I hear a lot of panic in this Thread.
How many posters are economists?
Trust in those organizations will take a long time to be restored. First against the wall, come the revolution etc etc…
I’m not an economist, but my guess is (1), Perhaps a little worse than other recessions in the past 20 years.
In my opinion, western economies are still fundamentally sound. We’re just as good at producing goods and services as we were 2 months ago. We just need to re-adjust – by building fewer big houses and big cars, lending less money to people with poor credit, etc. Thus, this is not a situation like Zimbabwe where the productive people have been chased away or slaughtered.
The media; politicians, etc, all have an incentive to exaggerate the crisis. Banks have an incentive to freeze up credit in hopes of getting juicier government help.
Just my WAG.
Nope, people are losing money and jobs. Gas price is not the only factor in electric cars. They are cleaner and way cheaper to run. If your investments are tanking, escaping gas cost would be good.
How many economists predicted this? How many financial advisers and TV financial gurus did? What makes their opinions more reliable? They are in uncharted waters too.
I’d like to add a question, if I may: How many posters trust in economists to set things aright?
Well, my education’s in economics, although I don’t work in the field now.
I’m not panicking, of course, so maybe I don’t count.
This could get really bad. It will either turn in a few years and slowly recover or it will keep on dropping and get really ugly.
I will admit it is was past knowledge. We will servive. I may not like they way we servive but we will. I may not retire in 5 years I may have to work the rest of my life if I can find jobs. Ya I am worried.
Right now I am looking to buy an investment home. If the econnomy recovers in time I will be in a position to retire and not eat dog food. If it crashes complettely I could loos everything. But if I do nothing in one case if I retire I will only be able to stay home and watch TV, the other case I could loos everything.
No. The tarriffs were a stupid idea of course but they weren’t the primary cause of the Depression. The single biggest cause of the Depression in the US was probably the collapse of much of the banking system and the consequent contraction of the money supply. The stock market crash of 1929 was also important.
This brief article by Christina Romer a well-known economic historian gives the basic facts:
http://elsa.berkeley.edu/~cromer/great_depression.pdf
Sam, when did they EVER look good to YOU? :dubious:
OK–let me re-phrase: Are the posters in this Thread more influenced by their fears, than by a cold, calm examination of the facts?
Or are they just joining in the panic?
Is there a cold examination of the facts? All I’ve heard so far is “We’re fucked, but somehow nobody knows how fucked. As a matter of fact, all these businesses that were basing all their balance sheets can’t even tell us how fucked THEY are, much less how fucked the economy in general is.”
Are there a lot of facts out there I’m not aware of?
-Joe
Part of the problem is we allowed financial companies to operate without transparency. We do not know how much bad debt they gobbled up. They did not have to report . We do not know how much they put into swaps. They did not have to show it. We do sense that there is about 60 trillion dollars in swaps ,someplace.
Since middle class wages have been stagnate for some time and people have made up the difference with credit cards. If the credit market dries up will the income disparity between the top 10% and the middle become so obvious it will cause a massive call for wealth redistribution?
I was wondering something along these lines myself. Not the massive redistribution part, but at least what’s going to happen to Jane Everywoman and her husband, and their wacky single neighbor erislover. Are all our credit limits going to get drastically cut? Massive rise in interest rates? Or basically are we just going to lose our jobs and declare bankruptcy, effectively lowering our credit limits…
(Still think things are going to be ok, ftr.)
If your body is sick, then you go to an expert on human bodies. If the world economy is sick, then you go to an expert on economics. This is obvious. Your question, more properly focused, is about finding the economists who are knowledgeable and serious about the problems we’re facing. How can we tell the difference between an expert and a loon?
Well, having some experience in econ obviously helps with this. I’m in the same position as RickJay. My education was economics, but I’m not a pro in the field. I’m also not “panicking”. At least, not yet. There are good ideas to start the long and arduous process of repairing the global financial system. The question right now is whether the world’s finance ministers get off their asses and start with the fixing. If they do nothing, then it’ll be appropriate to panic.
If you want to start learning about the underlying causes of the problem, then it’s best to stick with simple facts. It is simply a fact that the credit markets are freezing up. It’s also a fact that a modern economy needs credit to function, which means the economy is already slowing. It’s also a fact that international trade is starting to slow, that stockpiles of food are building up at a few ports because the shippers can’t be assured of payment for their goods. It’s also a fact that if this freeze on international trade continues, we are well and truly fucked.
But it’s not a fact that things are destined to turn to hell. What’s noteworthy is how close we’re standing to the precipice. This proximity to disaster is worthy of discussion, even if we don’t believe we’re going to blithely step off the edge. After the coming recession, things will prolly turn out just fine. But we still need to talk about what happened so that we can avoid this dangerous situation in the future.
Our fellow Americans are too dumb to know when they’ve been kicked. So, no. Not even then.
:rolleyes: If by three years you mean nine months, you’re exactly right.
My prediction: I could cite this thread in 18-24 months max (probably more like 12) and we’d all have a really good laugh at how dramatic everybody was being.
But gas will be $5 by then, right?
Even these CDOs don’t have crippled income stream. There just isn’t a secondary market for them. My friends who rate the things can’t figure out why they have to keep downgrading them. They are still generating revenue and are long term investments except that because of “mark to market” rules they are valued at close to nothing.
I think it’s bad for people who took out mortgages they couldn’t afford and live off credit card debt.
Things actually seemed a lot worse from 2000 to 2003 during the dot com crash / Enron / Arthur Andersen failure. Back then it seemed like everyone was out of work and companies were actually recinding offers.
Quite frankly I’m not sure how much to even trust the media coverage as it’s starting to sound like coverage whenever there is a major storm. “Number of people killed in today’s deadly storm!! So far zero, but we expect those numbers to rise dramatically!!”