torikid Posted July 16, 2008 Report Share Posted July 16, 2008 I have heard so many people referring to a depression, buying gold coins, stocking up on canned food, Freddie Mac and Fannie Mae...I thought I would start a thread to hear everyone's opinion on the future... I am concerned, but not enough to buy gold coins yet.With the housing foreclosures being up and people's credit being damaged more and more with lost jobs, etc... What do you think will happen to the requirements on credit. They tightened them last year and are working on loosening some aspects already. So I have heard, anyway.What do you all think? Quote Link to comment Share on other sites More sharing options...
jq26 Posted July 16, 2008 Report Share Posted July 16, 2008 I think people need to relax. This is a natural phenomenon. Unfortunately, even in the era of managed economies there is no such thing as perpetual growth. It has to retreat, then grow, then retreat, then grow. I just think that Americans are generally used to getting what they want when they want it that the pain threshold is so low that everything is a termed a 'crisis'. It will work itself out if allowed to. Even the foreclosure 'crisis' is limited to 1%- mostly in overheated areas with high-risk borrowers.The only difference this time around is that people loaded up on debt relative to their income to a much higher extent than in previous boom-bust cycles. There will be some who can't sustain servicng the debt but most will have to cut back and will survive. The fact that 600 starbucks are closing down, that grandma & grandpa's house-flipping club reverted back to playing bridge, and that home equity ATM has an 'out of service' sign on it is all healthy in the long run. My survival plan is to close my eyes, cut all living costs to the bone, buy as much long terms stock as I can afford to every month in quality companies through my 401k, my son's 529 plan, wife's 403b, and my taxable stock account, and see what happens. Its not the end of the world. Quote Link to comment Share on other sites More sharing options...
ShortBus Posted July 16, 2008 Report Share Posted July 16, 2008 I think people need to relax. This is a natural phenomenon. Unfortunately, even in the era of managed economies there is no such thing as perpetual growth. It has to retreat, then grow, then retreat, then grow. I just think that Americans are generally used to getting what they want when they want it that the pain threshold is so low that everything is a termed a 'crisis'. It will work itself out if allowed to. Even the foreclosure 'crisis' is limited to 1%- mostly in overheated areas with high-risk borrowers.The only difference this time around is that people loaded up on debt relative to their income to a much higher extent than in previous boom-bust cycles. There will be some who can't sustain servicng the debt but most will have to cut back and will survive. The fact that 600 starbucks are closing down, that grandma & grandpa's house-flipping club reverted back to playing bridge, and that home equity ATM has an 'out of service' sign on it is all healthy in the long run. My survival plan is to close my eyes, cut all living costs to the bone, buy as much long terms stock as I can afford to every month in quality companies through my 401k, my son's 529 plan, wife's 403b, and my taxable stock account, and see what happens. Its not the end of the world.What he said. Exactly. Quote Link to comment Share on other sites More sharing options...
DocDon Posted July 16, 2008 Report Share Posted July 16, 2008 Buy silver? Quote Link to comment Share on other sites More sharing options...
Jackie2 Posted July 16, 2008 Report Share Posted July 16, 2008 LOL...don't stock up till december 21 2012. Quote Link to comment Share on other sites More sharing options...
torikid Posted July 16, 2008 Author Report Share Posted July 16, 2008 I agree with you JQ. Personally, I have cut back on cable, and extra expenses like that. I am in direct sales through parties and I deal with my downline each day who is concerned about their business and the economy. Personally, I know about the economic cycle and and just curious as to where other people think it is going. I figured it would be an interesting discussion.I have been looking through the job section of the paper lately to supplement my income during my $4k plus attorney expenses right now and have been shocked to find only 4 pages in a metro area which used to be listed as having one of the top growing job markets.I think that for those who are panicking, this would be a nice forum to calm them down and those who may feel too secure, they may think of alternate options.Your reference to Starbuck closing, etc... I agree with that also. Like with the refi boom back in the early 2000's there were so many mortgage brokers in the area that they got a bad rap. Now, in my area, there are about 1000 left in the state and 78% have left the business. God knows what they are doing now, but I thought that was an interesting stat. Quote Link to comment Share on other sites More sharing options...
