Happy Meltdown

[Oleander Ardens]

So how are you feeling today?

Recession:

US already in one, possibly since the 2. quarter

EU, some countries already in one, the British (build the boom on bubbles), the Spanish and Irish with their building boom, the Baltics, Italians (terrible economy made even more terrible), while the Germans and French might join.

Asia: Japan might also go under, Korea as well, China and rest have a far slower growth.

So unemployment goes up, earnings down, credit becomes credit once more.

Stock markets:

Carnage seems to be an euphemism. Never have the world markets as a whole fallen so much as in this year. Only 1929-1932 and 1937-1942 the fall was deeper, but it took 3-5 years to find a bottom.


Care to add to that list?

[Fragony]

All fine and dandy here.

For you Americans, how 'visible' is it, and how does it affect you?

[KukriKhan]

All fine and dandy here.

For you Americans, how 'visible' is it, and how does it affect you?

It's 'visible' mostly on the TV and radio, where the talking heads are losing their minds. :)

After 'earning' $2,400 in compound interest since January in my retirement stock fund, I 'lost' $2,200 in the final 2 weeks of September. So I moved the balance into the so-called G-fund (gov't securities, which earn a mere 3% per quarter).

Net effect: I'm still a tiny bit better off than I was in January 2008 - and I'm contributing to the decline in stock price worth (having removed all my assets from there). And my pipe-dream of retiring next year has gone up in smoke; I'll be working until age 67, at least (10 more years).

If I had loose cash just laying around, now would be a good time to buy individual stocks in companies that make consumeables (food, beer, cigarettes) - but I don't. There are also some pretty good deals on foreclosed real estate in my town. But I don't need another house, and mortgages are harder to come by now without a 30% down-payment.

[rvg]

Let it all crash and burn. The corporations who got steered into bankruptcy by their CEOs should be allowed to fail and disintegrate. Hopefully, something better will arise from the ashes.

[Fragony]

So in the end there isn't really anything, groceries still same price for example? They are here, house market is shrinking but not falling, nothing is happening, sky doesn't fall nothing got blown up, it's business as usual in every way. I have tried understanding what we are really facing but there is too much information and most of all too many experts with contradicting statements. As for now I am lost on how terrible all this is supposed to be, what is it so extremely important about something that can crash without really affecting anything.

[rvg]

So in the end there isn't really anything, groceries still same price for example? They are here, house market is shrinking but not falling, nothing is happening, sky doesn't fall nothing got blown up, it's business as usual in every way. I have tried understanding what we are really facing but there is too much information and most of all too many experts with contradicting statements. As for now I am lost on how terrible all this is supposed to be, what is it so extremely important about something that can crash without really affecting anything.

Falling oil prices are definitely softening the pain from recession.

[Ser Clegane]

what is it so extremely important about something that can crash without really affecting anything.

Well - at lot of people in the financial sector are already losing their jobs (and no - these are not only people who made oodles of money anyway).
Due to the overall uncertainty companies and people in general are pushing back larger investments/purchases, e.g. you will see less people willing to build a new house or buy a new car right now (same goes for medium-sized investments like e.g, a new TV or dishwasher).
The automotive industry is typically one of the first to be affected - usually very dramatically at the beginning of a downturn. Lower sales and production of cars means loss of job in the automotive industry and it also has an effect on more basic industries like metals or chemicals (AFAIK the chemical major BASF makes ~15% of its business with the automotive industry).
Again - loss of jobs in these industries. Typically you will see these ripple effects going through various industries and due to the global nature of business also across regions (Wal-Mart actually sources quite a lot of stuff from China)

Unfortunately it seems that the financial crisis created such a fear of a real recession, that this fear is enough to actually kick-start this recession.

[KukriKhan]

Groceries generally are up about 5% here, led mostly by produce (fruits and veggies), which around here used to rely on cheap migrant labor to harvest. That cheap migrant labor has mostly left town now, following the money to meat-packing plants further east.

