Worse case scenario

[Rick336]

Anybody that's been paying attention to the news this week knows that people are getting very concerned about the economy. The stock market on Wall Street dropped 950 points since Monday and banks and financial institutions are failing. The future market looks dim and lots of people are getting very frightened about what's going to happen.

This news has vastly overshadowed the news about the devastation of Hurricane Ike and news about the presidential campaign. And chances are, we're going to hear a lot more about it in the next few days. What we could be looking at here is a depression of the global financial market.

There's the chance that a huge downturn might not happen at all. This might just be a correction on the financial market. Hopefully that's all it is. But I think we need to prepare ourselves in case it's not.

I'm not an expert of any of this. But I do know that in the Great Depression of the 1930s there was massive unemployment, massive home foreclosures, bank closures, inflation, business failures, and poverty on a large scale.

So, what if it really happens? Will we survive? Yes. We absolutely will. If the worse case scenario actually does happen, it won't be the end of the world. It could be rough for us for a short time, but we will pull together like we always do and come back strong. This world has survived a lot worse stuff over the past century and there's no reason to believe that we won't survive this.

I'll be 57 years old next week and if there's one thing I've learned in my fifty-seven years it's that sometimes life is tough. But no matter how bad it gets, it always gets better. Always. That philosophy has never failed me yet.

Hopefully, by this time next month this crisis will be behind us and we won't give it another thought. But if by chance the news does keep getting worse and people around you are getting scared, just keep in mind that no matter what happens, it's only temporary. The market will bounce back in no time, the economy will be buzzing again, and the news will be about Olympic swimmers breaking records, the new fall TV schedule, and lipstick on farm animals. :D


Besides, no matter what, we'll all be here for one another. :love:

Rick

[Northern_Imager]

Thanks for the good words. I hope you're right about it being only a correction. But look on whose watch all this economic chaos has occurred- those laissez-fair Republicans! :eek:

[RedneckDyke]

One of my favorite song lines in from Alabama's "Song of the South". It goes, "Somebody told us Wall Street fell. But we were so poor that we couldn't tell."

There are a lot of people out there who can't afford to put gas the car or buy groceries and that don't much care if Freddy and Fanny and AIG and some other big company goes under.

Anyway, we'll be ok. I think.:)

[Rick336]

One of my favorite song lines in from Alabama's "Song of the South". It goes, "Somebody told us Wall Street fell. But we were so poor that we couldn't tell."

Now I got that song going through my head. "Sweet potato pie and shut my mouth." :)

Rick

[inca nitta]

Rick336,

You seem like a very optimistic and positively minded person. I agree with you that we are not ever NEAR the Great Depression of the 1930s, and even though our economy is faltering, we will be okay, and eventually, we will recover, like we always did. Remember, in 2000 our economy went into recession, but by 2003, it quadrupled in growing. I think we are just in one of those cycle periods, now.

I still don't understand why some people and organizations, like AFL-CIO, tend to make such exaggerated claims?

[u-dog]

Rick336,

You seem like a very optimistic and positively minded person. I agree with you that we are not ever NEAR the Great Depression of the 1930s, and even though our economy is faltering, we will be okay, and eventually, we will recover, like we always did. Remember, in 2000 our economy went into recession, but by 2003, it quadrupled in growing. I think we are just in one of those cycle periods, now.

I still don't understand why some people and organizations, like AFL-CIO, tend to make such exaggerated claims?


I too would like to think that we are not on the verge of falling into some economic cataclysm --- and perhaps we will just teeter here for a year and then regain our balance. But to say that this is just some part of the mysterious business cycle is wishful thinking. Major financial institutions are falling like dominoes and our national economic and political leaders are running around like chickens with their heads cut off, spending gazillions of dollars in the hopes of staunching the bleeding. Maybe their actions will work... but they may not.

Also, this crisis didn't happen because of the normal business cycle. It happened because regulators weren't paying attention to horrendous misconduct and greed motivated bad practices. The reason the regulators weren't paying attention is because of the Republican administration that has been in office for the last 8 years and their laisez-faire economic philosophies that have been in vogue for the last 30 years.

It was those SAME philosophies that laid the groundwork for the Great Depression of the 1930's. It was the new Deal programs and philosophies of Roosevelt and the democrats that saved the day and kept America from falling into Communism. It will be democrats with a philosophy of regulated capitalism that will save the day AGAIN.

U-dog

[Daniel]

Anybody that's been paying attention to the news this week knows that people are getting very concerned about the economy. The stock market on Wall Street dropped 950 points since Monday and banks and financial institutions are failing. The future market looks dim and lots of people are getting very frightened about what's going to happen.

This news has vastly overshadowed the news about the devastation of Hurricane Ike and news about the presidential campaign. And chances are, we're going to hear a lot more about it in the next few days. What we could be looking at here is a depression of the global financial market.

