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State of the Economy for Dummies aka Me
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Author:  LadyKate [ Mon Nov 29, 2010 12:57 pm ]
Post subject:  State of the Economy for Dummies aka Me
So, can someone explain what is going on with the economy, the housing market, and the job market?
Or, rather, sum it all up for me without *too* much bias?
I keep wading through tons of articles and its giving me a headache...I'm not very good at politics or economics, unfortunately.

Is the unemployment rate as bad as it was? Are homes across the board still worth 10-15% less because of market value? Are we out of the recession yet or in a depression or what the heck is going on?

Yeah, I'm a moron. :oops:
Thanks in advance.
Author:  Müs [ Mon Nov 29, 2010 2:17 pm ]
Post subject: 
Yes, yes (probably more in some areas), no (maybe), and noone really knows.

No you're not, and You're welcome.

;)
Author:  NephyrS [ Mon Nov 29, 2010 2:29 pm ]
Post subject:  Re:
Müs wrote:
Yes, yes (probably more in some areas), no (maybe), and noone really knows.


Emphasis mine. The main reason it's so confusing to read through is no one really knows what's going on, why, or the solution. And before people jump all over me, there are several good ideas and theories- but really, there is no broad consensus.
Author:  Aethien [ Mon Nov 29, 2010 3:56 pm ]
Post subject: 
The problem with the "official" definition of a depression or recession is that the government can't declare it's over until something like 6 months or a year later, because of the way that economic reporting works.
Author:  Khross [ Mon Nov 29, 2010 4:44 pm ]
Post subject:  Re: State of the Economy for Dummies aka Me
Yes, unemployment is at least as bad as they state, if not worse.

Yes, the housing market is currently in a double dip and depressed. Values will continue to decline for the foreseeable future.

No, the recession is not over. We are, in point of fact, in a full blown depression contrary to the false assertions of our government.
Author:  LadyKate [ Mon Nov 29, 2010 6:14 pm ]
Post subject:  Re:
Müs wrote:
Yes, yes (probably more in some areas), no (maybe), and noone really knows.

No you're not, and You're welcome.

;)


:D Thank you, Arafys.

Khross wrote:
Yes, unemployment is at least as bad as they state, if not worse.

Yes, the housing market is currently in a double dip and depressed. Values will continue to decline for the foreseeable future.

No, the recession is not over. We are, in point of fact, in a full blown depression contrary to the false assertions of our government.


So you think the housing market is going to get worse? And I keep hearing that we are *out* of the recession...but you're saying not only are we not out of it, we're actually in a depression? Can you expound on that please? I'm trying to make long range plans here.
Author:  Müs [ Mon Nov 29, 2010 6:30 pm ]
Post subject: 
It really depends on where you are. Here, in Vegas, the housing market really can't *get* much worse. High unemployment in the construction sector is contributing to the highest unemployment in the nation here.

I would say that its an L shaped recession, (I don't know what qualifies as a "depression") and we're nearing the bottom of the L. I don't see recovery on the horizon very soon.

I would say we're not going to see real recovery until 4q '11/1q '12, and even then it'll be slow until 3q/4q '12.

And 10-15% is only a best case. There are houses here that have lost some 50-60% of their value.
Author:  Midgen [ Mon Nov 29, 2010 7:30 pm ]
Post subject: 
Part of the problem LK, is that the numbers that are used to determine things like unemployment rate, and whether or not we are in a recessions are A) subjective, and B) researched and reported by biased entities.

There is no hope of ever getting actual useful, factual data.
Author:  DFK! [ Mon Nov 29, 2010 7:39 pm ]
Post subject:  Re:
Midgen wrote:
Part of the problem LK, is that the numbers that are used to determine things like unemployment rate, and whether or not we are in a recessions are A) subjective, and B) researched and reported by biased entities.

There is no hope of ever getting actual useful, factual data.


Well, and subjective in a manner deliberately designed to mislead the public, in many people's opinions.

For example LK, let's look at CPI, the metric to measure inflation. I'm going to assume you know what inflation is, broadly speaking. Consider that CPI no longer includes the items with the largest inflation in the last 15-20 years: healthcare, energy, food.
Author:  LadyKate [ Mon Nov 29, 2010 8:52 pm ]
Post subject:  Re:
Midgen wrote:
Part of the problem LK, is that the numbers that are used to determine things like unemployment rate, and whether or not we are in a recessions are A) subjective, and B) researched and reported by biased entities.

There is no hope of ever getting actual useful, factual data.


Exactly. That's why I'm asking you guys. :D
Author:  Xequecal [ Mon Nov 29, 2010 10:38 pm ]
Post subject: 
You can't have "recovery" when the "normal" employment rate was based off an average household savings rate of -10%.