My town has 47,000 housing units, of which, by last week's report 1,700 are in some stage of foreclosure - the residents/mortgage payers having just walked away and left town when their payments rose from $800 per month to $4,000. The city gov't is starting to send cleanup crews to those places, trying to slow the decline of house value in the neighborhoods. The 'experts' say to expect more of the same for about a year, and that jobs will get harder to find/keep, as small business owners can't get lines of credit to pay employees.

Luxury items are going unsold. Our local Lincoln dealer closed this week, after 40 years in the same spot. No one was buying their SUVs.

Politically, on our local level, we're voting next month on a dozen or so measures that will all cost additional money. The prevailing sentiment I hear is: "You want to spend more money in this economy?" I predict any measure costing us money will get defeated this year, even if it's for schools or roads or hospitals.

In short, people around here are worried, but not afraid yet - and certainly not panicking yet.

[Fragony]

But you guys have a pretty much self-sufficient economy. Here we are so terribly overstretched, the Netherlands may be a major economic power but it obviously hasn't got enough land to feed 16 million people. That is a bit scary.

[rvg]

But you guys have a pretty much self-sufficient economy. Here we are so terribly overstretched, the Netherlands may be a major economic power but it obviously hasn't got enough land to feed 16 million people. That is a bit scary.

As long as we have enough fuel we are okay.

[Fragony]

As long as we have enough fuel we are okay.

We are not, we are the most crowded country in the world, and on top of that one of the smallest. I am not expecting it, but in case of a real crisis you have a much better chance. Here we are left with nothing, we are a healthy economy without any base. We can't feed ourselves, that is impossible we would have to be at least 10 times bigger then we are. Worst scenario so far. But nothing happens here, seems like we have a really good base. Good at being small.

[drone]

It's not too bad here yet. County governments are cutting back, so over the next year schools/police/fire and other maintenance issues are going to suffer. I'm thinking we won't see real pain for another 3-6 months. Once Christmas passes, I'm thinking a lot of places, especially retail, are going to shut down.

The housing market is sane again. Foreclosures in some counties are up, but not out of control yet. Prices have dropped some, and home sales actually picked up in Prince William Co. due to the price decline. It will be interesting to see what happens after the election. There is usually some turnover in the area when new administration moves in.

[Strike For The South]

Here the city is begging people to come work. It is a rather odd situation. Then again the economy here is the uni and agriculture so we they really aren't affected. Back at the grocery store Dad says people are having some fuax outrage but food is still relatively stable minus the things that fluctuates just because not to mention HEB is privately held so no one is worried about there job.

[Caius]

Argentina DELETED, DESTROYED, ERASED, and STOLEN 95 billon pesos in private retirements. They deleted the AFJP system, which is the private system of retirements and FORCES YOU to change to the Statal system of retirements, which doesn't accept what you gave to them. Thanks to that ***** that is Cristina Fernandez de Kirchner, we made the Spanish market sink. and whats the funny part of it? Their claim is:

"We are stopping them because they won't be able to give you the retirement money you invested in them, that's why we are closing this system"

Which is a lie, because AFJP are market investors. Right now, they aren't doing fine, but when better times come, they will be better again.

We feel ok, we are happy to see the consecuences, as we think this will stop the inflation, which is estimated to be in a 35% but the STATE LIES to the people and denies it, giving numers of 10%. Everyone claimed to not to fire employees, but there are 500 employees now without job.

Soy prices also went very very down, and the new system of "steal-the-farmer-because-we-are-friends-of-Hugo-Chavez-we-need-more-money-we-are-socialists-and-montoneros-we-are-the-only-ones-who-can-win-a-lot-of-money" is going to fail. Until prices of soy rise again like they did like the last year... they win a lot less of money. This mean that they won't be able to manipulate poor people (they are failed socialists, they can't manipulate their minds unless they give them money: 150 pesos, when an average family needs 800 for eating), and they won't have people to assist to their acts (like the soviet parades in Soviet Russia, but they difference is that they don't manipulate all the population, not yet)

This is how we are doing now. Fine, life goes on here. We have suffered so many things that this is something else without relevance.