J_Snow Posted July 16, 2008 Report Share Posted July 16, 2008 /*admin.hat.onFriendly reminder that Political discussions are not allowed and although this hasn't taken that turn yet, it easily could./*admin.hat.off Quote Link to comment Share on other sites More sharing options...
jq26 Posted July 16, 2008 Report Share Posted July 16, 2008 Just want to clarify- not making light at all of many people really hurting with the recent pinch. That was my beef about dropping interest rates and letting inflation run rampant. It disproportionately hurts those Americans least able to stay afloat. Gas pump and grocery store bills have soared.But with that said, for many people it just means no more $300 trip to the mall or driving the car that has a $500 monthly lease. Or (God forbid), maybe people need to clip coupons or brew their own coffee. America was living on equity built up by previous generations. But its been extracted now. This will be painful, but we had to get back to sustainability sooner or later. The original question sort of got lost- I think credit will tighten. It has to. There are no buyers of junk debt at ridiculously low levels anymore. All of that has been repriced to pennies on the dollar. So who is going to pony up for a subprime mortgage under current conditions (some investor somewhere actually funds your mortgage, car loan, home equity line, and credit card debt)? Cheap credit lent itself to easy credit and here we are. I think credit tightens up and we get back to a more normal scenario. Quote Link to comment Share on other sites More sharing options...
Jackie2 Posted July 16, 2008 Report Share Posted July 16, 2008 the trends I see coming...at least where live (upstate ny) is more conservative. I think and HOPE credit cards tighten their eligibility for the next generation's sake. I too see the want add section of the paper down to a mere fraction of what it was when I graduated high school. (less then 2 pages here). Local businesses have either closed or been bought out. I now have to travel 30 miles just to go to a department store like wal-mart. There are less jobs available and when I was trying to get a part time job (before my daughter's health got worse) I was competing with teenagers for the same silly job.Even though there is a major highway a thousand feet from my house, there isn't anything local to sustain work. My sister (has a master's degree) travels 50 miles each way for work.In my area we have lost 130,000 jobs to china. Mainly manufacturing - in the last decade. I expect that number to go even higher as Kodak, Xerox and B&L all go away and employ cheap labor overseas. Quote Link to comment Share on other sites More sharing options...
torikid Posted July 17, 2008 Author Report Share Posted July 17, 2008 That is a really interesting point. My Vietnam Veteran boss once told me that in the 70, a really low interest rate on a house was 13% plus and they were really hard to get. BK meant they cam to your house to take things. I wonder if the lax that we have been offered has much to do with it and if retightening it all again would rebuild it. I better refi this house before that happens.I know a mortgage broker who is waiting for something in 2010. He says loans will be better then. I thought that was interesting and probably a large reason for my curiosity on this thread.I am just one of those severely curious people who likes to see others opinions. Quote Link to comment Share on other sites More sharing options...
J_Snow Posted July 17, 2008 Report Share Posted July 17, 2008 My 5/1 ARM is going to reset, with the first new payment due in October. I'm getting the refi done now and locked in 6.32. It was 4.75 on the adjustable. My payment is going up $153 a month.But it will be done and I still think that is a good rate. Quote Link to comment Share on other sites More sharing options...
lovebug5 Posted July 17, 2008 Report Share Posted July 17, 2008 Driving through the suburbs of Chicago is quite depressing, actually. I've seen whole strip malls which were once full of stores now vacant. The number of homeless people in the city is on the rise. The number of people in foreclosure is staggering. The job market has gone to doo-doo. It's all really, really depressing.What's more depressing is the new 10.25% sales tax here in Chicago. The highest in the entire nation, from what I understand. That's not helping our local economy either, as no one wants to buy a damn thing...They're driving out to the suburbs instead.Politically (and this is the only comment I'm making), I'm not sure if and when things will turn around. Hopefully people will learn to manage their finances, make intelligent decisions and stay afloat until things turn. Quote Link to comment Share on other sites More sharing options...
Jackie2 Posted July 17, 2008 Report Share Posted July 17, 2008 Driving through the suburbs of Chicago is quite depressing, actually. I've seen whole strip malls which were once full of stores now vacant. The number of homeless people in the city is on the rise. The number of people in foreclosure is staggering. The job market has gone to doo-doo. It's all really, really depressing.What's more depressing is the new 10.25% sales tax here in Chicago. The highest in the entire nation, from what I understand. That's not helping our local economy either, as no one wants to buy a damn thing...They're driving out to the suburbs instead.Politically (and this is the only comment I'm making), I'm not sure if and when things will turn around. Hopefully people will learn to manage their finances, make intelligent decisions and stay afloat until things turn.I don't see how things will turn around. Northern states, like NY and Ill were once manufacturing giants. But now, all those good paying jobs are gone. What's rising in the job market is nursing...and not everyone is cut out to be a nurse.The job market has shifted and will continue to do so till the us no longer has a middle class. Instead we will have two classes. Rich and the poor. Many of the middle class are being squeezed into the poor class through job lose. The service industry cannot make up for the wages once made by the manufacturing industry.The job shift has been very bad for the USA but very good for China and Mexico...which is were all the jobs are going.How can we compete with wages in china that equals less than 1 US dollar a day? It's impossible! We can't compete which slave labor. The jobs that are left that pay well all are professional level career jobs. Middle class is doomed. Quote Link to comment Share on other sites More sharing options...
