Who is really worried about the economy?

[deserat]

What connie said - I fear for the inflation and leveling, i.e. larger tax-bite coming our way. It seems as though the grasshoppers are bearing down relentlessly......irks me when I have forgone many perks to set up an early retirement and it may be taken away anyhow. If anything, so many of the rules and expectations regarding the rules are being drastically changed right now - some for the good, but a lot for the worse.

 

[Snidely Whiplash]

One nephew, over fifty, spent while his income was good selling condos in Ocean City, MD - sold $3 million in six months - but didn't save a dime of it. Partied and has the Lincoln Navigator, etc. He has a wife and three kids and they're just above the poverty line now. No assets, no savings, doesn't even own a home.

I am involved with real estate agents in my locale, and I dont know what it is about them, but I cant understand their logic when it comes to money.

When times were good a couple of years ago (and they were VERY good for them here) they didnt spend their extra income, or even consider saving any of it. They used the extra income to make down payments on very expensive liabilities (Hummers, foreign luxury cars, vacation homes, etc.). The real estate agents here were living VERY large with no consideration being given to the fact the good times might end at some point. How someone can work on commision, see their paydays become bigger than they have ever been, and expect the big bucks to continue forever is beyond me. You should hear them venting now about their financial situations.


PS - Please forgive my generalizing and stereotyping of real estate agents, but the above observations are so blatant across the "profession" I cant help but categorize a large majority percentage into this very foolish classification. My apologies to the few sensible agents that might be out there.

 

[mickeyd]

I am involved with real estate agents in my locale, and I don't know what it is about them, but I cant understand their logic when it comes to money.

When times were good a couple of years ago (and they were VERY good for them here) they didn't spend their extra income, or even consider saving any of it.

I've seen simular reactions to successful insurance agents and mutual funds sales folks. They do not seem to see past this week. Maybe that's what drives them to sell, sell, sell...

 

[ziggy29]

When times were good a couple of years ago (and they were VERY good for them here) they didnt spend their extra income, or even consider saving any of it. They used the extra income to make down payments on very expensive liabilities (Hummers, foreign luxury cars, vacation homes, etc.).

In reality, it's not that much different than state budgets being in surplus 2-3 years ago -- and instead of setting the money aside for a "rainy day" fund to offset future deficits, they had to go and spend and/or refund all the money -- thus guaranteeing that when the inevitable downturn in the economic cycle hits, they have no choice but to massively cut spending or raise taxes at what is probably the worst time in the economic cycle to do either.

 

[W2R]

I thought real estate agents pretty much HAVE to have a big luxury car (such as a Lincoln) to carry all their clients around and to imply to them that if they buy, they are moving towards a more luxurious lifestyle.

It seems like part of the job requirements for becoming successful at real estate sales.

 

[jug]

One, why worry?

House paid up.

Modest pension state issued

Health insurance state issued

Modest savings, good for 20-30 years.

Modest expenses, no big ticket items excite me.

Can live on a can of beans if have to.

So what is there to worry about?

No debt.

The only thing that worries me is if the local chinese restaurants go out of business, then I'm screwed.

Jug

 

[donheff]

I voted #2 but wished I could check 2 and 3. I think we are back on an up (slightly) cycle. And DW and I will be fine unless the country descends into barbarism. But I worry about the fallout when half the baby boom realize they are close to broke and can't stand working anymore. And I worry even more about the impact of the deficits down the road. That said, I still don't know whether no bailout spending would have been better or have allowed a total collapse as the vast majority of pundits predicted. Bottom line is we (Dems, Republicans, a substantial majority of America) supported some sort of massive spending driven effort at recovery -- whether we voted for Obama or McCain. WHen the chickens come home to roost on the deficit we should take some ownership and shouldn't start up a blame game. Right -- like that is going to happen

 

[FUEGO]

WHen the chickens come home to roost on the deficit we should take some ownership and shouldn't start up a blame game. Right -- like that is going to happen

If this turns out poorly, then I'd just like to go on record saying "I voted for the other guy". If it turns out well, then I'll just say I had faith in this guy all along.

 

[REWahoo]

If this turns out poorly, then I'd just like to go on record saying "I voted for the other guy". If it turns out well, then I'll just say I had faith in this guy all along.

I see you've been paying attention to the "I told you so" crowd and learned the secrets of hindcasting.

 

[mf15]

What recession. This Friday it took my son 6 hours to go from outside Philly to
Cape May NJ, the traffic was the worst that I can remember, this is normally a 2.5
hour or less trip. This of course could mean that people are staying close to home,
or since we had nice weather, they wanted to enjoy themselves at the beach.
Also on Friday night went to an upscale steak restaurant in a mall and it was full,and the mall had many people, not sure if they were buying but there was traffic.
Old Mike

 

[John Galt III]

I'll be desperately trying to figure out what to buy that will be a hedge against inflation, and hoping to figure that out before everyone else does. However, I believe that it is possible that Bernanke is right and that significant inflation is not inevitable.

 

[Tadpole]

Not being a finance guru, I can describe how the economy looks to me. It is like a process control that was poor at best in the first place was just turned off years ago. So as the process went out of control someone stepped in and, rather than bring it into control, they simply averted several explosions along the way. Each time the process was left a little closer to disaster. Then the process was left to take care of itself, still without control measures. Suddenly, the process heated up and began to run away. The janitor, noticing how hot it was becoming, started throwing the leftover ice from his soda in it each night to cool it down a little. But the effect was temporary and water was the last thing the process needed so after a minute cooling, the run away process simply accelerated during the day. I hope the plant doesn't explode but if it does I hope it explodes while that janitor is not in the building.

