How bad is the economy?

[coog]

http://www.fee.org/publications/notes/notes/threemyths.asp

This guy writes better than I do.Decide for yourself.I think the parallels between Roosevelt and Obama are far more striking than Bush and Hoover.

 

[timberwolf]

I don't really know how bad it is, doubt many do.

But I think it's going to get a good bit worse before it gets any amount better. There is a latency effect with big problems like this. Right now we are hearing of layoffs and bussinesses shutting down, but a lot of these havn't yet taken effect. I suspect there will be a lot of people not going back to their jobs in the new year, and then give that a couple month for people to run out of cash in hand and easy credit. Also give it a little time for the spin off industries, resturants, stores, tourisum and recreational industries to follow in with cutbacks due to lost customers.

then there is the automotive industry, seems quite unlkely that the gvnmt is going to pony up the cash to keep all three going.

And there are other shoes to hit the floor yet. Here is an interesting one to watch for. Hope I can explain it right. Big cities with public transportation are not taxed on infrastructure, but as they are not taxed on infrastructure they can not write off asset depreciation. Some where along the way a fat cat came up with a swindle where the cities would sell their public transit infrastructure to banks that then would lease the infrastructure back to the cities. Trick was the banks holding these assets could write off the depreciation of these assets against their profits and a deal was struck to split the profits. Problem is one of the major players in the game was AIG and there were clauses in the deal that should the banks run into finantial trouble the cities would be forced to buy back the assets with penelty or find another holdership for the leases. Now cities for the most part took the money and ran and don't have the capital or financing to buy back the infrastructure. So they will be looking for buy in... Enter government bailout. All this did not pop the day AIG packed it in, but as these lease aggreements come up for renewal and they work to sort out the pile of paper left over from AIG cities will be lining up for government bailouts.

At the same time as more an more forclosures take hold tax money is dissappearing from city budjets only compounding matters.

All these things take time to come undone and I fear we are just seeing the leading edge or fire ball so to speak and haven't been realy impacted by the shock wave let alone fallout.

 

[mountainlake]

On the bright side I just filled up the car and truck at $1.80 a gallon 45 gals = $81.00. Last summer at $4.00 that would have been $180 leaving me $99 for chain saws. But with our enviremental wackcos running the show we won't be drilling anymore and the prices will go up again. Steve

 

[513leonard]

fuel here cost $ 1.98 a gallon now

$1.64 a gallon

 

[513leonard]

No such thing as a bankrupt automaker. Can't be done. Why wouldn't GM have already done it otherwise? Or Chrysler?

Who here on this board would spend $30,000 (or more) on a piece of very complex machinery, one with thousands of moving parts, kept in motion by millions of lines of computer code, from a company that is bankrupt, and may not be around to support the vehicle in six months time? Now let's add to that scenario...this machine in question is vital to your day-to-day life, and if inoperable for even a short period of time, throws your lifestyle into turmoil?

The anwer is...no one. Any Chapter 11 would immediately be converted to a Chapter 7 liquidation. No revenues---no chance of recovering.

So you folks that own Chevy pickups (lock-washers or not, Ultra...), think real hard about how you feel about the situation. If you don't want to be parting out your vehicle on eBay, that is.

And owners of Ford and Dogde pickups...think real hard too, because a GM bankruptcy will destroy the supply base, almost all of which are shared by other OEMs. Chrysler would fold within weeks, Ford might take several months longer. Those in the market for a new vehicle...Toyota and Honda will be pleased to supply you with one. Ooops...Toyota and Nissan only make half-tons, so that's out. Don't need a truck? They'll be pleased to supply you with a sedan. Of course, we just took out 50% of the supply base, so the laws of supply and demand being what they are...let's just say you'll drive off that dealer's lot feeling like you just got :censored:ed by a train.

Now we've just added another 3 million people to the unemployment and welfare lines. So those folks are going to be buying :censored:all from the companies the rest of you work for...and so on...and so on....and so on...

Don't get me wrong...I don't think these loans are a great idea myself. But I also know they're the only idea we've got.

Note: For those who don't already know--I'm a Ford salaried worker.



.

:agree2: GM worker

 

[513leonard]

The Big three can save themselves... They just need to shed themselves of the fat, bloated Unions. Put a salary cap on every employee, at every level of the companies... Wanna have a job still? Then every employee makes $30,000 for the next two years, no benefits.

Lots of folks living in America on those wages. Why should the Government shell out more taxpayer money (that it doesn't have anyway) for companies that have bad business practices?

Cut the fat from inside... Then come beg for a handout.

There are a lot of construction companies going under nationwide... Thousands of people out of work... Where's their Bailout?

you want to cut the fat, start with the real SOB's who do nothing good for America and get rid of the worthless politicians who love your money and spend it so wisely

 

[timberwolf]

Talk about things being out of wack, barrel of whole sale gas is 44$ barrel of crude is $49 So right now refiners are loosing 5$ to process and sell a barrel of gas. Supply and demmand at it's finest. Thats the news story anyway, but reallity they are processing crude to gas today that was sold under contract months ago at well over $100 a barrel.

