What recession?
I don’t know about you, but when I went to a mall the other day the parking lot was absolutely jammed with cars and the stores were full of shoppers. Are people preparing for Christmas already? Are they merely window-shopping and amusing themselves? Or are they just so happy that the price of gas is down that they’re out for a jaunt, and the mall has become the go-to place?
As for me, I was there to return something.
I have no training at all in economics. However, for the last 15 years or so I noted an inverse correlation between the stock market and oil prices with about a 4 month time lag. It made some sense to me as energy drives the rest of the economy and with less money spent on fuel, more is available for other aspects.
I’ve managed my retirement savings on that basis over that time period. Last fall when oil started its up trend I moved much of the funds from stocks to guaranteed returns. My total hit from this crash was about 3% of my total (I always leave some on the stock side) . Guess what I’m doing now 🙂 ? I may be wrong, but with oil under $70 all that saved expenses will move back into the economy shortly.
People complain about the economy, and how expensive stuff is, but they still buy things. The lure is too great. We have a consumer culture, a recession isn’t going to change that.
Despite the national rhetoric, and all The Obama’s pronouncements, life goes on as usual here. It almost seems like the stores are busier than usual. And there’re no real sales going on. Yet.
I’ll allow myself to grow alarmed for the state of the economy, when the local Meijer stops stocking bottles of mineral water for pets. Or when I stop seeing hair dryers for dogs advertised on TV.
Technically, there is no recession in USA yet: it takes two quarters of negative growth rate to declare recession. And even when and if it really sets in, some regions will began feel it earlier than the others – in proportion to the job loss. Honestly, the level of consumption in USA is so high now, that I do not expect to see in TV lines to soup kitchens.
My best friend works in the cash office at our local WM….she just told me they were up 18% on the year and this past weekend were up 14% over last year. The MSM is trying desperately to convince us we are in a recession/depression….but I am not certain that the average American is buying into it just yet.
I believe the Fed-Treasury throw-money-at-it approach, is, for the moment, working. We are massively borrowing from others and from ourselves in order to keep on doing what we’ve been doing, and that is to overspend and overborrow. The strategy of us bailing ourselves out (with what for money? Just IOUs) is insane.
A recession is hardly the Black Plague.
The bailout of the housing bubble is the same Rx as for the tech bubble….which gave birth to the housing bubble! We are not anyway near to a full reckoning; far from it. Which is worse, hyperinflation or Great Depression deflation?
Me, I am debt-free and getting ready for a prolonged hunker-down.
There would be reason to be sanguine about what people are observing if all those shoppers out there were paying cash, i.e. money they’d saved. If, on the other hand, they’re topping off their plastic, it’s gonna be a hell of a New Year.
It’s weird, isn’t it? Complaining about the economy has almost become a ritual, whether people actually believe it or not. Our mouths may say “no” but our wallets say “yes”. I’m reassured enough that I’ve bought a few moderately expensive, long-planned and long-delayed items myself. And then there’s early holiday shopping.
I suspect we’re seeing one reason why McCain was reluctant to devote his campaign purely to financial issues, even when some pundits loudly insisted that all-Fannie-Mae-all-the-time was the surefire key to the election. Yes, it’s a juicy subject for some of us, but as a general campaign issue it’s like listening to that nice old lady down the street give another long explanation of rose gardening techniques. The common reaction is to nod politely and move on, without the slightest memory of the conversation.
Tom is right – any government can keep the economy going if they keep printing money and handing it out. I just heard that Fancy Nancy has just said they want to pass another stimulus package – send out a bunch more money to people so they can feed it back into the economy. Bad move – bad news.
Victor Hanson made a clever remark that the real cause of credit crunch was not Wall Street machinations, but a widespread habit of living on debt. Nothing changed yet in this habits, and until spending/saving behavior of millions customers seriously improved, such crises will loom. As always, society needs better moral rather than better regulations; deficiency in the first can not be compensated by the second.
In my neighborhood in northeastern San Antonio, where there were a much-above-average number of houses for sale this summer and fall (sorry, this is an anecdotal observation, not a cold hard scientific count) nearly all of them have sold, and in fact, have new residents in them. The number of -for-sale/for lease/rent signs is back to the usual number of about half a dozen on the streets where I walk the dogs. I kind of like to keep an eye on this – because this is my neighborhood, a sort-of-upper-middle-class/working class neighborhood of mostly house-proud owners of $75,000-$125,000+ houses.
In the new development next door, metaphorically speaking, of new bouses in (wild guess here) $100,000-150,000 range, even though only about half the development has been built, they finished all the houses that were started over the summer and all but 3 or 4 have been sold and moved into by new residents.
Milage may vary in other ‘hoods, of course.
Sorry – new houses!
Atlanta airport is as packed as I’ve ever seen it. I fly a lot for business, and have noticed only a couple airports that are not major hubs with noticeably reduced crowds during major flight hours.
I work at *name of retail place you’d definitely recognize* and we’ve been MOBBED for three weeks. And we’re not seeing more credit cards, just more people who want to be out circulating themselves and their money.
I’ve even had people tell me in plain middle American english that they’re out shopping to “show those snotty reporters.”
One day there was a truck in the customer’s parking lot with a front license plate the said, simply: NEVER QUIT. People were taking pictures of it with cell phone cameras and talking about it inside the store.
