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Thread: How bad can a recession get in our current day?

  1. #1
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    How bad can a recession get in our current day?

    This may be overly simplistic, but I wanted to get your opinions on the matter. The situation now is different from the Great Depression, so it probably will never get that bad again, but how bad can this recession become? Obviously, now we have the FDIC, no longer are on a pegged currency exchange rate, and obviously the Fed has the prior knowledge of what they did wrong in the great depression, among other measures put in place to prevent such an occurrence from happening again.

    But obviously the stock market is taking a beating, people are again not trusting the financial sector (although not the same banking panic), we had oil price shocks, our federal debt is prohibitive. We have to wait and see on how the timing of the bailout works, but at least some measure is being taken.

    How bad do you see this getting?

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    [QUOTE=Jets Voice of Reason;2791804]This may be overly simplistic, but I wanted to get your opinions on the matter. The situation now is different from the Great Depression, so it probably will never get that bad again, but how bad can this recession become? Obviously, now we have the FDIC, no longer are on a pegged currency exchange rate, and obviously the Fed has the prior knowledge of what they did wrong in the great depression, among other measures put in place to prevent such an occurrence from happening again.

    But obviously the stock market is taking a beating, people are again not trusting the financial sector (although not the same banking panic), we had oil price shocks, our federal debt is prohibitive. We have to wait and see on how the timing of the bailout works, but at least some measure is being taken.

    How bad do you see this getting?[/QUOTE]

    Depends on what def of recession you use...one is two consecutive negative GDP quarters! If that's true, then we're not in a recession.

    Obviously, the economy is in a down cycle as happens regularly! At the current rate, gasoline here in my area will be under $3 in a week or two. That'll help. Some segments of the economy are hurting worse than others, but the Bush economy hasn't been as bad as the 'rats claim it is (surprise)!!:eek:

    Since 2000, which country has a 19% expansion of their economy and which one only 8% expansion?

    France, Germany, Italy, Japan, U.S.?

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    [QUOTE=Jets Voice of Reason;2791804]
    How bad do you see this getting?[/QUOTE]
    I am, usually, absurdly optimistic. Okay?

    And let's say "recession" isn't a strong enough word to describe where we're heading.

    - we haven't nearly seen the worst.
    - Int'l markets are going to hell. I know we get carried away a lot in America-bashing, but it's still a point of fact: there is no healthy world economy without a healthy American economy. How high do you think securities in Russia or China will go ... knowing full well Putin or the Communist Secretariat can and will take it a moment's notice...this serves to undermine confidence. Europe is in freefall, S. America is in freefall, even oil is dropping. The bottom is confidence and when they announced the deal a second time, for good, the markets indicated just how confident they are.

    True conservatives were cursing this deal and they're right. We have to take our lumps and not try to stop the sea with sand castles.

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    The doomsday scenario isn't a major market crash it's the slow, tortorous bleed of a non-growing economy that can't work off previous excesses and a really bad fiscal and tax situation. Look at Japan...their economy has been atrocious for a decade. I think we're looking at a pretty bad 5 years coming up, possibly longer. The problem is that we already had major problems that needed to be confronted - social security, reliance on foreign energy, a major shift in economic strength from the U.S. to China and India. Those things are still there and we now have far fewer resources to deal with them. Our government is going to be burdened with the ramifications of the banking bailout for many years and it will cause other things to be neglected. Some people think the best position to take in the market is with stocks that are already beaten down, some people think commodities. But Jeff Macke made a funny point the other night when he said "the only two positions I like right now are cash and fetal." Unfortunately, those may be the most appropriate for the next few years.

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    [QUOTE=asuusa;2792071]Depends on what def of recession you use...one is two consecutive negative GDP quarters! If that's true, then we're not in a recession.

    Obviously, the economy is in a down cycle as happens regularly! At the current rate, gasoline here in my area will be under $3 in a week or two. That'll help. Some segments of the economy are hurting worse than others, but the Bush economy hasn't been as bad as the 'rats claim it is (surprise)!!:eek:

    Since 2000, which country has a 19% expansion of their economy and which one only 8% expansion?

    France, Germany, Italy, Japan, U.S.?[/QUOTE]

    I tend to think this is a little more than a bubble burst though. I understand the business cycle and downturns, but there are a lot of factors here that indicate that this may last a while. The stock market is one thing, but the instability of the financial market can be a big problem unless people get confidence back in investment. Oil is obviously a big issue, but it's going to take more than cheaper gas prices for people to feel encouraged to spend again.

    Like Sackdance just referenced, international markets are taking a big hit as well.

