Your feeling on the economy vs. one year ago

I meant to say unemployment is down, but it will stay at a high percent and high volume for awhile. My bad.

Raw unemployment numbers don't tell the whole story. It has to be broken down. Real unemployment, which includes those working less than they need to support themselves and their families, is near 20%. Most of the losses have occurred in construction, real estate, finance and sectors associated with the housing bubble, as mentioned before. Unemployment numbers for people with college degrees is much less than those without degrees, obviously. And recent college grads (Like me!) are having a tougher time, with a recent WSJ article citing 10.5% unemployment for recent grads. I think that number actually is worse, based on the small amount of recent grads I know with decent jobs. Plus, lots of young people are back in school piling up student loans, which takes them off the official unemployment numbers.

I'm just starting in the job market, so I'll probably have different opinions about economic conditions once I learn more about how things work in this world. Hopefully this thread will be going strong a year or two from now so I can voice my opinion then (Ha!).

I feel that the economy is in a better position than it was one year ago.

But I assumed it would get better so I don't necessarily feel better about the economy than I did a year ago.

Real estate which was the biggest contributor to the problem is still in a tough spot.

Even with prices dropping, about 1/4 of all mortgages are still under water.

For those that can afford their payments and plan to stay fo a while that is not much of an issue although they don't have equity to borrow from for home repairs/improvements.

Then there are those that are still looming foreclosures.

Some cannot afford their mortgage. Some will soon be hit with a reset higher payment. Some want/need to move but can't. And refinacing is not available to these people.

This is the same as a year ago.

The catch-22 is that home values need to rise to put these folks in a better position but also home values need to drop so more people can afford to buy homes under realistic borrowing terms.

A lot of wealth has been lost. Fortunately I think people are adjusting to the new reality. Housing will still be a big issue for a while for the average person unless the banks want to re-write everyone's mortgage and write-off a ton of principle.

Flagpole:

Nice thread. Question: What is your thinking vis a vis the degree to which Chinese money is basically keeping the whole US economy afloat? Some people--my mother included; she bent my ear during yesterday's dutiful call home--think that China is going to lose patience with the dollar, and/or with continually extending credit to the US, and that things in America will get both painful and nasty when that happens. What do you think?

Thanks to Obama we're out of the 2008 W Bush Depression. Even the NaziNegger himself a Republican credited Obama with that on the radio today. But we still have no jobs and only wasteful pork being passed out to Wall St, state, county, and local gov'ts. I'd like to see that pork cancelled 100%, and a total 100% exit from Middle East / Central Asia U.S. retro imperialism.

Just last week my company had a pretty sizable layoff. Many people that I have worked with for quite awhile will be losing their jobs in the next couple of months. So right now, I'm feeling pretty down on the economy as a whole. That, of course, if strictly from personal experience.

My anecdotal evidence is in my girlfriends family business. Their furniture store is seeing a 70% increase in sales year over year. This is a furniture retail store that currently employs ~10 full time positions. Prior to the recession they had upwards of 20 total employees. Last year they were going crazy with boredom at work, now they're in a position that they're all having to work 6-7 days a week every week to meet demand. It's getting to the point that they need to hire another worker to meet demand, if only for the weekends.

kudzurunner wrote:

Flagpole:

Nice thread. Question: What is your thinking vis a vis the degree to which Chinese money is basically keeping the whole US economy afloat? Some people--my mother included; she bent my ear during yesterday's dutiful call home--think that China is going to lose patience with the dollar, and/or with continually extending credit to the US, and that things in America will get both painful and nasty when that happens. What do you think?

It's a cause for concern, but China needs to maintain decent relations with the US...we're a HUGE consumer of their stuff. However, the US can't be too arrogant about that relationship. China has refused to revalue its currency even though we have pressured them to do so. My tendency is to believe that this will be all worked out in a symbiotic matter, but as we are truly a global economy now, the US economy is certainly at the mercy at least a little bit to the whims of other countries.

Haji wrote:

Just last week my company had a pretty sizable layoff. Many people that I have worked with for quite awhile will be losing their jobs in the next couple of months. So right now, I'm feeling pretty down on the economy as a whole. That, of course, if strictly from personal experience.

Layoffs are no fun, but remember that they happen even when the economy is chugging along. Here's a more upbeat article about the state of jobs -

Not great yet of course, but slowly getting better.

Things have stabilized but I'm not very hopeful going forward. Unemployment is still very high and is underepresented by the government numbers. Without jobs and stable income it's going to be tough to keep this up. The market has had a great run but most people are still a long way from where they were before this began. I also feel the market has become rather disconnected from the economy.

People seem to forget that someone (all of us) is going to have to pay for the numerous bailouts, this is going to cause a long term drag on the economy once it does improve.

I still think it's entirely possible we see the lows again but time will tell. Whatever happens there is going to be alot of uncertainty and head fakes along the way which is going to make it tough for bulls and bears alike. In the end both sides will probably end up being right on a long enough time frame.

Year over year comparisons don't really prove anything as it looks like we are using the absolute DOW bottom level and comparing versus that level. Look back to Feb. 2008 and run comparisons for a more realistic comparisons.

My 401k is now back to my Sept. 2007 level dollarwise

My college son 2 years out of AZ State with 3.89 gpa still struggling to find full time employement in his major field.

Flagpole wrote:I'll add that the rebound has already started, that the low housing prices isnt' all bad (and in fact is mostly good) and that people without an education or in the wrong field are going to have to get educated and/or find a new field, even if that means starting over again...good employees are good employees, no matter the field.

