# Have we hit bottom yet? **URL:** \ **Category:** Great Debates\ **Created:** [April 3, 2009, 6:38pm UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894 "2009-04-03T18:38:59Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [April 12, 2009, 12:23am UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/41 "2009-04-12T00:23:46Z")
The banks, auditors and rating services all colluded to create this mess. They are the last people I would bailout. But the homeowners are still defaulting over and over. The foreclosures will just keep taking the banks down ,again and again. They are the root and have to be dealt with. If foreclosures stopped ,we could actually evaluate the toxic papers . We could find a bottom on housing. Without that we just keep spinning our wheels and wasting billions. ---
**Author:** ![FoieGrasIsEvil](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foiegrasisevil/32/16638_2.png) [@FoieGrasIsEvil](https://boards.straightdope.com/u/FoieGrasIsEvil)\ **Post date:** [April 12, 2009, 12:37am UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/42 "2009-04-12T00:37:17Z")
> [@gonzomax](#): > > The banks, auditors and rating services all colluded to create this mess. They are the last people I would bailout. But the homeowners are still defaulting over and over. The foreclosures will just keep taking the banks down ,again and again. They are the root and have to be dealt with. If foreclosures stopped ,we could actually evaluate the toxic papers . We could find a bottom on housing. Without that we just keep spinning our wheels and wasting billions. I don’t have a cite handy, but aren’t there scads of reputable banks that DIDN’T participate in this mess and hold notes that are by and large likely to be repaid? ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [April 12, 2009, 3:40am UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/43 "2009-04-12T03:40:47Z")
> [@DSeid](#): > > **Magiver** , as much as I may feel that the declarations of bank insolvency were premature, [these declarations](http://www.time.com/time/business/article/0,8599,1890560,00.html) also seem a bit too early to make. > > BTW, subsidyscope still needs to get its bugs out. They have GMAC warrants listed as being in the money by 86000%! (Surely it aint, is it?) Wells Fargo was never in financial trouble. They were [del]forced[/del] strongly urged into taking TARP money which resulted in the purchase of Wachovia. ---
**Author:** ![smurfslappa](https://avatars.discourse-cdn.com/v4/letter/s/5f9b8f/32.png) [@smurfslappa](https://boards.straightdope.com/u/smurfslappa)\ **Post date:** [April 12, 2009, 10:35pm UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/44 "2009-04-12T22:35:58Z")
This is nowhere near over. We still have to see the effects of all this inevitable inflation from all this money creation and then the effects from that. Also we have to see the effects of this lost purchasing power from all the lost jobs and the businesses closing because of it. The list goes on and on. You can be optimistic if you want, but I choose to be grounded firmly in reality. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [April 12, 2009, 11:15pm UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/45 "2009-04-12T23:15:58Z")
**smurfslappa** , please answer the rest of the question as well. What will tell you that we are beginning to come out the other side? What are the metrics that you will believe and why? Really, the questions of whether or not we are there yet, or will be there in 2010, or 2015, are interesting, but honestly the less compelling part of the question. I am more interested in how we decide when we have turned a corner other than the distant retrospectoscope. ---
**Author:** ![smurfslappa](https://avatars.discourse-cdn.com/v4/letter/s/5f9b8f/32.png) [@smurfslappa](https://boards.straightdope.com/u/smurfslappa)\ **Post date:** [April 12, 2009, 11:59pm UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/46 "2009-04-12T23:59:05Z")
> [@DSeid](#): > > **smurfslappa** , please answer the rest of the question as well. What will tell you that we are beginning to come out the other side? What are the metrics that you will believe and why? Really, the questions of whether or not we are there yet, or will be there in 2010, or 2015, are interesting, but honestly the less compelling part of the question. I am more interested in how we decide when we have turned a corner other than the distant retrospectoscope. I don’t think we’re coming out of this crisis with our current economic structure intact. The truth is that things are just too far gone, and the leaders are scrambling trying to figure out a solution which is not there. It was obvious that the world and mainly the US could not continue on the path of over-consumption that it was