some lame excuse to blame someone else cause they didnt know house notes are normally 5-8% instead of .025% .. yeah ok ..uh no ... thats being trash and people that blame someone else should be ashamed of theirselves.

Quote:

Originally posted by choochoo7777

most importantly ... people ..the consumers ... should stop bitching about spending 10 dollars extra while shopping for groceries and support their local mom and pop stores instead of feeding china .. oh i mean walmart.

OK... I know that was a serious post, but that quote is just funny as hell! And SOOO true!

Quote:

Originally posted by RogueLeader

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OK... I know that was a serious post, but that quote is just funny as hell! And SOOO true!

hell yeah dood ..i live in STL ..well the illinois side ... and im tired of wal-marts ... fuck them... ill gladly spend 20dollars in gas just not to go to walmart... i support unions ... i support local stores ..dierburgs, schnucks ... shop n save ... ect.

I've been back in school for the last year and a half, so other than having to change my loan provider, I haven't seen much change.

There are myriad reasons for the collapse, but they generally boil down to excessive credit/leverage, both by individuals and corporations. This is the inevitable result. Every attempt the government makes to "fix" the problem is only going to worsen the problem. The international economy is such a complex mechanism that it's the height of hubris for these pseudo-intellectuals to think they can tinker with a few gears here and there and not cause catastrophic changes on the other end. It's horrifying to watch, actually. The US is about to, for the first time, have a TRILLION dollar deficit. That's spending more than one trillion dollars more than they take in. So long as foreign creditors continue to lend us the money with which we can prop up our house of cards built on credit, that is.

The social net in the US prevents another "Great" Depression, so, IMO, this is just going to be a typical depression...much worse than the average recession, but likely not near as bad as 1930's.

Quote:

Originally posted by choochoo7777

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hell yeah dood ..i live in STL ..well the illinois side ... and im tired of wal-marts ... fuck them... ill gladly spend 20dollars in gas just not to go to walmart... i support unions ... i support local stores ..dierburgs, schnucks ... shop n save ... ect.

I live on the Missouri side... South County... And I am all about Shop n Save! I don't care that I have to bag my own groceries. It's still a good savings. I go to Dierburgs only for their beer selection. Though, I have found that the alcohol selection is pretty damn cool compared to what I am used to in Virginia... I am still getting used to the fact that I can find Jameson Irish Whiskey at my local grocery story!

well... the whole thing just doesn't happen over night folks... don't forget dumbass Democrats like Jimmy Carter and Bill Clinton pushing sub-prime mortgages over the years. And like you guys said earlier, giving out loans to people who could not pay them in the first place. And YES, not spending money hurts our economy more each day, I know, I see out on the field in contracting and the music industry. I do give the media a lot of credit in brain washing the general public that the economy is always bad when a republician is in office, just wait when the next idiot gets sworn in next week, 6 months down the road I bet ya, the media will change tunes, and the economy starts to slowly pick back up. The entire government needs to be impeached and start fresh with people who know what the hell they are doing, less government !!! FAIRTAX ! ! !! ! !!

To EL's post, I wonder... We have seen a deteriation of the mortgage market, with people not being able to pay back their loans... I am beginning to wonder if we are going to see a bunch of people not be able to pay back their student loans. I am actually in the last class of my Master's Degree... I will have 6 months (starting at the end of March) if I will have problems, as well. I HOPE to find a higher paying job, but who knows, right?

Also... I know I work in the financial industry, but does anyone really know when a recession turns into a depression? I mean, it took a federal government think-tank until October of 2008 before they announced we have been in a recession since December of 2007! That's ridiculous! Anyone know? I've tried to Google it, but no one seems to have a consistant answer.

Quote:

Originally posted by choochoo7777

this isn't even close to a depression... what caused all this is too many people making too little money borrowing too much money ... you cant make 25k/year and own a 500k home. The problem wasn't too much building ... if you have the money build what you want ...

Well, it's already longer than the "average" recession. There is no actual definition of an economic depression, but it's generally agreed that it's a very severe recession. The current recession shows no sign of letting up, so to say that it isn't close isn't quite accurate.

Quote:

Originally posted by choochoo7777

the issue at hand is ..too many people have champagne taste with beer income.

america is becoming another europe ... everyone expects someone else to fix it ..and everyone expects things period ... no one will take responsibility for their own actions.

Yes, people have become overextended.

Quote:

Originally posted by choochoo7777

people need to get their heads out of their asses and stop bitching about the price of strawberries and gasoline (another major cause of the recession). in case you dont know what that means ....

Gasoline prices are not a cause of the recession. The current downturn has been caused by the collapse of the US housing market. The collapsing prices of homes collapsed the prices of credit derivatives which were held by just about every major financial institution in the country. The realized losses on these derivatives caused a collapse of the balance sheets of these banks, which caused a collapse of the credit markets as the banks needed more capital and became severely risk averse. That, then, spread to the rest of the economy. And as housing prices are still declining, the cycle isn't over yet.

Quote:

Originally posted by choochoo7777

you ever looked at the price of gas in england .. or hell ..the rest of the world ... how about all our fruits ...

The price of gas in the rest of the world is the same as it is here. The taxes or subsidies the individual governments place on the gasoline their consumers use is entirely dependent upon the local government. This has little to do with the economic downturn. If it did, we'd be out of it now, as the current price is about 20% of what it was at its peak last summer.