jq26 Posted July 17, 2008 Report Share Posted July 17, 2008 Middle class is doomed.I think that was the same thing people said in the 1930s when the excesses of the 1920s were being worked out. Then they said it again in the 1980s when Japan looked like they were going to crush US industry. The great thing about this country is that people are resilient and, if given the opportunity, will create new industry that you and I have not even thought of yet. That's the beauty of capitalism. Through failure we shift resources and move on. This is why bail-out nation is counterproductive. Let's take our lumps and get to work. Quote Link to comment Share on other sites More sharing options...
DocDon Posted July 17, 2008 Report Share Posted July 17, 2008 I agree with jq. We need to give ourselves more credit that we do. Doomed is a strong word. What person in their right mind would sit back and do nothing with impending doom on the horizon? All this current situation can do is bring about (positive) change, and it's up to us to do it instead of just bitching about it.We've dug ourselves out before like jq said. Quote Link to comment Share on other sites More sharing options...
tarbaby Posted July 18, 2008 Report Share Posted July 18, 2008 we will adapt just like our relatives from the past have done. ask your grandpa or great grandpa how much gas was back when he was a kid. and how much a burger was. my grandpa's always telling stories of how you could go to the movies, buy a drink, popcorn and candy for like 25cent. these days the movie alone is $9. i see signs at the local burger joint where burgers were 15cent. now they are over $3. i remember when gas was 99cent per gallon. then $2.. but we adapted to the rising cost of everything..just like we will this time. and the next time. Quote Link to comment Share on other sites More sharing options...
lyle7289 Posted July 18, 2008 Report Share Posted July 18, 2008 Yes we will Tar. But what is not happening that had happened to Grandpa is that his wages rose with the cost of everything. He recieved COLA increases or cost of living allowance. He charged more for his crops to offset cost.The economy, at least here in Michigan anyway is stagnant. It is moving nowhere. There are freezes in wage increases, people are getting layed off at an astonomical rate as well. Some people here are being forced to take pay cuts even. AxleTech has said that if these folks do not accept the pay cut, the company must close....People are forced to accept this as there is no other work out there for them. These pay cuts mind you are not small either. In some cases they are more than 35-50% !!I just do not know. I am glad to be employed and wake up everyday thanking the higher powers..... Most people can not just adapt... Quote Link to comment Share on other sites More sharing options...
torikid Posted July 18, 2008 Author Report Share Posted July 18, 2008 To the comments about never coming back... the economic cycle jobs may leave, and others are created. So things will eventually balance out one way or another, I think the question is how and how long. Quote Link to comment Share on other sites More sharing options...
Jackie2 Posted July 18, 2008 Report Share Posted July 18, 2008 To the comments about never coming back... the economic cycle jobs may leave, and others are created. So things will eventually balance out one way or another, I think the question is how and how long.the problem in upstate is there is little job creation. In my county alone, in the last decade we have actually lost residence. The population has shrunk! People have left the state for the south....where some cities are booming.What is left to fill the void from the manufacturing lose is health care. Nursing, doctors, ect...in order to get a nursing job ya need to go back to school and you need to have the right personality and be good with math.There "tech" industry here has long bottomed out. Computer related jobs are filled. The want adds of our local paper...had 8 want adds. I counted them.The jobs that are created in upstate ny are low paying service jobs...like wal-mart. Or decent paying professional jobs...like nursing and health care. The few manufacturing jobs left pay min. wage. We also have a whole other industry...apples. We are the second largest producer of apples in the nation. Too bad all those jobs went to illegal Mexicans. Quote Link to comment Share on other sites More sharing options...
momof5 Posted July 19, 2008 Report Share Posted July 19, 2008 The way life is lived (employment) is always changing. Farming went from a large number of people to being mechanized. There was a time where manufacturing and fabric mills were the staple. The country adjusted. In the 70s, we heard the same song and dance we are hearing now. It was even worse because we were supposed to run out of fossil fuels by now! (Did ya'll notice that didn't happen!?)We have been hearing for the past couple of years that this inflated bubble would burst. Too many folks wanted to "get while the gettin' was good" so the bubble was pretty big when it burst!IMHO, the shockwave has ended. We are now waiting for the dust to settle. When that happens, we will pick ourselves up, dust ourselves off and start all over again. In no time (10 or 20 yrs) the economy will be good and this will be nothing more than the same bad memory that those of us who lived through the 70s remember. Quote Link to comment Share on other sites More sharing options...
