Please vote in this poll using the sidebar.
Compared to a year ago, America's economy is...
- ...on a better course. (34%, 52 Votes)
- ...on a worse course. (47%, 73 Votes)
- ...on about the same course. (19%, 30 Votes)
Total Voters: 155
This poll will be active and displayed on the sidebar through 08.15.2009.
chris » Aug 9, 2009 at 9:27 am
the economy is cyclical. We’ll start coming out by the spring. Should be a long while before prices get back to were they were. Love how people here were predicting the great depression and 100,000 median home prices. The crowing of the bears after the bubble burst was as silly as that of the bulls before the bubble burst.
george » Aug 9, 2009 at 9:33 am
Isn’t the big question: “How is the economy doing now, compared to when Lehman Brothers failed?”
Mariner22 » Aug 9, 2009 at 9:35 am
I am very fearful that all of the government bailouts are going to have a great adverse impact on the economy and society in general. The practice of saving B of A and Citigroup while Lehman and WAMU fail, Goldman Sachs getting 100 cents on the dollar for AIG credit default swaps while GM bondholders got pennies on the dollars, and select consumers getting free money for mortgages bailouts, cars and new homes will eventually result in economic anarchy and social unrest. Plus having all of this go on with the background of more and more people losing their jobs with little prospect of getting equally compensated employment in the future will tear at the fabric of our society especially when we are forced to grapple with paying all of this excess debt back in coming years.
Kary L. Krismer » Aug 9, 2009 at 9:53 am
By george @ 1:
A year ago was before the bad news hit in September. It wasn’t like things suddenly changed in September, but Americans simply had more news, or more awareness. So I sort of like the question if it’s answered based on what you knew a year ago.
I think it was October, 2007 that the mortgage news hit. September 2008 that the economic news hit. Will we make it through August without more major bad news? November? What else is going on that Americans aren’t really focusing on right now?
truthtold » Aug 9, 2009 at 10:32 am
war
Scotsman » Aug 9, 2009 at 11:20 am
I didn’t see “committed to total destruction, led by a corrupt cadre of bankers and machine politicians, pedal to the metal, headed into the abyss.”
But that’s what I would have voted for. Don’t believe it? Wait and see!
98115_Renter » Aug 9, 2009 at 12:50 pm
One year ago we were headed towards a serious period of financial crisis. Today we are headed out of the crisis. Is everything roses? No, but to answer your question, yes we are on a better course as long as meaningful financial market regulation is enacted.
sid » Aug 9, 2009 at 12:54 pm
Definitely on a better course. Am surprised if anyone would vote otherwise. Last year we were heading into one of the worst times in this country’s financial history. Now we are heading out of the recession and moving towards growth. I think soon we will have a panic among the doom and gloom folks when they realize that they have missed the bottom. We are very slowly but surely climbing the wall of worry.
““It’s quite possible, though not certain, that retrospectively, we’ll say that the recession ended in July or August, maybe September,” Krugman said in a separate interview in the Malaysian capital. “My guess is that we’ve bottomed out now, that August was probably the trough month.””
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXgtL5wHZN8k
george » Aug 9, 2009 at 1:28 pm
The only thing I know for certain is that nobody else really knows whether the economy has turned a corner or not.
pegasus » Aug 9, 2009 at 1:33 pm
We are being lied to daily about the economy and the financial shape of our country in hopes that it convinces people to spend which is the only way the nightmare reverses. It is not working so far no matter how many baloney stories they pump out for public consumption. Unfortunately the overleveraged consumer needs to be de-leveraged first ala foreclosures and bankruptcies or principal loan restructuring One of our next nightmares is the collapse of America’s commercial real estate market and the banks and mortgages already well underway Funny how the press does not mention this or that fact that foreign buyers of our debt to finance this fiasco are backing away in droves. How long can the FED keep buying our treasury debt with no money to prop the bond market up?
http://www.physorg.com/news168528849.html
http://market-ticker.denninger.net/archives/1304-BLATANT-Monetization-Uncovered.html
Sniglet » Aug 9, 2009 at 2:20 pm
Asking if the American economy is better off today is like asking if the economy was better in 1931 than it was in the summer of 1929. Certainly, it could be said that the process of working out the mal-investments (i.e. rot) had begun by 1931, but the depression had many long years to go and the bottom was still far away.