on. You can’t continue to borrow from your future to pay the debts that you have today. All the solutions for long-term success involved scaling back on spending and tightening up on credit standards, but anybody who even seriously proposed such things were hounded under the table and ridiculed. Basically it was political suicide. People loved their spending sprees so the US continued on this path until it finally caught up to us. Anybody with half a brain and a simple understanding of the world knew it was going to come to this, we all just hoped it would be later rather than sooner. Well here it is, and there’s nothing we can do about it. The system is going down, the money will soon be worthless and the government and military will be the biggest employers in the country. I am not overstating this, but many people will blow me off or say I’m a chicken little or that I’m just doom-and-glooming, they always do. You’ll know when it’s over, it won’t be some stupid news anchor telling you or some market rally. It’ll be when people are off the streets, crime is declining, our sense of entitlement is gone and we all share in the responsibility to do our part to make this country great again. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [April 12, 2009, 11:59pm UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/47 "2009-04-12T23:59:26Z")
> [@FoieGrasIsEvil](#): > > I don’t have a cite handy, but aren’t there scads of reputable banks that DIDN’T participate in this mess and hold notes that are by and large likely to be repaid? You talking numerically or size. Some local banks resisted but nearly all the big ones were involved. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [April 13, 2009, 2:01am UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/48 "2009-04-13T02:01:03Z")
> [@smurfslappa](#): > > You’ll know when it’s over, it won’t be some stupid news anchor telling you or some market rally. It’ll be when people are off the streets, crime is declining, our sense of entitlement is gone and we all share in the responsibility to do our part to make this country great again. People off the streets? When has that been before and why would that be a sign? Or do you mean declining unemployment figures - already discussed as a likely lagging indicator. Crime is down? Well national numbers are not released in real time but I checked my [local stats](http://www.chicagobreakingnews.com/2009/04/crime-down-this-year-in-chicago.html) and here at least "Crime in Chicago is down so far this year, with homicides dropping almost 21 percent for the first three months of 2009 compared with the same year-earlier period, Chicago police said … " Heck, for kicks I just checked [New York](http://www.nydailynews.com/ny_local/2009/04/08/2009-04-08_goodnews_new_york_city_crime_statistics_.html) and guess what? Yeah, crimes down … significantly. Sense of entitlement is gone. Oh that’ll be a fun one to measure. And I actually get the sense that more people are feeling that they have a share in the responsibility to make this country great again. More than I remember in my nearly 50 years. But a hard thing to measure also. So that’s what you got? ---
**Author:** ![smurfslappa](https://avatars.discourse-cdn.com/v4/letter/s/5f9b8f/32.png) [@smurfslappa](https://boards.straightdope.com/u/smurfslappa)\ **Post date:** [April 13, 2009, 2:43am UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/49 "2009-04-13T02:43:19Z")
> [@DSeid](#): > > People off the streets? When has that been before and why would that be a sign? Or do you mean declining unemployment figures - already discussed as a likely lagging indicator. Well one thing about the official unemployment figures is that they really are fudged since the government is always looking for ways to sweep problems under the carpet. They don’t count people on Medicare or Medicaid, they don’t count people that have quit working, people who had full time jobs but now work part time jobs flipping burgers, people on social security, people who are retired and so on. Social services like social security, welfare, and food stamps are doing a large part of keeping these people “off the street” and in their homes, on the couch and out of the public eye. When it gets to the point that our government can no longer create money with reckless abandon you can expect those people to step out of their homes and employ any means necessary to feed themselves and their families. This is when we will realize the true extent of the unemployment situation in the US. > [@DSeid](#): > > Crime is down? Well national numbers are not released in real time but I checked my local stats and here at least "Crime in Chicago is down so far this year, with homicides dropping almost 21 percent for the first three months of 2009 compared with