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    Good call out js23..

    I think what this has the potential to do is accelerate the US's decline as the worlds economic power.


    I don't know how we avoid it, we are resource poor, in massive amounts of debt and have outsourced a lot of our production to other countries. We seem to be an economy of marketer's, middle management and service (including Financial services :rolleyes:) and don't produce much anymore..

    Maybe google will figure this whole mess out :D

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    [QUOTE=jetstream23;2792288]The doomsday scenario isn't a major market crash it's the slow, tortorous bleed of a non-growing economy that can't work off previous excesses and a really bad fiscal and tax situation. Look at Japan...their economy has been atrocious for a decade. I think we're looking at a pretty bad 5 years coming up, possibly longer. The problem is that we already had major problems that needed to be confronted - social security, reliance on foreign energy, a major shift in economic strength from the U.S. to China and India. Those things are still there and we now have far fewer resources to deal with them. Our government is going to be burdened with the ramifications of the banking bailout for many years and it will cause other things to be neglected. Some people think the best position to take in the market is with stocks that are already beaten down, some people think commodities. But Jeff Macke made a funny point the other night when he said "the only two positions I like right now are cash and fetal." Unfortunately, those may be the most appropriate for the next few years.[/QUOTE]

    Bingo. The **** is starting to hit the fan here. Having to pay back government debt, oil shocks, the housing and loan crisis. Not to mention doomsday when Social security dries up. I'm thinking we're in for a stagnant few years. I'm not trying to sound anti-government, but seriously, the government has crapped on us big time here.

    And the one thing I always laugh at when I watched the debates: So, how are you going to finance these things? What things are you going to have to give up?

    And neither candidate is willing to say the tough thing to say. "We just need fiscal responsibility and accountability" Like that's going to happen anytime soon.

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    [QUOTE=CTM;2792304]Good call out js23..

    I think what this has the potential to do is accelerate the US's decline as the worlds economic power.


    I don't know how we avoid it, we are resource poor, in massive amounts of debt and have outsourced a lot of our production to other countries. We seem to be an economy of marketer's, middle management and service (including Financial services :rolleyes:) and don't produce much anymore..

    Maybe google will figure this whole mess out :D[/QUOTE]

    That's what scares me. I think we just have to ride it out. We can't run from excessive spending forever. Whoever is elected is going to have a helluva short honeymoon period.

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    [QUOTE=CTM;2792304]Good call out js23..

    I think what this has the potential to do is accelerate the US's decline as the worlds economic power.


    I don't know how we avoid it, we are resource poor, in massive amounts of debt and have outsourced a lot of our production to other countries. We seem to be an economy of marketer's, middle management and service (including Financial services :rolleyes:) and don't produce much anymore..

    Maybe google will figure this whole mess out :D[/QUOTE]

    It's bad. How did we get like this? In my opinion it is personal responsibility and accountability in our society. It is so different here than other parts of the world. People in China actually pay for what they have.

    How many people in the US actually OWN their cars? Most people here have little or no net worth. They "own" a house that is actually 90% or more owned by the bank, they lease a car, they listen to their iPod and wear True Religion jeans with the purchases still sitting on a Visa card. It's sad. People in China walk into a Buick dealership with a briefcase that has $29,000 in it to buy a car. You think I'm kidding? I'm 100% serious.

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    [QUOTE=Jets Voice of Reason;2792311]Bingo. The **** is starting to hit the fan here. Having to pay back government debt, oil shocks, the housing and loan crisis. Not to mention doomsday when Social security dries up. I'm thinking we're in for a stagnant few years. I'm not trying to sound anti-government, but seriously, the government has crapped on us big time here.

    [B]And the one thing I always laugh at when I watched the debates: So, how are you going to finance these things? What things are you going to have to give up?

    And neither candidate is willing to say the tough thing to say. "We just need fiscal responsibility and accountability" Like that's going to happen anytime soon.[/B][/QUOTE]

    You can't though. Nobody would vote for the guy that delivers that message. We elect people who tell us what we want to hear, even though we know it's bull****, and then we get pissed when it's proven bull****..

    I mean sure, blame the politicians, but a big part of the problem is how ignorant, disinterested, selfish, gluttonous, and entitlement minded this country has become.

    We're like Rome with it's excess at the end of it's run - fat and happy and unconditioned for real competition. People 40 and younger think the US has some divine right to be the world super power and that it's always been that way and it'll always be that way. No chance fat ass. What've we been the unquestioned super power for less the 100 years?