Bigwoodystyl Posted July 19, 2008 Report Share Posted July 19, 2008 I don't see how things will turn around. Northern states, like NY and Ill were once manufacturing giants. But now, all those good paying jobs are gone....Middle class is doomed.While manufacturing jobs are looking down, that is OK. Your outlook is jaded because of where you live. If the middle class can't cut it where you live, they should consider moving. The term "carpetbagger" comes to mind. It's what previous generations did, and it worked out OK for them.And, like the carpet baggers did, look to the "New South" first.There are some great jobs for people in the middle class littered all over the south right now in cities such as: Raleigh, Charlotte, Atlanta, Asheboro, Winston-Salem, Huntsville, Jacksonville, Houston, Dallas, Richmond, Reston, Also, look West, to Albuquerque, Los Alamos, Boise, Seattle, Portland....Cities such as these (and more) have long since surpassed and replaced former industrial giants Detroit, Cleveland, Pittsburgh, Buffalo...Simply because the only local news you've heard is bad doesn't mean it's that way everywhere. And, because the Northeast was the best place for your grandfather to live doesn't mean it's the best for you.Four of the best research parks in this country (and in the world) and which create hundreds of thousands of jobs are located:-Triangle Research Park-Cummings Research Park-Los Alamos Research Park-Virginia BioTechnology Research ParkSure, a lot of these jobs are more professional, but a lot of them aren't... a lot of them are in sales, and a lof of them require no experience or education with earning potential in the six figure range...Another thing to mention would be nuclear power. The need for commercial nuclear power in this country is overwhelming and is finally starting to be realized. Plans are underway for 20 commercial nuke plants, 6 of which have already broken ground, I believe.These plants will need reactor operators, and loads of them. Most of these plants will eventually hire you right out of high school (the same as manufacturing used to)... Sure, you'll have to be OK at math and science and you'll have to know how to use a wrench, but you don't have to be great. if you pass qualifying exams, they will teach you everything you need to know, and will pay you for it (which certainly beats student loans).... You start off as a "non-licensed operator" earning roughly $30-$35/hour, certainly more than any manufacturing job I know of. If you make it to "Reactor Operator" or "Senior Reactor Operator" you're looking at earning potentials of $150-$200/hour plus overtime (and there will be overtime)... People just need to shift their paradigm and let progress do the rest.Something else to note:A recession is generally accepted to be two consecutive quarters of decline in real GDP. That hasn't happened yet, not even close...It maybe would have happened had we not cut the federal funds rate 2.5 %, which created inflation instead. Picking between a short recession and 2-3 years of inflation, I would have chosen the former, but that's just me (and most economists). The Economic Stimulus Package was a huge waste of resources.But, again, this is only temporary. It's the ingenuity of the American Capitalist that will drive us out of this. (Alexis de Tocqueville predicted as much more than 170 years ago)...This creativity is stifled at a young age in other countries. for the Chinese, 1+1=2, always... Well, we said 1+1 can equal 3, and we said 1+1+1+1+1 can equal whatever the NYSE thinks it can equal (which was somtimes 119)... thus the concept of synergy as it applies to business was born and a "tower in the sky" with no legitimate base rose up, creating real jobs and wealth and tangible things like roads, schools, libraries and skyscrapers. The tower came crashing down later, but by then it didn't matter... none of the wealth was given back or transferred...This continent has always changed how the world works, from the very beginning when the English created Joint Stock Companies to harvest the riches of the Americas all the way to the corporate spin-offs of yesterday and everything in between. I won't pretend to know what's next... if I knew that, I wouldn't be posting about it, I would be buying it. Quote Link to comment Share on other sites More sharing options...
whocares Posted July 19, 2008 Report Share Posted July 19, 2008 Excellent Post, alot of good points, THanks 1 Quote Link to comment Share on other sites More sharing options...
Amerikaner83 Posted July 19, 2008 Report Share Posted July 19, 2008 woody says "go west young man".....to seattle. NO! Seattle is one of the last places around that is actually good! we don't need any damn out of staters! LOLBut you guys can all come over to Seattle - we can have a huge party! Quote Link to comment Share on other sites More sharing options...
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