the same year-earlier period, Chicago police said … " Heck, for kicks I just checked New York and guess what? Yeah, crimes down … significantly. As the economy continues to deteriorate you can surely bet that crime will increase. I don’t know what else to say about this since there’s nothing I can say about this that history already hasn’t. Basically I see a nearly complete collapse of private sector jobs coming. If you’re thinking you’re going to be surfing the internet in your home looking for economic indicators, raw data and pie charts to tell you when things are going to get better then you’re mistaken. I’m saying I don’t think things will be getting any better for a long time, and if you’re smart you’re stocking up on ammo, food and medicine. That’s what I’m doing, anyway, because it’s going to be worse than Y2K! :eek: ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [April 13, 2009, 3:12am UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/50 "2009-04-13T03:12:54Z")
Alright, we have your speculation. And your answer to when you will know it is getting better is when you feel you can run out to get more ammo without having to be have someone cover you? ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [April 13, 2009, 3:31am UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/51 "2009-04-13T03:31:49Z")
Here is what I’ve seen: The Fortune 500 insurance NYC company I work for has more or less concluded it’s layoffs several months ago. My girlfriend’s rating agency also seems to have finsihed any planned layoffs and her job rating RMBSs appears to be intact. Judging from what I have seen in NYC bars, strip clubs and restaurants, the recession hasn’t hurt their business all that much. I have a number of friends and coleagues who have been laid off. While the job market sucks, they aren’t quite ready to start selling apples in Times Square quite yet. Quite frankly, I thinks are a lot worse out in suburbia were people bought homes they couldn’t affort than they are in the city where people mostly rent. The stock market has actually been up for the past few weeks. I almost feel as if I might break even soon. > [@smurfslappa](#): > > I’m saying I don’t think things will be getting any better for a long time, and if you’re smart you’re stocking up on ammo, food and medicine. That’s what I’m doing, anyway, because it’s going to be worse than Y2K! Yes, because Y2K was not at all an overreaction.:rolleyes: ---
**Author:** ![smurfslappa](https://avatars.discourse-cdn.com/v4/letter/s/5f9b8f/32.png) [@smurfslappa](https://boards.straightdope.com/u/smurfslappa)\ **Post date:** [April 13, 2009, 3:35am UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/52 "2009-04-13T03:35:58Z")
> [@DSeid](#): > > Alright, we have your speculation. And your answer to when you will know it is getting better is when you feel you can run out to get more ammo without having to be have someone cover you? Well… yes. That sounds about right. When you can walk around safely outside once again then things will be looking up. That would be my biggest indicator. Like I said, things are going to get much worse real soon. What do you think about that? Am I just being paranoid? ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [April 13, 2009, 4:06am UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/53 "2009-04-13T04:06:40Z")
Well honestly, I am not sure that paranoid is the right word … but I am not clear which word would be. But to use your metric, I _can_ walk around safely and in the two major cities I checked it is safer now than it was same time last year. Which was honestly surprising to see. Maybe it was weather related? Meanwhile the crime stat that I can find is increasing is [online fraud](http://www.reuters.com/article/technologyNews/idUSTRE52T6ET20090330) and I doubt your ammo will help you much there. It seems that recession and crime rates have a bit of a [complex relationship.](http://www.sciam.com/article.cfm?id=do-recessions-increase-crime) > [@](#): > > “People fear that we’re headed for Armageddon,” remarks David Kennedy, director of the Crime Prevention Center at the John Jay College of Criminal Justice. > > But Kennedy and other researchers think that unemployment and financial desperation are not so inexorably linked to theft and murder. The factors that influence crime rates are far more varied and complex than any economic indicator. > > Take, for example, the Great Depression. In the years after the stock market crash of 1929, crime plummeted as well. “People sitting in their houses don’t make great targets for crime,” says Bruce Weinberg, an economist at Ohio State University. “People going out spending cash and hanging out in big crowds do.” That was especially true in the Roaring Twenties, a time that also suffered from Prohibition and its attendant crime syndicates. > > American cities have gone through two other major crime epidemics in the last century—one in the late 1960s into the early 1970s and another at the tail end of the 1980s into the early 1990s, when the nationwide murder rate hit an all-time high. The first happened at a boom time; the second struck during a recession. But in both cases, the primary underlying cause was a spike in the drug trade—heroin in the 1970s, crack cocaine in the 1990s. … ---