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    [QUOTE=jetstream23;2792327]It's bad. How did we get like this? In my opinion it is personal responsibility and accountability in our society. It is so different here than other parts of the world. People in China actually pay for what they have.

    How many people in the US actually OWN their cars? Most people here have little or no net worth. They "own" a house that is actually 90% or more owned by the bank, they lease a car, they listen to their iPod and wear True Religion jeans with the purchases still sitting on a Visa card. It's sad. People in China walk into a Buick dealership with a briefcase that has $29,000 in it to buy a car. You think I'm kidding? I'm 100% serious.[/QUOTE]

    I know it. I feel like I'm talking to a wall when I talk to family/friends. I've saved over 200k, never paid a dime of interest on anything besides my house or 1.9% car loan in my life, but most people who see the way I operate think I'm a cheapskate or worse.

    I simply don't buy anything that I can't pay for now. How is that bad? I save and then I buy. Of course, I looked up to my grandfather growing up and he lived through the depression. He taught me the value of money and saving for a rainy day I guess. I teach my children the same.

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    [QUOTE=CTM;2792343]I know it. I feel like I'm talking to a wall when I talk to family/friends. I've saved over 200k, never paid a dime of interest on anything besides my house or 1.9% car loan in my life, but most people who see the way I operate think I'm a cheapskate or worse.

    I simply don't buy anything that I can't pay for now. How is that bad? I save and then I buy. Of course, I looked up to my grandfather growing up and he lived through the depression. He taught me the value of money and saving for a rainy day I guess. I teach my children the same.[/QUOTE]

    We're very similar. I'd have anxiety if I didn't pay the credit card in full each month or had less than a year's salary in my emergency fund. I'm probably overly conservative that way but I like knowing I'm ready for a rainy day....or a rainy year. Now, if we have a rainy decade....that's another story.

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    [QUOTE=jetstream23;2792350]We're very similar. I'd have anxiety if I didn't pay the credit card in full each month or had less than a year's salary in my emergency fund. I'm probably overly conservative that way but I like knowing I'm ready for a rainy day....or a rainy year. Now, if we have a rainy decade....that's another story.[/QUOTE]

    Lol, I hear you. 1 year was my goal, but to be honest, I saw most of this coming 3-4 years ago and am now can go 3 years without working an hour if need be. Makes me a lot more comfortable in times like this. My wife has hated it all along, we've fought about it constantly, like when I wouldn't buy her a 50k car last year, but if this thing hits as bad as it has the potential too, she'll be thanking me then :yes:

    I gotta tell you, it's no wonder to me that California is the hardest hit here. 3-4 years ago I moved out there for work and was looking to buy a house. The arrogance of people in regards to real estate was astounding out there. Realtors/friends/neighbors/mortgage brokers - all of them tried to talk me into taking a neg am loan in order to get into something, anything before it went through the roof even further.. Wouldn't do it. Wasn't going to pay interest on interest as a rule!. Thank god I didn't

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    [QUOTE=jetstream23;2792350]We're very similar. I'd have anxiety if I didn't pay the credit card in full each month or had less than a year's salary in my emergency fund. I'm probably overly conservative that way but I like knowing I'm ready for a rainy day....or a rainy year. Now, if we have a rainy decade....that's another story.[/QUOTE]

    Me too. Same as you and CTM. I'd be interested to know the story on your's and CTM's parents, to see how much of our conservative approach to money was passed on by them. In my case, my dad grew up during the depression. I don't remeber him laboring the point but he certainly told me some stories about how poor they were growing up. When I was a kid he was the kind of guy who walked around the house turning off lights in empty rooms. Or if you complained the house was chilly he'd say put on a sweater. Now I find myself doing the same things with my own family.

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    [QUOTE=BushyTheBeaver;2792364]Me too. Same as you and CTM. I'd be interested to know the story on your's and CTM's parents, to see how much of our conservative approach to money was passed on by them. In my case, my dad grew up during the depression. I don't remeber him laboring the point but he certainly told me some stories about how poor they were growing up. When I was a kid he was the kind of guy who walked around the house turning off lights in empty rooms. Or if you complained the house was chilly he'd say put on a sweater. Now I find myself doing the same things with my own family.[/QUOTE]

    Ha! My dad and grandfather (mothers father) were the same way. My mother on the other hand not at all.

    There divorced now, but my dad retired at 60 and lives in a big house that's fully paid for. My mother has mortgage on her small senior home and will probably work till the day she dies unless one of the kids support her...]