Unfortunately that janitor, the American people, live in the loft above the plant.

Here is why I feel this way. People like to say the "Fed" prints money. But, this time, if the Fed prints money it will be because they are filling up the air that was created by the debt in the economy. If I don't look at dollars but look at purchasing value, I see no way that the air can be made whole without taking the loss within the bubble that has no future equivalent value in one way or the other. Since we decided not to allow the losses at the point of origin of the losses and to spread it out over the entire economy, I cannot see how the purchasing power of a dollar bill can maintain the same value as it had before the economy got out of control.

I know that people will think increased productivity and other factors that can heal with time and that would be true if you believe it is possible. But any increases in the economy, IMO, will either be insufficient or too slow. The debt will be shifted without enough wage growth, US trade growth, US economic growth, etc. to accommodate the shifted debt. It will explode in the only way it can - reduced purchasing power of the US dollar.

So I think we are still bursting the 90's bubble after pouring ice on it for too long and in opposition to controlling the economy (created another sector to keep the bubble). The explosion may be slowed but the heat still cannot be removed fast enough this time. It may not explode but it will certainly will have consequences.

 

[CuppaJoe]

...started throwing the leftover ice from his soda in it each night to cool it down a little....

Yes, yes, Mrs. Lincoln, but how did you vote in the poll? Four?

Love the part about the ice, it's so hot today in many parts of the country, there will be no leftover ice even with the AC going full blast. Can't help wondering if you work in nuclear power, Tadpole.

 

[Zoocat]

Tadpole, that is a brilliant assessment and exactly my thoughts as well with the addition of the plant CEO who decides that since the plant is still producing widgets decides to ask the VP of finance to put a positive spin on things so that the company can continue to finance as much debt as possible (to the Chinese) so they can continue selling widgets and making money until the plant blows up, hopefully after working hours so nobody gets hurt.

 

[Tadpole]

Yes, yes, Mrs. Lincoln, but how did you vote in the poll? Four?

Love the part about the ice, it's so hot today in many parts of the country, there will be no leftover ice even with the AC going full blast. Can't help wondering if you work in nuclear power, Tadpole.

I voted three because "as goes your country, go you". Psychologically, I cannot bring myself to doom myself and the US entirely; call it "hope" if you must but, sometimes, I am wrong and this time all that I have is the hope that I am dead wrong and stupid to even imply such an outcome.

And, no, I don't work in the nuclear power industry.

 

[Tadpole]

Tadpole, that is a brilliant assessment and exactly my thoughts as well with the addition of the plant CEO who decides that since the plant is still producing widgets decides to ask the VP of finance to put a positive spin on things so that the company can continue to finance as much debt as possible (to the Chinese) so they can continue selling widgets and making money until the plant blows up, hopefully after working hours so nobody gets hurt.

Yes, short term thinking on the part of all parties, government/politicians, industry, and US citizens alike is the shadow in the room that no one wants to address. Sigh, I don't see anyone wanting to go back to the good old days so I guess we just will have to win and lose until risk management or something catches up with out of control desire. Embedded in many of the problems we see today was a failure of accurate assessment of long term consequences. So I use the process control analogy to suggest short term re-examination of the variables. Shocks will still occur but maybe they can be reduced in both intensity and frequency.

So, now in crisis, we thrash in the dark, still seeking those short term wins and waiting to see what happens. Brave new world or reversion to a global mean?

Part of what I wonder is whether the investment in building tomorrow's markets out of today's third world countries using a model where those economies sell back to the US backassward. Should this investment be geared to sell more outside the US to those markets? Then I realize how US centric I tend to be and hope my views are wrong/clouded.

 

[HornedToad10]

I voted 2.5 also.

I feel like the biggest problem with our economy and everything is our whole political system with private donations for running for office. WAY too much conflict of interest and unwillingness to do the right things because you have to keep your 'base/people forking over the money' happy and so all the politicians consistently make suboptimal decisions to please different masters. The politician's master shouldn't be their donors, but the citizens in their district.

Also, the people who don't want to beg for money from all their friends, family, etc and sell their soul to be elected would probably be decent politicians.

Give everyone who wants to run for all offices state level and higher X thousand/million dollars in some graduated method depending on how far in the election process we are and ban private monetary donations....

Otherwise, he who makes the biggest believable promises wins...

 

[lets-retire]

I would have voted 3, but it's closed. Until a few days ago I would have voted 2. Once cap and trade passed in the House and Franken took his Senate seat my out look took a dramatic down turn, but I don't stress over much. The wife is unable to continue working in her job, and most likely won't be able to find another one in the near future. Before cap and trade, we had the savings to take us into my next pay raise which would just cover everything. If my energy bills go up as high as expected, I can pretty much guarantee my savings won't won't last longer than a few months. I will walk from my house before I'm flat broke and start renting.

 

[NYEXPAT]

4 or 5 years ago I was a 4, but am only a 3 now. What amazes me is how close we came to meltdown (Oct 2008), have not changed anything, yet everybody in the States and Europe thinks throwing money (inflating assets) is going to do anything but postpone the day of reckoning till Dec 21,2012 (if the Mayans got it right).

 

[Meadbh]

Here's the Economist forecast: