A World Recession

[cheerfulgreek]

I agree, but I think trade will be a major problem. Think about it, if output and demand in United States fall, something (which we have yet to define) would happen in a recession. The results from this would be a decline in private consumption, capital spending by companies, and production would lead to a drop in imports of consumer goods, capital goods, commodities, and other raw materials. U.S. imports are other countries exports as well as an important part of their overall demand, which if effected, there would be a drop in their economic growth rates too.

The thing that kills me is how everyone is so afraid of China and Japan doing better than the U.S. I call bull on this. Several significant enonomies including Canada, China, Japan, Mexico, South Korea, and much of Southeast Asia are heavily dependent on exports to the United States. We are the worlds biggest consumers, so if our ecomomy is totally screwed, so is China's and Japan's.

[Educatingblue]

Originally Posted by cheerfulgreek

The thing that kills me is how everyone is so afraid of China and Japan doing better than the U.S. I call bull on this. Several significant enonomies including Canada, China, Japan, Mexico, South Korea, and much of Southeast Asia are heavily dependent on exports to the United States. We are the worlds biggest consumers, so if our ecomomy is totally screwed, so is China's and Japan's.

I have been wondering about this for a while now. As our national debt increases in addition to the recent mortgage crisis and now some Federal loan programs being discontinued, I wonder if European Union or Japan will surpass the U.S.

My husband and I are in the process of looking for a new house and as everyone knows it IS a buyer's market. Not surprisingly, the majority of homes we have looked at are pre-foreclosure are already in foreclosure. We looked at a nice sized house (not even 2 years old) last weekend and the owners were so desperate to make a sell, they have it listed at a ridiculously low price (3 bdrms, 2 1/2 baths, 2-story for $112,000!!).

I am very concerned about our economy and wonder how much more we will have to pay for goods and services. It will be interesting to see how some people who have gotten used to a "comfortable" lifestyle will adjust paying more for less and unable to keep up with the Jones'.

[KAPital PHINUst]

Originally Posted by Educatingblue

My husband and I are in the process of looking for a new house and as everyone knows it IS a buyer's market. Not surprisingly, the majority of homes we have looked at are pre-foreclosure are already in foreclosure. We looked at a nice sized house (not even 2 years old) last weekend and the owners were so desperate to make a sell, they have it listed at a ridiculously low price (3 bdrms, 2 1/2 baths, 2-story for $112,000!!).

Question, is the price really ridiculously low or has the price of homes in the area been historically artificially inflated?

I am very concerned about our economy and wonder how much more we will have to pay for goods and services. It will be interesting to see how some people who have gotten used to a "comfortable" lifestyle will adjust paying more for less and unable to keep up with the Jones'.

Indeed it will be.

[Educatingblue]

Originally Posted by KAPital PHINUst

[/b]

Question, is the price really ridiculously low or has the price of homes in the area been historically artificially inflated?

That is a good question. There are a few houses that are worth the price, but most homes in the north and on the west coast are definitely inflated when you can get the same thing in the south for a fraction of the cost. The best place to look for this is along the coastline or near any lake/body of water.

[sigmaceli]

I heard one of the first ways to determine a recession is to check with personal service people like manicurists and beauty shops. One of the first cut backs people will make is to stop having their nails done and getting their hair cut in longer intervals between cuts etc. I think we are headed for a recession. If people wouldn't live beyond their means, they wouldn't have all this debt. I was always told to "buy what I can afford, not what I want".

I'm a receptionist in a salon and business is SLOW...It's frightening seeing these women fear for their success this year. One manicurist is barely getting fifteen appointments a week - you can easily do 15 manicures in a day...

[Tom Earp]

I can speak from experience as I own a small business.

I get calls daily from vendors wanting to sell me items and I hear the same thing from them. They are not selling products as no one has money as the business it down.

Ripple effect isn't it?

Houses are going into foreclosure, car dealers are closing, manufactures are laying off or closing. Oh, being bought out by foriegn countrys and production being sent there.

Am I scared, you bet I am! If I close then my employee has no paycheck and cannot pay his rent.

I could pay $20.00 for 2 paper bags for food, now I pay the same amount for two plastic sacks.

Luckily, I only drive @ 4.5 miles a day so only put $20.00 worth of gas in my paid for 4 cylender car that is paid off and 9 years old.

So, are we in trouble in this great county, You bet your butt we are.

You can get your job cut tomarrow and then what are you going to do?

[cheerfulgreek]

Originally Posted by Tom Earp

Am I scared, you bet I am! If I close then my employee has no paycheck and cannot pay his rent.

I could pay $20.00 for 2 paper bags for food, now I pay the same amount for two plastic sacks.

Luckily, I only drive @ 4.5 miles a day so only put $20.00 worth of gas in my paid for 4 cylender car that is paid off and 9 years old.

So, are we in trouble in this great county, You bet your butt we are.

lol lol lol, I wish I knew why, but my God this post is making me laugh so hard.

[cheerfulgreek]

I just want to elaborate on what you said Tom, (I'm still laughing) but right now I think there's an oversupply of housing, automobiles, and other consumer goods, but since no one is buying these days, demand for these goods are less sensitive to changes in interest rates, because it takes years to work these kinds of things out. I just think right now that the United States is facing a financial crisis that goes far beyond what you were saying. I think the problem falls into areas of economic life that the Federal Government can't reach. It's bad now because the problems the U.S. economy faces are no longer just about having enough cash on hand, it's just that we're too ill equipped to deal with the problem.

[cheerfulgreek]

Originally Posted by KAPital PHINUst

[/b]

Question, is the price really ridiculously low or has the price of homes in the area been historically artificially inflated?

Actually, this may not necessarily be true, but then again it could be, but I find it hard to believe this when millions of households are on the verge of defaulting on their mortgages. 5 bucks there's probably well over 100 subprime lenders that have gone bankrupt.

[Tom Earp]

This is an avalance of major proportation.

Oil is traded in dollars and the dollar is so week, it can hardly stand up!

While it is cheaper for people outside of the US to visit, they are and are spending Billions of dollars.

So, since the dollar is in the tank, it cost more for transportation to deliver food. Food goes up in the grocers, eggs, milk, bread, meat or products similar that go to grocers or resturants, so the price goes up. To keep profits, people are laid off and have no buying power, or can spend money!

What my $20.00 bought in two big paper sacks then now get me two smaller plastic bags to bring home.

I worry where I drive and what I can do in a distance that is much shorter.

I am scared to death as I see my customer count dropping, the daily sales down and the per average costumer purchase falling. Mine is just a small business and I see feom reports that companies like Motorola, K-Mart, Old Navy and others will be closing within the next decade.

[exlurker]

Crisis of confidence in U.S. financial markets? (Bear Stearns, Fed, Morgan and others)

Scary times indeed:

http://www.nytimes.com/2008/03/17/bu...17econ.html?hp

[cheerfulgreek]

Originally Posted by exlurker

Crisis of confidence in U.S. financial markets? (Bear Stearns, Fed, Morgan and others)

Scary times indeed:

http://www.nytimes.com/2008/03/17/bu...17econ.html?hp

Great article. I'm not surprised. I remember in 2001 we recovered from a world recession, but I think it's different now, because back then the U.S. Federal Reserve, European Central Bank and the Bank of Japan all cut interest rates to virtually almost 0. I think it's far different now because the ability of Central Banks to use monetary tools to stimulate their economies and lessen the effect of a global slowdown is far more limited than it was in the past. It just seems like they're not a free as they once were, because now, it's like they're constrained by higher levels of inflation.

[preciousjeni]

Originally Posted by Educatingblue

As our national debt increases in addition to the recent mortgage crisis and now some Federal loan programs being discontinued, I wonder if European Union or Japan will surpass the U.S.

The dollar is exceedingly weak right now globally.

[KSig RC]

Originally Posted by preciousjeni

The dollar is exceedingly weak right now globally.

Context is important here - it's weak compared to its historical strength, but it's not like Lira in 1995 or anything.

[preciousjeni]

Originally Posted by KSig RC

Context is important here - it's weak compared to its historical strength, but it's not like Lira in 1995 or anything.

I don't anticipate the dollar reaching that level of worthlessness, but it is certainly sliding. Things are going to get worse for us, but we have safeguards in place to avoid another severe depression. Let's hope we, as a country, wise up and learn how to sacrifice and practice self-discipline.

Now's the time to do whatever possible to get out of debt and start saving money. I recently heard that we're about to start experiencing massive auto repos (kinda like the house foreclosures). People need to open their eyes and stop lying to themselves.