Simple question, but probably no real single answer I realize. Is it one of those things that can only be examined in future years? Or is there a big culminating event that will signal the American economy is back-on-track?
For what it’s worth, when did the economy start going down the crapper in the first place (I’m not talking about the years it took for the financial industry to get in its terrible shape, I’m talking about when the consumers started to actually feel it)? Was it when the banks began to fail?
The easiest single answer to this is shortly after Lehman Brothers filed for bankruptcy. That was September 15th of last year. Here is a dow jones chart from wiki-
When I look to see how far I need to climb to get back in the black for my 401k it’s based around the end of Sept.
The auto companies went from a 16 million unit annual sales rate to 10 million between Sept and Oct of last year, due to the credit market collapse and general consumer unease.
The Dow is just a casino for the wealthy. It does not reflect the economy. It goes up when people are guessing that the economy has bottomed and they should buy stock. If it drops people point out how that shows the economy just dipped. MSNBC has experts talking to themselves. When a guy who says they are clueless arrives, they leap on him like he is a blasphemer, regardless of how often he correctly tells them they are wrong, have been wrong and are continuing to be wrong.
“The Dow” is an index for the NY Stock Exchange. Like all market indices, it is a forward looking indicator. People buy stocks when they think those stocks are going to increase in value in the future.
Unemployment tends to be a trailing indicator of economic conditions. Companies generally hire people when they have a demand for them, not in anticipation of future growth.
Forward looking indicator is somehow different than a den of speculation. Or do you think it is fact that when the market goes up ,the economy will follow. Sounds like MSNBC has been talking to you. Since the market has held its own the last few months, all is well.
Good question. For my part, I’ll think that we may be climbing out when I start to see inflation on the rise…that will be an indicator, of sorts. I suppose how ‘we’ will know it doesn’t suck any more is when consumer confidence starts to rebound. I doubt this will be a discrete event, however…unlike crashes, recoveries just sort of sneak up on the majority of people, IMHO.
FWIW, I don’t see any great recoveries any time soon, though I’m no economics expert. I think that the whole Toxic Debt thing is going to be an anchor over any kind of quick and easy recovery…in fact, it could be a LONG time before we get that out of our collective systems and get back on track. In my more pessimistic moments I think ‘gods, this could be just like Japan in the 80’s!’. I hope it’s not that bad, or that it doesn’t take that long to recover.
I would say all has stabalized. It’s not getting worse and will probably slowly start to get better soon. Or something else could happen and it could get worse. The market just reflects what people believe will happen in the future based on the information they have at the time. If new information comes to light, those beliefs can change.
I’d imagine that given the conduct of some of The Rich the distinction is without any practical difference for The Rest of Us ™.
Oh, wait, I forgot, it’s all because Fannie Mae/Freddie Mac gave loans to deadbeat minorities.
(The above is sarcasm, of course, but I hope it makes it easy to see how easy it is to make a sarcastic statement to marginalize someone’s point of view based on syntax.)
IMO/R, recoveries are like recessions–they’re only visible after the fact. I remember the early 90s… all the talk was about the recession until all of a sudden it wasn’t. I don’t think there’s going to be one seminal event that signals Recovery; instead, we’ll just notice that personal debt levels have leveled off and started to slowly decline and that employment figures have started to rise. If I had to pick a rah-rah moment, I’d say when the Dow hits 10,000 again… that’ll be when MSM starts to talk about things getting better.
Well, useless and barren, no. Fertile and green, maybe! (Warning: Article is completely speculative, reporting on a minor tidbit that’s been floating around for months.)
It would demonstrate greater flexibility and adaptability in the automotive sector, which would also be an indicator of more capital being freed up as people stop panicking and start investing. In the long run it would lead to a more decentralized and entrepreneurialauto industry.
Needless to say the apocalyptic imagery was hyperbole.
It’s already useless and barren. What do you think is better? Trying to maintain a city built for 200,000 people with a population of 100,000 or dismantle the dilapadated sections, let them revert back to nature and focus on a more sustainable but smaller urban area?
