Yes, it's that bad. More and more bail-outs?

C'mon, we're just in financial crisis denial. I've heard that we're headed for the "Very Great Depression".

 

It's bad. My next door neighbor, who was a very well paid exec just got laid off. People are hurting. It's sad.

 

The poor keep spending and the rich keep holding their money. Thus, rich gets richer. Never changes. It's a great time to invest on a lot of things, but if your poor. You can't do it. Thus again the rich getting richer.

 

Currently, it is not THAT bad. But all indicators are that it will get much worse. IMF Chief said the other day he doesnt anticipate recovery till 2010. Unemployment is projected to go into the double digits. Deflation fears are growing. People's retirement accounts are fractions of what they were years ago. House prices continue to fall.

Yes, it is bad.

 

I think its bad for lots of other people. My job is secure so I don't worry about it and I still have spendable cash. My retirement fund is in the crapper but I don't lose sleep over it because it will recover in the 15-20 years before I retire.

In my lifetime the 70's was the worst economy, but this one has the potential to be long lasting simply because this is the first time the economy will be reigning in credit for people with no income.

It is difficult to get a mortgage, but also the standards have been raised for new cars as well. Credit cards will follow. It will be more difficult for some douche bag with no income to go charge $50k worth of cars and gucci crap like in the past. I think those days are coming to an end. And since this is a consumer driven economy, shutting off the taps to people who spend a ton (even though they can't pay for it) has an effect.

Just the fact that they are unlikely to let someone upside down on their car by $8 grand come in with a 500 credit score and buy a new 350z on a 72 month loan should slow stuff down a bit.

 

It is really, really bad and for a lot of reasons.

-housing is in a terrible slump, and will only get worse
-banks are not lending to each other, let alone consumers and businesses
-with no access to credit, many companies cannot afford day-to-day business (commercial paper)
-the entire financial system is on the borderline of complete collapse
-the OTC derivative market is $600 trillion, larger than the GDP of the entire world (it's unregulated, and no one knows exposure levels)
-Our economy is 2/3 consumer spending, and consumers have stopped consuming
-half a million more layoffs each month

It is bad now, and it is about to get much, much worse. We are headed for a worldwide depression. There are no two ways about it. The Fed and Treasury cannot bail out the entire planet.

 

x2.

I heard an excellent quote this week by a guest on the News Hour with Jim Lehrer. With respect to the financial meltdown; "It is not a crisis within the system, but a crisis of the system."

eek.

 

It doesn't help with the stupid media talking about it every day. If they shut the hell up. I don't think it would be this bad. They made everyone who had money to spend second guess their purchases.

 

Way too many people were trying to live the American Dream but didn't have a reality check, if they could really afford to. Consumers were buying things they couldn't really afford but because credit was so easy to get, they just used their line of credits to buy things. Maybe this is a reality check that was long overdue.

 

When your neighbor gets laid off, it's a recession.

When you get laid off, it's a depression. Just wait and see how quickly your perspective can change.

The finance industry is basically shut down and is losing 10k jobs a week. The energy sector has frozen hiring completely. The automotive sector is more or less bankrupt. Some of the oldest and most prestigious banks in the world have collapsed violently. Housing has already been in a depression for 6 months. Estimates from 5-10% of GDP are tied directly to housing, are suffocating, and near the end of the trail. The picture is not much different around the world although each nation has its own issues. The EURO may not withstand this crisis. Global equity markets have already crashed faster and farther than ever before with the exception of the great depression which is arguable. That alone is an unbelievably powerful sign.

Unemployment is up significantly and gaining momentum, not losing it. The midwest is an economic black hole and places like Vegas are dead or dying. Average net worth from housing and equity market devaluations has been cut in half in the past 12-16 months for the average citizen. I'd say it's pretty bleak on a macro scale.

Whether it feels that way to you is irrelevant for the most part.