There's the chance that a huge downturn might not happen at all. This might just be a correction on the financial market. Hopefully that's all it is. But I think we need to prepare ourselves in case it's not.


I have read articles noting the global, as well as the local, effect. Only yesterday, there was an article in our paper here about how the downturn in the markets will affect the local economy. Because of the current losses (and more are expected to come), there is going to be a huge loss of revenue. And there is a short-fall at the local and state level already. Of course, this doesn't just affect NY, but NJ and CT as well.

Banks are intertwined around the world, so what happens here, happens everywhere. And the buyout that is being engineered means that you and I are going to pay for it- dearly. And we are already paying for the cost of two wars. Not a very pretty picture. So- yeah- I think the impact is going to be significant. It may not amount to a depression, but I think we are already in a significant- and long term- recession.

My own observation is that 8 years of policies favoring de-regulation have taken their tool. The foxes- as it were- were guarding the hen-house. The housing market led investors and banks to get greedy. And there was nothing to stop them. Bad loans and balloon payments resulted.

Here are two article of interest.

http://www.nytimes.com/2008/09/19/nyregion/19unemployed.html?_r=1&hp&oref=slogin

http://www.nytimes.com/2008/09/19/business/economy/19econ.html?ref=business


“We have moved into a decline in consumer spending, which normally happens only in a major recession."

And for those interested, here is a time-line on how recent events unfolded.

http://www.nytimes.com/interactive/2008/09/15/business/20080915_TURMOIL_TIMELINE.html

Lastly, a personal story on the crash.

http://www.nytimes.com/2008/09/19/opinion/19baris.html

[Steven E. Webster]

I'm not an expert of any of this. But I do know that in the Great Depression of the 1930s there was massive unemployment, massive home foreclosures, bank closures, inflation, business failures, and poverty on a large scale.

So, what if it really happens? Will we survive? Yes. We absolutely will. If the worse case scenario actually does happen, it won't be the end of the world. It could be rough for us for a short time, but we will pull together like we always do and come back strong. This world has survived a lot worse stuff over the past century and there's no reason to believe that we won't survive this.

I'll be 57 years old next week and if there's one thing I've learned in my fifty-seven years it's that sometimes life is tough. But no matter how bad it gets, it always gets better. Always. That philosophy has never failed me yet.

Hopefully, by this time next month this crisis will be behind us and we won't give it another thought. But if by chance the news does keep getting worse and people around you are getting scared, just keep in mind that no matter what happens, it's only temporary. The market will bounce back in no time, the economy will be buzzing again, and the news will be about Olympic swimmers breaking records, the new fall TV schedule, and lipstick on farm animals. :D


Besides, no matter what, we'll all be here for one another. :love:

Rick

Rick,
I, like you, am 57 years old. That means that neither of us was alive during the last Great Depression, but we grew up hearing our parents and grandparents talk a great deal about it. That financial crisis lasted a decade and was only really ended by the massive spending associated World War II and the drafting of most men under the age of 45 into the armed forces.

Besides the consequences of the "housing bubble" and financial misdeeds in the markets, we face dislocations due to global warming, reaching the point of "peak oil" and the end of cheap fossil fuels, population crisis, wars, terrorism etc.

I don't think I'm as optimistic as you are, but I do see the wisdom of Jesus' teaching about not worrying about tomorrow when we've got quite enough trouble today. Worry, alone, will not do us any good.

I'm listening to the News Hour on public TV right now. One fellow is pointing out that one big difference between now and 1930 is that we DO believe in government intervention to rescue the markets. But who is paying for these big bailouts--the U.S. taxpayer. Will we raise taxes on the poor and middle class? Or will we return to more progressive taxation? Will those who have accumulated such great wealth in the run up to this disaster finally have to foot the bill?

I think it's time to reject the Reaganomics of the GOP and return to a more Democratic economy.

Steven Webster

[inca nitta]

Also, I would like to say to everybody from economics perspective, or to be specific, something I learned from my Economics 101 class, political party, regardless of whether it is Republican or Democrat, has very little to do with or no bearing on the development of economy. It is always about how wisely the companies are using and spending their money for themselves and for the people.

The real reason for faltering economy is people's excessive greed.

Also, I understand that some people think that it was mainly FDR and his New Deal that pulled us out of the Great Depression, but the fact is that the New Deal helped us very little. It was mainly our Lend Lease program that we developed during World War II, and then our subsequent entrance as Allies into the war, which made us the superpower, and thus brought us an economic prosperity.

[Matt Algren]

The real reason for faltering economy is people's excessive greed.I wouldn't call people wanting to own a home 'greedy', especially after they've been assured by lenders who do this all the time that they'll easily be able to pay the mortgage and supply convincing charts and case studies and everything.