Quote:

Originally posted by choochoo7777

its the Wal-Mart line of thinking that gets capitalism going in reverse...

Wat? Wal-Mart is a shining example of capitalism. Those able to offer consumer products at a lower price than others win market share. That's the free market working. Not to mention, the globalization that has hurt the average American is also responsible for the improved standard of living of over a billion people around the world.

Quote:

Originally posted by choochoo7777

to fix our problems ... we need to stop letting immigrants move freely across our borders ... and we need to stop employing illegals and paying them bullshit wages

No. We need to get rid of the minimum wage and pay people commensurate with their skill level and the demand for such labor.

Quote:

Originally posted by choochoo7777

we need to burn down every wal-mart in existence ...

No. If people want to shop somewhere else due to political views or the like, that's fine, but it's ridiculous to think that people should be forced to pay more for products just because they're made domestically.

Quote:

Originally posted by choochoo7777

we need the left and right wing radicals in this country to stop throwing temper tantrums and get along (left wingers would rather give osama bin laden a hug than to thank our president for keeping us safe and blame gwb for all our problems and forget that not everyone has a billion dollars to spend aimlessly) while extreme right wingers think everyone should go to church and live exactly by the bible and cram it down everyone elses throats...

Meh. This is neither here nor there. Yes, politicians and the political ideals of their constituents span the ideological spectrum. That, in itself, has little to do with the reasons for the current economic problems.

Quote:

Originally posted by choochoo7777

most importantly ... people ..the consumers ... should stop bitching about spending 10 dollars extra while shopping for groceries and support their local mom and pop stores instead of feeding china .. oh i mean walmart.

Why? Until the wage global wage disparity diminishes, this is unrealistic. Why would people spend more for the same products, when the can get them cheaper elsewhere? It's inefficient an illogical.

Quote:

Originally posted by choochoo7777

and bullshit ... if someone didnt read the fine print ..fuck them too .. im not gonna pay for their ignorance ... thats like saying ... uh the guy fell off the mountain and died ..but he wouldnt have if there had been some rails ..or a sign that said uhh its steep stay away.

i pay my house note ... i dont ask for help ... there is NEVER an excuse for ignorance ... now if someone lost their job and is facing hard times ..i dont mind helping them out ... but some lame excuse to blame someone else cause they didnt know house notes are normally 5-8% instead of .025% .. yeah ok ..uh no ... thats being trash and people that blame someone else should be ashamed of theirselves.

I agree with this not only with regard to the homeowners, but also on a very large scale. I think banks that made poor loans should not be receiving hundreds of billions of taxpayer dollars to recapitalize them, and allow them to continue to operate, despite making a series of decisions that has essentially bankrupted them.

Quote:

Originally posted by richzep

well... the whole thing just doesn't happen over night folks... don't forget dumbass Democrats like Jimmy Carter and Bill Clinton pushing sub-prime mortgages over the years. And like you guys said earlier, giving out loans to people who could not pay them in the first place. And YES, not spending money hurts our economy more each day, I know, I see out on the field in contracting and the music industry. I do give the media a lot of credit in brain washing the general public that the economy is always bad when a republician is in office, just wait when the next idiot gets sworn in next week, 6 months down the road I bet ya, the media will change tunes, and the economy starts to slowly pick back up. The entire government needs to be impeached and start fresh with people who know what the hell they are doing, less government !!! FAIRTAX ! ! !! ! !!

OK... I realize I am talking to a die-hard republican, but I think that Obama will surprise you. He is already talking about tax cuts... And I don't think that the media is "brain-washing" us whenever a republican is in office. I know for a fact that the last 8 years have been rather painful for myself and my family. I didn't need the media to tell me that.

Quote:

Originally posted by RogueLeader

To EL's post, I wonder... We have seen a deteriation of the mortgage market, with people not being able to pay back their loans... I am beginning to wonder if we are going to see a bunch of people not be able to pay back their student loans. I am actually in the last class of my Master's Degree... I will have 6 months (starting at the end of March) if I will have problems, as well. I HOPE to find a higher paying job, but who knows, right?

Also... I know I work in the financial industry, but does anyone really know when a recession turns into a depression? I mean, it took a federal government think-tank until October of 2008 before they announced we have been in a recession since December of 2007! That's ridiculous! Anyone know? I've tried to Google it, but no one seems to have a consistant answer.

To answer the question to the best of my ability:

Yes, people will repay their student loans because THEY HAVE TO. It is impossible to discharge student debt, even through bankruptcy. So either you pay, or they follow you around for years and make you pay. Those are the options available to people.

And you're right, there really is no true definition of a depression...it seems that it's generally just a very severe recession.

dude, what kind of tax cut is Obama talking about ? more like spread the wealth around with government checks to the poor... and where do you think that money is coming from??? small business like me.... and what do you think I will have to do, if my company gets taxed more??? you guessed it, I will have to cut the fat, trim more workers off.... which of course I prefer not.... I am not a die-hard democrat or republican, but all I want is a government to do the right thing, promote job growth with no taxes, covert to FAIRTAX ! to keep politicians like Obama use cut taxes to get elected....

Media are democrats, how in the hell do you think Obama got elected???? huh??