Economic Catastrophe or just a bit of a slowdown?

[Stirling]

We've got quite a broad geographical representation on this board. I'm wondering what people are experiencing in their own area with respect to the economy.

I'm reading that median house prices are down 50% in some areas of California, unemployment over 10% in Carolina and Michigan, and of course utter disaster on Wall Street.

But where I live (Northern Ontario) houses are still moving and in some cases prices seem to be appreciating. Are we the last place on earth that is still experiencing the bubble?

Personally I think things are going to get much, much worse. Obama and Geitner are throwing money at this thing as fast as they can print it, but nobody is borrowing and nobody is spending because they fear for their jobs. And they're spent out. Who really needs another SUV/boat/jetski/Rolls-Royce. Okay maybe the RR. With the way prices are going we'll all be able to have a few RR in the garage. But with all that liquidity out there and all the productive capacity that will no doubt be destroyed in the next few years, when social mood does turn around won't hyper-inflation run amok? What a mess. At least in Canada the government hasn't turned the spending spigot on too much. Yet.
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Stirling

www.RollsRoyceForums.com

[dclarke]

Here in New Jersey I'd say that for most of us middle class people, this really isn't much of a recession, provided you don't check your stock portfolio or ask somebody what your house is worth. I know a few people who have lost their jobs, mostly in the finance industry. I have one brother who is an entertainer and one who is a sales and marketing consultant and both of them have seen a significant reduction in revenue over the last few months. But generally it seems to me if you didn't watch TV or read the paper you'd never think there was a "crisis" going on. Yeah, you didn't get much of a raise this year and your inbox is not overflowing with job offers, but that really doesn't add up to a crisis. I've been to a couple of high-end Manhattan restaurants recently and they've been packed, even on weeknights. If the economy is so bad why are people fighting for the right to buy a $50 steak?

I won't touch your political comments other than to say I often think there's a big difference between what the media reports and reality. I suppose it's possible that this is 1935 Germany all over again and we're headed for another world war, or hyper-inflation, or other mega-catastrophe. But I doubt it.

[koenig]

Economic disaster, that will get much worse before things get better. History has shown, when real estate bubbles burst and leads into recession, they have longer deeper shelf lives. The Japanese asset price bubble that burst in 1990--well the Japanese have still not recovered!

[Stirling]

I'm in California this week. I think I'll take a drive out to Inland Empire and see what a burst housing bubble looks like.
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Stirling

www.RollsRoyceForums.com

[CaesoniaF]

[quote="Stirling"]

But where I live (Northern Ontario) houses are still moving and in some cases prices seem to be [i]appreciating[/i]. Are we the last place on earth that is still experiencing the bubble?

Personally I think things are going to get much, much worse. Obama and Geitner are throwing money at this thing as fast as they can print it, but nobody is borrowing and nobody is spending because they fear for their jobs. And they're spent out. Who really needs another SUV/boat/jetski/Rolls-Royce. Okay maybe the RR.[/quote]

I live in an area that is very isolated from these sorts of crashes. There are enough wealthy people with incredibly deep pockets - like the Kluge - and a college town economy, in spite of the fact that incomes in the area are not that high. Housing prices have been a mixed bag, and while some have dropped a small amount, parts of my neighborhood have seen appreciation. It was a relief for me, frankly, that this is the first year I have not had an appreciation on my home in the many years I have owned it.

I do think things are going to stay bad for a long time, for a variety of reasons. Partly because no one seems to have the gumption to grab all Street and just start handing out pink slips and hiring more Lee Iacoccas. You don' t get to have your big bonuses when you run a company into the ground.

A bigger reason though is because there has been really no measuremable productive private investment in the US industrial secot sicne Mr Clinton was in office. before Mr Clinton, and after Mr Clinton, investment was pouring overseas to slave labour locations without any sort of trade 'restictions' to enable smaller businesses to adapt. Wages were flat, or in decline, and under Mr Bush, there was a staggering delcine in the real wage capacity of the 30 somethings who were college educated, many of whom are saddled with massive college loans, no retirement plans, and little capacity to save.