The sold-out media may believe America is beaten and sad and begging for a secular messiah to rescue us. Reality doesn’t seem to concur.
I was out riding my bike (as in bicycle) this past weekend and there were so many cars on the road it was ridiculous. I thought I’d get some peace and quiet out in the country and even on a Sunday afternoon they were going past me six at a time. It felt like rush hour. Gas here has dropped about $1 a gallon in the past three weeks so one of my theories was that the pent up demand for travel was expressing itself now. If it wasn’t that, I don’t know what it was, but people certainly aren’t staying home. Even when gas was over $4 a gallon the streets were busy. I don’t know what a serious recession would look like in 2008 but this isn’t how I would imagine it. So I’m skeptical, too.
On the one hand, I believe the media is playing this up for Obama- never mind the Democrats role in Fannie Mae and Freddie Mac. What the press though is seriously missing is how all this national and personal debt will catch up with us at some point. The press seems to think of consumer spending and “stimulous packages” and “bailouts” as what keeps the economy going. The press has the same sophisticated view of the economy that a spoiled teenager does with her daddy’s credit card. They make me sick! What we need is more domestic energy production and less regulatory burden on buisiness. Don’t even get me started on the Goracles Carbon cap and trade BS that is coming down the line.
I like the way Glenn Beck looks at this. I fear he is right.
This evening my wife and I were in a small city. We drove past several chain restaurants [Outback, Red Lobster, Olive Garden, etc.] In each case the parking lots were filled. Obviously they were all doing great business, on a Monday night. That certainly doesn’t look like an economy in which middle-class people are having to scrimp and save.
And regarding the lack of credit. In recent weeks a close friend of mine has received two unsolicited, pre-approved credit cards from major lenders and two notices from others that his credit limit had been raised. His wife has also received an unsolicited credit card and two notices that her credit limit has been raised. It appears that people with bad credit histories are having some inconvenience, but those who have been diligent in paying their bills are being sought out by lenders.
Yes, I’ve noticed similar things. I have noticed that neither the higher gas prices of the last year nor the financial instability, people are driving just as much if not more. Parking places are actually harder to find. And that, for certain, could not be passed off as a Christmas shopping thing.
I, personally, have cut back in spending on those rare goodies, choosing to try and save some hard cash (for what it may be worth). But I have not curtailed my driving. Yet, most of the people I know just go on as they have always done, not changing a thing regarding spending, driving, eating out, etc. Of course, I am more saving for some major things, to include a possibly great deal on a house in some not so distant future (or perhaps an ammunition reloading station, an AK-47 or SKS and extra mags, and perhaps a few other things along those lines, especially before O. gets into office, though McCain, to my mind, is a bit shaky himself). A home purchase would be unwise if O. carries the race or the financials tank further (in theory?).
It just seems odd, for all the screaming and panic, not much has changed, as it seems from where I sit. I was glad to hear President Bush suggest that America does not want to permanently inject socialist governmental long term policies into our banking and financial sectors, like Europe (or, that is as close as I get paraphrasing). Still, I am not sure I trust him completely, but less so those who are about to be elected, Curly and Moe. For as much as I do not trust President Bush, I will miss him. He actually was the kind of man, if not always politically certainly socially and culturally, who I was pleased to see take the office and to be comfortable calling President, with a capitol “p”.
Former Putin’s chief economic consultant, Andrey Illarionov, now working for Cato Institute, said that general public often confuse economic and financial crises, recession and depression, equity crunch with credit crunch, and so on. He was much more optimistic about perspectives of USA economy than most of pundits, stating that he does not see now neither recession nor economic crisis, only temporary decrease of production volume in several industries that has not long-standing consequences and often occured in the past.
Sergey,
As much as I disrespect much of what Russian governance is and always has been, their science, math, and economic braintrust has always been a thing of amazement to me. I am not sure if the problem is a disconnect between the governor’s disconnect with the talent there, the attempt to remove God (and goodness in that attempt), or flaws inherent to those sciences, that has left Russian people groaning in agonizing governance, but… I love the Russian classical, practical, and quite often correct and advanced logic. Oh, their poets and writers send me well into high gear as well. I wonder if suffering is what creates that?
In any case, I think I would have to agree, if cautiously. As if, though too, I have any bearing or real knowledge on the matter. I guess I just find it easier to believe what is most likely true, given what I do know and see.
It is what it is, and people handle it by doing what they’ve always done in times of difficulty – keep living their lives. Suffering is relative. Even during the Great Depression, Americans lived better than people in most other countries. Not everyone lost everything and spent the decade standing in breadlines or selling apples on the corner. Forget about the iconic images and think about what people really did to get by. Somehow or other, they made it. We will, too – if we work together.
I believe, though, that if Americans ever start to experience genuine deprivation we will turn on each other like starving dogs. This seems to be part of the modern American character.
If, on the other hand, they’re topping off their plastic, it’s gonna be a hell of a New Year.
They probably expect to bailed out, like everyone else has.
Frankly, it frosts me no end that I’ve been “responsible” about my personal debt, but I’m asked to pick up the slack for those who weren’t.
Ah yes of course… the old ‘how can global warming be real when it’s COLD outside today?’ argument