**Author:** ![smurfslappa](https://avatars.discourse-cdn.com/v4/letter/s/5f9b8f/32.png) [@smurfslappa](https://boards.straightdope.com/u/smurfslappa)\ **Post date:** [April 13, 2009, 4:20am UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/54 "2009-04-13T04:20:23Z")
Ah well, I guess we’ll just have to see how quickly this house of cards can come tumbling down for ourselves. But thanks for not buying up ammo and medical supplies to keep the prices down. ---
**Author:** ![Leaper](https://avatars.discourse-cdn.com/v4/letter/l/4bbf92/32.png) [@Leaper](https://boards.straightdope.com/u/Leaper)\ **Post date:** [April 13, 2009, 4:49am UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/55 "2009-04-13T04:49:19Z")
> [@DSeid](#): > > Well honestly, I am not sure that paranoid is the right word … but I am not clear which word would be. > > But to use your metric, I _can_ walk around safely and in the two major cities I checked it is safer now than it was same time last year. Which was honestly surprising to see. Maybe it was weather related? Meanwhile the crime stat that I can find is increasing is [online fraud](http://www.reuters.com/article/technologyNews/idUSTRE52T6ET20090330) and I doubt your ammo will help you much there. It seems that recession and crime rates have a bit of a [complex relationship.](http://www.sciam.com/article.cfm?id=do-recessions-increase-crime) But **smurfslappa** was predicting, as far as I can tell, a complete and utter breakdown of civilized society. I mean, even during the Great Depression, there were jobs and cities and such. **smurfslappa** seems to be talking more about 80+% unemployment (“nearly complete collapse of private sector jobs”), to be replaced by who knows what - a Mad Max wasteland? That would make it far out of the reach of your quoted article, no? ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [April 13, 2009, 1:45pm UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/56 "2009-04-13T13:45:32Z")
> [@msmith537](#): > > Quite frankly, I thinks are a lot worse out in suburbia were people bought homes they couldn’t affort than they are in the city where people mostly rent. My view from middle America suburbia. We had three houses in the neighborhood foreclosed on - all this time last year. All three had turned over and sold by Christmas and have new families in them. I have a lot of friends out of work, but many of them haven’t even outworked their severance checks yet - and then they’ll get unemployment - which won’t be a lot, but which will be something. Most of my friends who have been looking have gone from “no one is hiring” to “I have an interview” - one got hired last week. An acquaintance who almost lost his home (and raised a lot of money from friends to keep it - his partner is disabled and this is one of those people kicked in money to keep them in their specially fitted house) managed to find contract work that will keep him solvent for another year. Restaurants and stores seem to be pretty full. Stores seem to have quickly adjusted inventory levels and may have underestimated demand - Target was OUT of Easter candy Saturday afternoon. There is a lot of empty retail space - but I think that a lot of people forget that retailers going under was a two front war - they lost access to credit in September/October at the same time their revenue dipped drastically and they couldn’t make payments on existing debt. For companies that were over leveraged, it was a fatal one two punch. Its a little like maxing out your credit cards and then getting your hours cut at work. I don’t think we are done with the reset we needed to make - but I’m beginning to suspect we won’t dip far enough to actually manage the reset. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [April 13, 2009, 1:51pm UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/57 "2009-04-13T13:51:58Z")