[Alexanderofmacedon]

The stock market is down, but it's not the only thing that shows of bad economic conditions. Unemployment rates, inflation etc. also contribute, but I must say those are horrific as well.

As Americans, we're going to have to learn to live within our means. Or perish.

[spmetla]

As a student the only affect I see so far are in my simulated stocks (all of which have tanks severly) and the change in prices for the goods I buy. Next year when I begin seriously looking for a job I think I'll find that the high rate of unemployment will make finding good employment difficult for me.

[CountArach]

I'm not personally worried for myself, but I am worried about my father losing his job (I know he was going to be put on redundancy at one point, but I think he is fine for the moment).

Oh, and Australia is going to go into recession. So much of our economy relies on exporting raw materials to China and as they slow down, so does our economy. We also have indredibly poor infrastructure, thanks to 11 years of Conservative rule that had the mentality of "Government = Bad, Pork Barelling and Tax Cuts = Good".

[AlexanderSextus]

All fine and dandy here.

For you Americans, how 'visible' is it, and how does it affect you?

Visible enough to make me want to move to where you are.

[Fragony]

Visible enough to make me want to move to where you are.

Could you elaborate please? I hear a lot of horror story's but the dutch media is currently slipping of their chair with socialist triumph, and has always been violently anti-american so I don't take their word for it.

[Kagemusha]

I really have not seen the effects here yet, other then that the government has started preparing to support banks with tax payers money if necessary and also it has raised the bar of guarantees for individual bank accounts, but not a single bank has yet to ask for government support. Other then that because of the age distribution of Finnish citizenry, the country is preparing for possible shortage of labour, rather then unemployment, because large age groups of citizens are about to retire and filling the void that will cause, might be problematic.

[Guildenstern]

Italy has always been very weak economically and the world economic crisis is directly affecting we little people. Unicredit, which is Italy's second biggest bank, has had great problems. The Italian cabinet held an emergency meeting and Prime Minister Berlusconi claims those problems have now been resolved. Italy has also upped depositors insurance to €103,000. However, the financial storm is going to hit the country really hard because Italy has one of the poorest economies, one of the largest trade deficits and one of the lowest GDPs in Europe. Since the end of WWII the country has had an abysmal growth record and a multitude of unstable governments. Italy is also a net food importer and imports something like 85% of its energy.

Italian growth ended abruptly in the mid 60s, since then there have been numerous recessions and financial difficulties. The GDP has always been amongst the lowest since then and Italian salaries are close to being at the bottom of the list for developed countries. Corruption has been, and still is, endemic and the tax burden is amongst the highest of the developed world. The ratio of wages to cost of living makes Italy an expensive place to live. In some respects people living near the borders are better off as they can look for work easily in a neighbouring country. Take for example the mass exodus every morning of Italians to France and Monaco. Italy also has one of the highest percentages in the top 30 developed countries of people moving abroad to find work.

Italy is very far from being self sufficient, most materials for manufacturing have to be imported and the Italians banks exposure to toxic debt is high as illustrated by Unicredit. I think the only country that hasn't got any real exposure is France. Recently a lot of large Italian banks have been taken over by foreign banks such as Paribas, Credit Agricole and Santander. Before the takeovers and mergers Italy's banks, compared to its European neighbours, were small in size. For a long time Italian banks were the political plaything of the politicians giving patronage. Overstaffed and inefficient with the government heavily subsidizing them.

Italy's national debt is above 100% of gdp. The unions also still have a firm grip in Italy as seen by the fiasco with Alitalia and the U turns that had to be made regarding pension reforms. The Italian housing market has never been what one would describe as on fire. House prices have been slow to rise and slow to fall.

[AlexanderSextus]

Could you elaborate please? I hear a lot of horror story's but the dutch media is currently slipping of their chair with socialist triumph, and has always been violently anti-american so I don't take their word for it.