    I'm the same way with my kids..

    btw, on the cheapskate stuff. The two of the biggest culprits for me who used to give me a hard time (besides my wife and her mother) were my wife's brother and his wife. It's funny cause in the last 4 years, I've upgraded my house while they had to sell their condo to pay credit card debt and now likve with her mother. The stupid bastards still think I'm cheap though, amazing huh? I'm paying a $3000 mortgage payment, they're living off her parent's but I'm cheap. lol..

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    [QUOTE=CTM;2792372]
    btw, on the cheapskate stuff. The two of the biggest culprits for me who used to give me a hard time (besides my wife and her mother) were my wife's brother and his wife. It's funny cause in the last 4 years, I've upgraded my house while they had to sell their condo to pay credit card debt and now likve with her mother. The stupid bastards still think I'm cheap though, amazing huh? I'm paying a $3000 mortgage payment, they're living off her parent's but I'm cheap. lol..[/QUOTE]

    They'll think you're even cheaper when you won't loan them money to pay off their debts. I'm sure you've read the Aesop fable about the grasshopper and the ant. Much as there are conservatives and liberals in American politics, there are grasshoppers and ants when it comes to personal finances. I'll stop short of likening them to bulls and bears cuz that's slightly different, and it's possible to be both an and and a bull at the same time (although I'd venture that there are more ants of the bear variety).

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    [QUOTE=CTM;2792372]Ha! My dad and grandfather (mothers father) were the same way. My mother on the other hand not at all.

    There divorced now, but my dad retired at 60 and lives in a big house that's fully paid for. My mother has mortgage on her small senior home and will probably work till the day she dies unless one of the kids support her...]

    I'm the same way with my kids..

    btw, on the cheapskate stuff. The two of the biggest culprits for me who used to give me a hard time (besides my wife and her mother) were my wife's brother and his wife. It's funny cause in the last 4 years, I've upgraded my house while they had to sell their condo to pay credit card debt and now likve with her mother. The stupid bastards still think I'm cheap though, amazing huh? I'm paying a $3000 mortgage payment, they're living off her parent's but I'm cheap. lol..[/QUOTE]



    funny, makes me think of a couple of friends of mine...they call me cheap because my fiance and I won't meet them out for dinner four times a week, and how I turn down going away with them to save money..but I am on track to pay off my 30yr mortgage in 15 and they just moved into her mother's house...

    crazy priorities man...just crazy

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    [QUOTE=BushyTheBeaver;2792364]Me too. Same as you and CTM. I'd be interested to know the story on your's and CTM's parents, to see how much of our conservative approach to money was passed on by them. In my case, my dad grew up during the depression. I don't remeber him laboring the point but he certainly told me some stories about how poor they were growing up. When I was a kid he was the kind of guy who walked around the house turning off lights in empty rooms. Or if you complained the house was chilly he'd say put on a sweater. Now I find myself doing the same things with my own family.[/QUOTE]

    All from my Dad. Learned a ton of valuable lessons, money and otherwise from him. He never buys more than he needs and constantly saves, saves, saves. Your sweater story resonates with me. Nothing annoyed my father more than if there was an empty room with a light on. He constantly walked around the house turning lights off. And yes, I do the same now. :D

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    I thought I had money saved for a rainy day... but it's flooding away in the market.

    My checking account is bloated because I'm horrified to do anything with the money.

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    [QUOTE=BushyTheBeaver;2792382]They'll think you're even cheaper when you won't loan them money to pay off their debts. I'm sure you've read the Aesop fable about the grasshopper and the ant. Much as there are conservatives and liberals in American politics, there are grasshoppers and ants when it comes to personal finances. I'll stop short of likening them to bulls and bears cuz that's slightly different, and it's possible to be both an and and a bull at the same time (although I'd venture that there are more ants of the bear variety).[/QUOTE]

    Good call!

    Our relationship is still strained from that. My wife's brother is lazy, he works as a mortgage broker (HA!) and when things were good, he was working about 10 hours a week and making almost what I made a year, with significantly less expenses.

    So once things started to slow down, he was still working 10 hours a week and making no money. They had to sell their house to pay off their enormous CC debt and that took awhile to sell, so he ended up borrowing money from his mother and a friend. Gets back to me later that he was annoyed that I never "offered" to loan him money. He used to give me the sob story, and instead of me feeling bad and offering to help him out like he intended, all I was thinking was a) I told you that you should've been working more to get while the getting was good and b) why the **** are you still working 10 hours a week and hitting people up for money ~ get your ass out there and work 60 hours if you need to.

    Me and my wife and him and his wife used to pall around all the time, hasn't been the same since..

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