I think one problem is that foreclosed houses out in the suburbs create far more blight than a few foreclosed condos or empty appartments in the city. A few people move out of my building, who cares? But a couple borded up houses in a neighborhood become an attractive nuisance and brings down property values for the whole neighborhood. > [@smurfslappa](#): > > Well… yes. That sounds about right. When you can walk around safely outside once again then things will be looking up. That would be my biggest indicator. Like I said, things are going to get much worse real soon. > > What do you think about that? Am I just being paranoid? I walk around outside the largest city in the country every day. WTF are you going on about? Do you have some information we don’t have that should make us think you are anything but paranoid? ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [April 13, 2009, 2:19pm UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/58 "2009-04-13T14:19:26Z")
> [@msmith537](#): > > I think one problem is that foreclosed houses out in the suburbs create far more blight than a few foreclosed condos or empty appartments in the city. A few people move out of my building, who cares? But a couple borded up houses in a neighborhood become an attractive nuisance and brings down property values for the whole neighborhood. Yeah, single family homes boarded up quickly get run down. I see more of that driving through city single family home neighborhoods than I do in the 'burbs though. The tragic thing about the housing crash was a lot of people who really should have been renters for a lot longer bought in ‘because if we don’t buy a house now, it will get priced out of us ever being able to afford a house.’ In a lot of cases they bought overpriced homes in the city on shoestring budgets - then your hours get cut at an hourly job, or gas hits $4 a gallon… I also think the age of the neighborhood makes a difference. Mine was built ten to twelve years ago - so a lot of my neighbors have been here that long. They may have been using their home as a cash machine, and that is the biggest opening for risk. But at the same time, the neighborhood age profile is just about perfect to weather the storm - few people have little kids and a lot of women who stayed home when their kids were little now have third graders and can return to work. I’m seeing that with my friends as well, who mostly have elementary age children. So the age thing is working well - they are losing jobs about the same time they are getting rid of daycare expenses - which is freeing them up for doing lower wage work while they look - work they couldn’t ‘afford’ to do if they had daycare expenses. ---
**Author:** ![Leaper](https://avatars.discourse-cdn.com/v4/letter/l/4bbf92/32.png) [@Leaper](https://boards.straightdope.com/u/Leaper)\ **Post date:** [April 13, 2009, 11:20pm UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/59 "2009-04-13T23:20:01Z")
> [@msmith537](#): > > I walk around outside the largest city in the country every day. WTF are you going on about? Do you have some information we don’t have that should make us think you are anything but paranoid? Like I said to **DSeid** , reread what he wrote. He’s not saying (necessarily) that it’s that bad NOW. He says it’s going to BECOME that bad, that the foundations of the economy are going to utterly collapse under 80+% unemployment, and that will create large scale chaos. He’s sort of danced around saying this outright (“nearly complete collapse of private sector jobs,” to quote him again), but I think I at least get what he’s thinking. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [April 14, 2009, 1:13am UTC](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894/60 "2009-04-14T01:13:36Z")
Well **Leaper** that may indeed be his prediction but he also did imply that we should look to history for models of what to expect. So going with his predictions that “[t]he system is going down, the money will soon be worthless and the government and military will be the biggest employers in the country” I’d still be curious how we’d know we were coming out the other side! And his answer is by monitoring crime rates. I still desire to test that hypothesis. The closest we’ve had to that situation in our own country’s past was the Great Depression. And as my linked cite documented, crime rates were quite low then. Prohibition was the overriding factor on crime rates and its repeal drove rates down (although organized crime went into other businesses, often behind the scenes.) It would be interesting to see if they dropped further as we recovered. Another possible historical model could be Germany during the Wiemar Republic. The hyperinflation and economic collapse was associated with an increasing crime rate, but it is hard to characterize what crime rates did on the other side as the government classified certain violent acts as not being criminal. (Damn you Godwin!) Any other historic experiments to go by? In any case I don’t think it will do for a leading indicator. 🙂 [Previous page](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894.md?page=2) [Next page](https://boards.straightdope.com/t/have-we-hit-bottom-yet/491894.md?page=4)