The unemployment rate is only going to go down via people exiting the workforce, not via more jobs being generated. We'll be lucky if job creation keeps up with population growth over the next decade.
Author:  Khross [ Tue Nov 30, 2010 8:28 am ]
Post subject:  Re: State of the Economy for Dummies aka Me
LadyKate wrote:
So you think the housing market is going to get worse?
Absolutely. Current housing market numbers and predictions fail to include the banks' shadow inventory, which is the number of empty homes wholly owned and kept stationary by financial institutions. That shadow inventory is, best case, equal to roughly average national demand for new housing. The other problem is that construction companies, speculative housing developers, and other entities continue developing new housing communities without actually moving product. The house market is ridiculous oversaturated with product no one wants, no one can afford, or no one can has opportunity to buy. Of course, it gets extremely complex when you consider that at least 50% of occupied houses are underwater by 50% or more and that the market just popped a bubble that had been growing for 25 years. The Japanese Housing Bubble is nothing compared to disastrous situation the U.S. faces which is a 7-8 year stabilization period and a 20-25 year slide in average housing prices despite increasing demand. And, even then, this is only going to get better if the U.S. moves away from debt leveraged personal finance.
LadyKate wrote:
And I keep hearing that we are *out* of the recession...but you're saying not only are we not out of it, we're actually in a depression? Can you expound on that please? I'm trying to make long range plans here.
The U.S. economy is in a depression and real recovery is a long way off. We're facing multiple major economic problems all exacerbated by flawed policies and flawed macro-economic theory. Too many people have had jobs for far too long. Entirely too many people have college degrees, while entirely too few people have productive trade educations. And absolutely too many people have debt in excess of 25% of their average annual earnings for periods longer than 18 months. In short, we're about to get **** up the *** with the spiky baseball of reality (lubed with 80 grit sandpaper and Icy Hot).
Author:  LadyKate [ Tue Nov 30, 2010 8:44 am ]
Post subject: 
So, if the housing market is over-saturated with product as you say, then wouldn't all these architects and construction workers and such be out of business? Are we eliminating a whole trade here?
Same thing with cars...there's too many of 'em and we don't need a new car every 3 years do we?
At what point does enough become enough and we go back to fixing things that are broken instead of just buying new ones? I mean, didn't they predict a lot of this stuff back in the 70s? And if we do go back to fixing instead of buying...how are we going to find "jobs" for all these people?
We've based a large part of our workforce/economy on making stuff that people don't need anymore because we've got too much of it now.
How does that end well? You can't force people to buy new cars or new washing machines when they don't need them and can't afford them....so what happens to those people's jobs? Eep.
Seems that everyone is more focused on getting people to start *buying* again....in the long run, thats not going to solve anything but just make it worse, right? Don't we need to *stop* buying so much crap?
Author:  Screeling [ Tue Nov 30, 2010 8:47 am ]
Post subject:  Re: State of the Economy for Dummies aka Me
Khross wrote:
In short, we're about to get **** up the *** with the spiky baseball of reality (lubed with 80 grit sandpaper and Icy Hot).

You should write children's books.
Author:  Khross [ Tue Nov 30, 2010 8:48 am ]
Post subject:  Re: State of the Economy for Dummies aka Me
LadyKate:

We've had 35 years of continuing to do all the things we were doing wrong in the 1970s. You are aware that Florida alone has some 200,000 acres of unfinished housing developments from the 1970s? These places have roads, sewage, and electric infrastructure by the way. They just don't have houses ... or trees.

And, best I can honestly say is ... read the first three chapters of America's Great Depression by Murray Rothbard. You'll get an idea of why ...
Author:  LadyKate [ Tue Nov 30, 2010 8:54 am ]
Post subject: 
Yeah, didn't I just see a 'Google Earth' slideshow of all that a couple of weeks ago? Durn my old brain and its non-functioning memory cells....

Ok, I'll be honest, I'm not gonna read the first 3 chapters of that book. You can tell me, or I can wiki it later.
Author:  Khross [ Tue Nov 30, 2010 9:20 am ]
Post subject:  Re:
LadyKate wrote:
Yeah, didn't I just see a 'Google Earth' slideshow of all that a couple of weeks ago? Durn my old brain and its non-functioning memory cells....

Ok, I'll be honest, I'm not gonna read the first 3 chapters of that book. You can tell me, or I can wiki it later.
Wiki won't explain; indeed, it is has a vested interest in discrediting that particular author and his work. But, I can give you the short version ...