That's not 'greedy', that's 'taken advantage of'. I know this is a talking points for the Republican party, but it just doesn't work when you apply a little logic to it.

[inca nitta]

Sure, it is not greed to want to own a house, or want to buy an nice looking car, generally speaking. However, when you want these things knowing that your income cannot cover it, it sounds like a greed to me. Greed is also when people borrow too much money and refuse to pay that money back.

Likewise, lendors who promise people things they cannot provide, while making money for themselves, are also being greedy.

So, there you go.

[u-dog]

Also, I understand that some people think that it was mainly FDR and his New Deal that pulled us out of the Great Depression, but the fact is that the New Deal helped us very little. It was mainly our Lend Lease program that we developed during World War II, and then our subsequent entrance as Allies into the war, which made us the superpower, and thus brought us an economic prosperity.

In point of historical fact, Inca, it was both. But the primary contribution of FDR and the New Deal was that it prevented the US of A from going either Communist or Fascist as a result of the Depression. FDR's leadership and the many programs of the New Deal gave people hope and sense that the whole country was pulling together and facing adversity together.

Neo-con Republican revisionist history notwithstanding, FDR and the Democratic Party saved America as a democratic, capitalist country.

[inca nitta]

Of course, FDR was a hope to many Americans, but only from a sociopolitical perspective, not much from economical one.

Neo-con Republican revisionist history notwithstanding FDR and the Democratic Party saved America as a democratic, capitalist country.

So, what are you saying? That Republicans have saved America by making it more capitalist?

[u-dog]

Of course, FDR was a hope to many Americans, but only from a sociopolitical perspective, not much from economical one.



So, what are you saying? That Republicans have saved America by making it more capitalist?


What I mean is that for 60 years the Republican Party and their fat cat capitalists members have been pissing and moaning about FDR and fussing about how he was a "socialist" blah blah blah when the fact is that it was FDR that saved this country as both a democracy AND as a capitalist country. America could easily have gone down the road of Fascism OR Communism depending upon which ideology was able to raise up a charismatic leader.

[inca nitta]

oh, okay.

thanks for clarifying.

[sauu4equality]

America could easily have gone down the road of Fascism OR Communism depending upon which ideology was able to raise up a charismatic leader.

http://www.foxnews.com/images/299305/0_61_palin_sarah.jpg

[Matt Algren]

http://www.foxnews.com/images/299305/0_61_palin_sarah.jpg
I've been saying it for weeks. Sarah, when you're already being compared to fascists, you need to wave different!

[Ningmom]

Wonder if she waves at Putin that way from across the "lake"?

[sarahbina]

I wouldn't call people wanting to own a home 'greedy', especially after they've been assured by lenders who do this all the time that they'll easily be able to pay the mortgage and supply convincing charts and case studies and everything.

That's not 'greedy', that's 'taken advantage of'. I know this is a talking points for the Republican party, but it just doesn't work when you apply a little logic to it.
Quote:
Originally Posted by inca nitta View Post
The real reason for faltering economy is people's excessive greed.

I wouldn't call people wanting to own a home 'greedy', especially after they've been assured by lenders who do this all the time that they'll easily be able to pay the mortgage and supply convincing charts and case studies and everything.

That's not 'greedy', that's 'taken advantage of'. I know this is a talking points for the Republican party, but it just doesn't work when you apply a little logic to it.
____________

Inca Nitta, I agree, it is greed for materialism to excess, not for obtaining necessities like Matt notes, that is the cause of this financial crises. Lenders (displaying their greed for profit) made loans too big for many people to handle. I'm not pointing a finger exclusively at financial institutions. It is all of man's greed - so many people taking so much more than needed that leaves the whole system out of balance. We are out of balance with nature. And these economic systems fueled by greed aren't sustainable. I have read some interesting articles about how our being out of sync with the plan of creation is manifesting in the economic crisis in the US. Can we aviod a recession? (http://www.laitman.com/2008/11/can-we-avoid-a-recession/) and what caused the financial crisis? (http://www.laitman.com/2008/10/what-caused-the-current-financial-crisis/).

[CaptainSnoopy]

I've been pretty smart with my money. We live below our means and have almost zero credit debt save the mortgage and a small balance on the visa from when I had to buy a laptop and repair the car the same month.

We have enough liquid assets to last about 8 months without any income and from there there are other avenues available. However, the same cannot be said of my neighbors. My daughter's best friend's mom just had her hours cut back to the tune of $400 less a month. She has no idea how she will keep the house. She is one story of many that I see and know of.

It hurts to watch and I pray that it gets fixed soon.

Maybe it was greed that put some in the circumstances they are in...maybe it was greed and bad decisions that toppled wall street. I dunno. I will worry about blame after my neighbors are not facing homelessness and a winter without heat.