I'm with you. My biggest concern here, though, isin't that poeple will have to change careers. It's that making the jump is going to hold a lot back for the rest of their lives.

The data's in and it already shows that the recession isin't hurting the educated or lucky. It's hurting the poor most. Recent grads are getting slammed too because they graduated folowing a period of high tuition hikes... and the jobs to pay for them aren't there.

It sucks. Even as the recovery gets underway there are going to be some very clear "losers." They ain't on Wall Street.

Mr. Price wrote:

Generally, I have good feelings. Then again, I'm not in construction or housing.

I'd say the economy is going to hold together and we're due for a rebound. The catch is, it's going to take a *long* time for housing to recover, and I'm not seeing enough movement to make up for that yet.

People wihout an education or in the wrong field are going to starve.

The economy will get better...as it always has. As long as there are sensible rules the country will be fine.

No one will starve, but there will always be a bit of pain for some.

HEY, what happen to the tread about free will??

nothing but green grass and high tides in upstate NY

We are going to have some major problems soon. Many counties and states are cutting budgets. They are having a really tough time paying for services. Add to this the housing problem and the empty commercial real estate. The jurisdictions are not getting enough revenue because of the empty spaces. That's all on a local level. People in general are afraid to spend and so are businesses. You cant blame them either because all it takes is some incident to destroy our 1 year of momentum. Things seem tentative and cautious.

On a global level we have got to be fearful of a couple of things. 1st is our status in the middle east. We are spending a ton of money on what is most likely a fruitless cause. I am all for democracy and equal rights but this is another Vietnam with a clusterf**k of an aftermath. Iran is just waiting for us to leave to assert its opinions.

2nd we owe to much money to the Chinese and when you combine this with our future social security and health care costs we are in a shit load of trouble. 3 workers in the US pay for the benefits of 1 in social security. By 2020 this will be 2 to 1. This is a tremendous burden to carry. How will we pay for all of this? Export more stuff? Buy less oil?

Next on the horizon is hyper inflation

I'd feel better if:

Hilary, Bubba, Both Bushes, Cheney (his wife) and every member of any Congressional or Senatorial Committee remotely related to control or supervision of the economy, banks and financial structure of the nation, along with Fuld, Thain, Cassano, the ex-CEO of Countrywide (Massilo sp?), the top 100 people at the Financial Products Division of AIG who got those bonuses, anyone who worked at Fannie & Freddie in the past deaces plus any wall streeter who f*cked us over yet STILL made over $100K per year in salary and bonuses were all publicly flogged, tarred, feathered then stunk in a drunk tank with a bunch of HIV-positive winos bent on rapine.

Angry? Me? HA! I don't have any children to apologize to thank the Lord. We are so screwed it's appalling.

Oh, let's throw the Fed in there too, along with that idiot congressman from N Carolina who blocked Ron Paul's legislation intended to ope the Feds books to an audit.

I wake up sweating some nights. This country is in So much TROUBLE with a capital T it's bone chilling.

Wow Flagpole! You really believe in the propaganda.

Wait until the dollar is removed as reserve currency status and lets revisit this thread. The dollar is done. It's inevitable. History has shown over and over that you can't print your way to prosperity. Anyone holding dollar denominated assets like treasuries are going to lose it all.

Charlie Munger (Buffet's partner) thinks a little differently:

http://www.slate.com/id/2245328/pagenum/all/

Real unemployment ~18%

GDP required to employ those entering workforce (150k/month) is 3%. This is not going to happen. So a PERMANENT underclass is forming

Existing home sales vs New Home sales - a yawning gap. New home sales drive recoveries in GDP. So there is no way this hole will be filled

Entitlements start ballooning in 2019. Total NPV of liabilities is US$53trn.

Long term...f@#ked....

I feel a bit better than last year, however I have both short and long term concerns. In the short run I fear that the government has not spent enough on stimulus measures that are effective (which includes their seeming reluctance to extend unemployment benefits currently). I also am concerned by efforts to balance the federal budget during this economic downturn (even if we are technically out of a recession things are still not stable enough to consider doing this).

In the long run I am concerned about the structural unemployment that has been created in our economy. A lot of jobs disappeared that may never come back, especially in manufacturing. This is likely to result in the continued diminishing of the middle class, and thus increased economic inequality. I am also concerned about the lack of regulation of our financial industry. Not only should banks that are too large to fail be either trimmed back or split up, but other regulations that have been stripped back over the last 20 years, despite having prevented such financial crises earlier in our history, should be instituted again. However these do not seem to be a priority for our representatives in Washington. If we go back to our blind faith in the free market how can we not expect to wind up in the same position we are currently in. But all of the same actors who led us down this road are still in place so my longer term faith in our economy is still shaky at best.

With all of that doom and gloom laid out, I still feel better now that at this time last year. But a lot of people seem to think we are setting up for another big round of delinquent mortgages and foreclosures.

most of the bush years saw job growth slower than population growth and then the bottom fell out of the fraud that was w's growth period. so, there are structural issues in unemployment that go beyond simply the 2007/2009 recession. Productivity advances in the 2000s were simply not passed on to the workers, in contrast to past periods of productivity growth when unions were stronger. Labor needs its power restored, as in Germany, the leading (with China) exporter, tax benefits cannot go to companies outsourcing or offshoring, and tax changes need to lead investment away from finance toward manufacturing. That being said, there is no comparison between now and last year in the economy. The economy has done a 180 and we all know that unemployment typically takes years to fall significantly after a recession.