When i was 12, a snickers bar was $.65...now its $1.00... Note that it used to be old people that complained "i remember when (something) costed $.50 now it's $2.00" its only been 7 years and i'm already noticing prices going up way faster than they ever did before. People are losing their houses, it's getting harder to keep the bills paid, Taxes just keep going up...

It sucks!

[LittleGrizzly]

That doesn't seem too much to me, in my lifetime i have experienced price shifts as well, when i was a kid petrol was 50 odd pence a litre and coca cola was 30p a can, now its closer to a £1.10 for petrol and moe like 55p to 60p a can, say in about the last 10 years, what it really depends on his how wages rose in comparison....

I would say part of what seems to be prices going up quickly its just the fact that they have a higher starting price so a small percentage increase will seem alot more than the same percentage increase off a lower starting price 50 years ago....

[Samurai Waki]

I need to move to Africa and work in Telecommunications. Other than that, everything else seems to be going well on the home front, I'm really glad I have plenty of extra funds, though the price of everything here is going through the roof. literally.

[SwordsMaster]

I need to move to Africa and work in Telecommunications. Other than that, everything else seems to be going well on the home front, I'm really glad I have plenty of extra funds, though the price of everything here is going through the roof. literally.

Heh, been there, done that.

So there must be a lot of Manhattan apartments going empty, right? I mean, all those wallstreeters losing jobs and all.

What's the going price for a 2 bedroom in Manhattan these days?

Or even better what kind of mortgage can one expect to get on a house somewhere nice-ish?

[Louis VI the Fat]

When i was 12, a snickers bar was $.65...now its $1.00...


It sucks!

Luxury.

When I was young, I didn't have any Snickers bars. All I had were courgettes. Which I had to steal from the nearest farmer. Just to have something to eat. Every day I got up at 4:30 and walked three hours. And three hours back. In the rain, in the storm, in the blistering heat. It was hell.

This was in the old days. Back in 2006.

Then I decided to get a job and just buy them in the Supermarket.

[Strike For The South]

Luxury.

When I was young, I didn't have any Snickers bars. All I had were courgettes. Which I had to steal from the nearest farmer. Just to have something to eat. Every day I got up at 4:30 and walked three hours. And three hours back. In the rain, in the storm, in the blistering heat. It was hell.

This was in the old days. Back in 2006.

Then I decided to get a job and just buy them in the Supermarket.

Pfft. In America you have a job and still have to steal!

[Samurai Waki]

Heh, been there, done that.

So there must be a lot of Manhattan apartments going empty, right? I mean, all those wallstreeters losing jobs and all.

What's the going price for a 2 bedroom in Manhattan these days?

Or even better what kind of mortgage can one expect to get on a house somewhere nice-ish?

Well any type of loan is 30% Down Payment these days, so irregardless of what your getting your Mortgage rate will vary wildly from state to state if you can even afford the initial expected amount to pay. Montana is smooth(ish) compared to say Washington right now, which is about 4 % interest versus Washington's which is at about 7.5% Interest. To soften the blow, I've seen a few houses around that were 300,000+ $ a year or two ago that are now only maybe half what their original value is, so if you can afford it you're literally getting away with murder.

I'm not an East Coaster, but in the way of Manhattan I would probably expect little to change, I mean after all it is Manhattan, lots of guys from the Economically far more successful west to fill those apartments rapidly.

[Oleander Ardens]

Personally I'm rather happy that stocks came down so much. So many great buying bargains now. This crisis is good for people with a sound balance sheet and even better for those who have large savings or are still young and want to buy their first house. Let us hope that jobless rate doesn't climb up so high. 150000$ for a standard house seems dirt cheap to me, but then I come from a region with one of the highest housing prices of the world.

And yes credit comes form credere and creditum - not from sperare or orare...

Hopefully most Orgahs are able to wither the credit crunch and the recession.