Nor does this trend appear to be changing, and the US is starting to suffer a brain drain.

Small businesses in the US are STILL being punished, because they can't get the loans they need, and they are expected to compete on an unfair playing field. They might want to take care of their employees, but our Congress and Senate refuse to put what I call 'slave wage' and 'environmental trashing' tariffs on products coming from 3rd world countries that destroy their environment to dump their inferior products on the west. That will allow more true competition in the marketplace. Right now, there is none. You either buy it from China, or you can't find it.

I admit fully that as times have become hard, I have loosened my purse strings a bit, to snap up any bargains, and frankly, to take some revenge on businesses that wanted way too much money for their shoddy work in recent years.

That's the only way an Arnage really came onto my radar in a serious way. There is little I like out there, and if I can get something very solid with high quality to drive for a number of years, that can be maintained reasonably, I will spend the money. I think it is a lovely car inside and out, and if it can be made to work as a driver, not a garage queen, I suspect I can find one at a good buy in these difficult times.
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[B'smooth]

[bentleyman22]

From the uk
It is a little like the US the banks wont lend to small company’s so they have to layoff staff
The staff are scared to spend so shops close people are laid off
Car Company’s (Dealers) are going bust day by day more people out of work
The fuel cost over hear (£114.99 per litre of petrol)
The cost of running a home has gone mad food all so
The Government prefer to give money to global warming instead of the armed forces
In the UK last year you could get a Bentley 40% behind the Book price
At present things are holding there own but we will see
They say Europe is out off recession but the UK isn’t
My Aston cost £185000.00 2 years ago if I had to sell it I would get £70000.00
That is the drop we are taking
Homes are supposed to be holding we will see
Michael
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Bentleyman22

[B'smooth]

They say here in the US, things are getting better in some areas but it is not yet seen. Just today the housing market dropped another 10% and the banks are still not lending to small business or individuals. A lot of small companies here are hanging on some way some how. Yet there are a lot of them gone. Things will get better in a whole different way. Only the strong and straight forward business will survive BentleyMan22.
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[Gramer_gee]

[koenig]

Last week the Obama administration and the Fed et al tried promoting that foreclosure's in the U.S are begun declining. Like their pumping money is working! They ignore the non technical aspects of the economy. Thats its also a sales and marketing game. From needing to get people spending on goods. To get people to buy investments, like bonds. I grew up around the former Vancouver Stock Exchange. So know a little about the sales of stocks game. Even mortgages became overly a sales game with the marketing catch the fed can and will keep rates low. So don't worry about adjusting rates--why rent when you can own! The over educated majority of them never get rich. Even in technology the wealthiest are all university drop outs! Bernacke (sp?) and the others have no clue that whats needed is repair of the sales game. Rebuild confidence.

Truth is the banks are so busy (up 6% from same time last year) with foreclosure--they foreclose on people by accident. Those who are current on their morg and some even don't have one. Plus some areas are foregoing formal foreclosure because the market is flooded with them. Then loads of people are walking away merely because their house is worth half its value. My house will never again be worth more then the equity I borrowed. Screw it walk away! Why buy when no equity building is taking place. See its a sales game and they the professor lecture theorists types are completing ignoring that. Rebuild the Chinese wall between banks and the stock market. Wall Street is not a financial institution, reduce or eliminate online trading accounts. Turn Wall Street back into a sales tool--their bread and butter long term dividend type investments. Or stop my Dentist from organizing his schedule around his online trading! Half the stock brokers I know these days don't even know how to read a chart. They made money mostly from commissions and doing private placements, etcetera. Rebuild the sales game! Not regulate it so we are no longer capitalist. All the big brokerage firms cant survive on wealth management alone!