You are a slave; indeed, you might even be less than that as far as our government is concerned. You're an automaton that exists solely to keep the system functioning. If you've read Orwell's 1984, you are a "prole" (short for proletariat in the most sardonic way possible). Your entire life is one of intentional misinformation and misdirection handled by a government and power elite that cares little for anything other than its self-perpetuation. Laws and regulations are designed to limit economic and intellectual mobility. Government economic policy intentionally keeps you poor, intentionally keeps you in debt, and intentionally keeps you living hand to mouth. And, to that end, you have as much freedom as you think you have, if only because the controls on your behavior are so insidious and subtle that you don't know you're being controlled.
Author:  LadyKate [ Tue Nov 30, 2010 9:37 am ]
Post subject: 
That's pretty wicked.
How do you get out of it?
Author:  Arathain Kelvar [ Tue Nov 30, 2010 9:40 am ]
Post subject:  Re: Re:
Khross wrote:
You are a slave; indeed, you might even be less than that as far as our government is concerned. You're an automaton that exists solely to keep the system functioning. If you've read Orwell's 1984, you are a "prole" (short for proletariat in the most sardonic way possible). Your entire life is one of intentional misinformation and misdirection handled by a government and power elite that cares little for anything other than its self-perpetuation. Laws and regulations are designed to limit economic and intellectual mobility. Government economic policy intentionally keeps you poor, intentionally keeps you in debt, and intentionally keeps you living hand to mouth. And, to that end, you have as much freedom as you think you have, if only because the controls on your behavior are so insidious and subtle that you don't know you're being controlled.


Such has been the case for nearly every human on the planet since the invention of civilization.
Author:  LadyKate [ Tue Nov 30, 2010 9:42 am ]
Post subject: 
Maybe the Amish have it right, afterall.
Author:  Ladas [ Tue Nov 30, 2010 2:57 pm ]
Post subject:  Re:
LadyKate wrote:
So, if the housing market is over-saturated with product as you say, then wouldn't all these architects and construction workers and such be out of business? Are we eliminating a whole trade here?

A/E and Construction firms are failing left and right, those that are still in business are significantly smaller than they were 2 years ago, most of the staff is under some form or paycut (if they still have a job) and the companies are doing the work at cost, or under (many doing this) just to keep some form of cash flow going. There is some consolidation as well, as larger firms are buying up smaller firms. Of course, what they are really doing is buying the clients and/or expertise, soon to be followed by a staff reduction so the overhead is roughly the same, with a larger geographical presence and larger client base. There are no projections from the AIA that look positive until 2012 at this point (AIA is worthless however).

This is also somewhat dependant on the specialty of the firm. Those architects that specialized, or built their practice around high end residential, developer and strip mall work are suffering badly. Those that specialize in health care facilities are doing better.

That said, the way building codes are structured, the industry won't be eliminated.

Quote:
Same thing with cars...there's too many of 'em and we don't need a new car every 3 years do we?

You never needed a new car every three years, unless you were the worst driver on the planet.

Quote:
How does that end well? You can't force people to buy new cars or new washing machines when they don't need them and can't afford them....so what happens to those people's jobs?

Why do you think we had "Clash for Clunkers" and the other proposed/implemented incentives for purchasing durable goods?
Author:  Müs [ Tue Nov 30, 2010 3:06 pm ]
Post subject: 
Author:  Diamondeye [ Tue Nov 30, 2010 4:53 pm ]
Post subject:  Re: Re:
Ladas wrote:
LadyKate wrote:
So, if the housing market is over-saturated with product as you say, then wouldn't all these architects and construction workers and such be out of business? Are we eliminating a whole trade here?

A/E and Construction firms are failing left and right, those that are still in business are significantly smaller than they were 2 years ago, most of the staff is under some form or paycut (if they still have a job) and the companies are doing the work at cost, or under (many doing this) just to keep some form of cash flow going. There is some consolidation as well, as larger firms are buying up smaller firms. Of course, what they are really doing is buying the clients and/or expertise, soon to be followed by a staff reduction so the overhead is roughly the same, with a larger geographical presence and larger client base. There are no projections from the AIA that look positive until 2012 at this point (AIA is worthless however).

This is also somewhat dependant on the specialty of the firm. Those architects that specialized, or built their practice around high end residential, developer and strip mall work are suffering badly. Those that specialize in health care facilities are doing better.

That said, the way building codes are structured, the industry won't be eliminated.


Truth. I had 2 unemployed architects in my Captain's Career Course last year.

Quote:
You never needed a new car every three years, unless you were the worst driver on the planet.


Some people can trash them a lot faster than that.
Author:  Screeling [ Tue Nov 30, 2010 4:58 pm ]
Post subject:  Re: Re:
Diamondeye wrote:
I had 2 unemployed architects in my Captain's Career Course last year.

Does this course require an eyepatch and a parrot? If so, I'd like to sign up.
Author:  Diamondeye [ Tue Nov 30, 2010 5:10 pm ]
Post subject:  Re: Re:
Screeling wrote:
Diamondeye wrote:
I had 2 unemployed architects in my Captain's Career Course last year.

Does this course require an eyepatch and a parrot? If so, I'd like to sign up.


Not that type of Captain, sadly.
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