But the low crude prices are sure going to slow the will to drill.

 

[ropensaddle]

you want to cut the fat, start with the real SOB's who do nothing good for America and get rid of the worthless politicians who love your money and spend it so wisely

We're right behind ya buddy carry on. Lead follow or get the help out
of the way

 

[Crofter]

Start planting current bushes to plug your lectric cars into!

 

[poulson01]

I've been on my own for 14 months. My ex boss just went chapter 7... 1 mill in the hole. I just picked up his Mack CH612 dump and 20 ton Eager Beaver for 11 grand. I got his hammer for my PC-50 for $1000.

I know a guy who just bought a '95 F-450 dump, 7.5 ton trailer and a bobcat 763 all for 7 grand. Anyone looking for a dump truck, theres a '98 international tandem over here with a fresh 460 and 7LL for $8,000.

I've been diggin in for about 20 months. I started getting worried, winter before last. Looks like my spidy senses were right. I'm hoping things start happening by spring.

 

[H2C]

Future Ecomony

I'm self-employed too--have been for 25 years. Out here in the colonies, we went through the worst recession from 1981-1989 since the Great Depression--even when the rest of the country was doing better by the late 80's. I started my business in the early stages of that recession, and ultimately prospered.

But that was a regional thing, this time it is Global. More importantly, we have systemic problems in finance, and we are deflating a super-bubble in virtually every sector of the global economy--including our federal government that is deeply in debt and is reliant on borrowing money from others in the form of Treasuries, etc. If (or when) other governments no longer have the excess money and stop buying our Treasuries, hang on........

The next big bailout will be state and local governments--and the fed government does not have the money to give out, and may not be able to borrow it.

This will NOT be a 12-24 month recession. We may (and probably will) stop seeing a declining economy in the next 12-24 months, but the recession won't be a "V" shape, it may not even be "U" shaped, there is a strong possibility it will be "L" shaped--with an open end. In other words we will see a very long bottom, unlike we have seen in post WW II.

In late summer of 1929, the Dow Jones Industrials stood at 350+ points. Over the next year, it fell to 50 points. It wasn't until 1952 that the DJI reached 350 points again. And that was with the significant help of WW II.

Right now, we are seeing a struggle between inflation vs deflation that is actually helping to moderate bigger changes in the economy. But if one gets the upper hand (and there are good arguments on both sides) we could see even more rapid economic changes than we have seen so far.

There will be a paradigm change in our economy--and maybe our lifestyles--over the next 5-15 years.

Having said all that, Lakeside does have it right. We will continue to work, and scramble, and live a decent life--we just will do it with a lot less leveraging of our money. We won't have the excesses we have grown accustomed to over the past generation or so. There will be a lot less $50k pickups with talking mirrors, or $1200 chainsaws. We won't be collecting rifles, smurf dolls, or vintage chainsaws at ludicrous prices on ebay. And we won't see very many 5000 sq ft McMansions being built--and the existing ones will be selling at half the cost.....

The prices of full-size pickups and SUV's declined by 30-50% this spring on craigslist here in Colorado. There ARE a lot of great deals out there when it comes to vehicles, tools, etc........


Casey

Casey - Well said. I too believe we are preparing to see a "ride" like never before. It's also a sad fact that wars appear to bolster the economy...at a high "price". Fasten your seat belts.

 

[poulson01]

why does war help the economy? Someone told me once but I don't remember. Is it because the military industrial complex thrives and the tax dollars trickle back down? If so, I think that war could help the economy in some cases and hurt it in others. Like what being stuck in Afghanistan did to the USSR. Certainly didn't help their economy. Incidentally, I have a 1915 Tokarev in 7.62mm Russian. It's made by Westinghouse. Maybe that's how war helped our economy before.

Also about what Casey said. Where do you get your info from? I don't watch a lot of TV but I'm sure you didn't get all that from network. I like a lot of what you said and I have been thinking and saying for a couple years that I thought hard times were coming, how most people around me were living was unsustainable and that all these bigass houses me and my buddies have been building will be multi family homes one day.

I have a feeling, home ownership will never get back as high as it was. There will be good money in land lording again.

I talked to another great depression "survivor" today. The consensus seems to be that this one is worse. Not dollar wise but the actual effect that it's having on people and families. Most people aren't like most of us on this board. We're a pretty self sufficient lot. Also most middle class people in the thirties had a much lower standard of living and were pretty thrifty compared today. Most middle class people today are very dependent on their money. Most people around me can't even mow their own lawn. The depression lady this morning told me that her mom, when she let out a hem, would wind up the string and save it. In contrast, one of my neighbors drives his kid to the end of his driveway to get on the school bus....and then sits there at the end of the day, in his H2, with the engine running, to pick the kid back up. Some people have a long driveway, right? This guy doesn't even have a transformer in his yard. He gets his power right off the pole. The sad thing is I didn't make ANY of that up!

I have started bartering a lot and doing odd jobs. Next weekend, I have to fix the wiring in a guys RV. He's going to help me close my shop in and get the roof on in return. My digging job has turned into a framing job. I'm not a framer but I'm learning fast!