I feel heartened by the fact that there is at least a wide recognition that many of the financial behaviour of the last several decades are imprudent. I am actually more optimistic about the future today than I was a couple years ago.
That said, I believe this depression has barely even begun, and that MUCH greater drops in asset prices and a much increased unemployment rate lie ahead.
Just look at Japan in 1991. Asset prices had already fallen considerably from 1989 but they still had a multi-decade odyssey of financial contraction to face (which has yet to end).
Scott Weitz » Aug 9, 2009 at 3:34 pm
There should be an opinion:
4) on a different course.
Had we not had a huge stimulus, the pain who be much worse right now. That said, all the stimulus does is make the suffering last longer. Either way, we have to unwind from the massive amount of debt with nothing behind it.
Personally, I would have rather seen the full collapse so people like many of us would want to invest capital. As is, my family will continue to rent until 1) the market gets some stability, (not even close to that now) or 2) we buy a house from a bank that can write it off as bad debt.
Scott Weitz » Aug 9, 2009 at 3:35 pm
Pegasus and Sniglet-
Great posts from both you. Completely agree.
Scott Weitz » Aug 9, 2009 at 3:41 pm
George-
Most unbias economists know that we haven’t turned the corner. Simply put, you’re either getting better or your getting worse: while the freefall has ended, there is still no stability in the marketplace. Without govt intervention, things would fall apart (eventually the govt has to get out, but they will be too intertwined to do that without collapse for many, many years). As others have noted, commercial real estate and high end housing has yet to falter…they must (and will) fall before we can really start to improve and see improvment.
By the way, no one talks about this, but we have 2 HUGE problems on our plates….1) tax revenues have fallen off a cliff (thus municipalities and states will be defaulting on a massive scale within 3 years); 2) the social security bubble is the 800 lb gorilla that may be the biggest problem of all for our govt….the US simply won’t have the money to provide for the baby boomers.
sid » Aug 9, 2009 at 3:52 pm
By Scott Weitz @ 14:
who are these unbiased economists?
You are probably considering these economists as unbiased since they hold views which you yourself want to believe in. How do you know that the economists who think we have turned the corner or are close to turning the corner are biased? You think Krugman is biased?
“An optimist is a person who sees a green light everywhere, while a pessimist sees only the red stoplight…. The truly wise person is colorblind.”
– Dr. Albert Schweitzer
Kary L. Krismer » Aug 9, 2009 at 4:17 pm
RE: sid @ 15 – I’d agree. When I read the comment my thought was there are no unbiased economists.
The Real Hugh Dominic » Aug 9, 2009 at 4:19 pm
By sid @ 8:
I agree we are better now than last year, but I dont think anyone will be panicking on “missing the bottom” – not for real estate or cars. Maybe for the stock market (though we could get a double dip).
The truth is that we are more stable than we were a year ago – period. Are things great? No. But they are demonstrably better and looking, very, very gradually, up.
David Losh » Aug 9, 2009 at 4:38 pm
The economy has gotten much worse this past year for a lot of people. What we never address is that interest rates are low and the $8000 stimulus are gimmicks.
People refuse to see that we are just a band aid away from what was a complete financial break down. They want to believe that solutions have been put in place when it was just a temporary stop gap measure.
Is the government really going to run GM? No! The idiots in charge will take over. Will there be another billion dollars or trillion dollars thrown around? No. Will banks recover the losses they are taking or are about to take through foreclosure? No. The idiots in charge are doing business the same way they have been for decades.
The only thing the government is taking control of is health care and every body is upset about that. These other programs are temporary give aways to our American Corporations. The idea is that increased tax revenue will pay for it. I don’t see any Corporate executive giving speeches about how things will be different. It’s all more of the same.
Warren Buffet did tell us he was buying bank stock so that was good, and he did make a billion dollars with Chinese steel, so things must be OK for him. For the rest of us the Geico premiums will keep going up.
Jonness » Aug 9, 2009 at 4:56 pm
By chris @ 1:
To each his own. I learned a great deal from the deflation theorists and appreciate every word they said, just as I appreciate the words of the inflationists. Although, just prior to the latest runup, I predicted a strong bear market rally and a subsequent inflation-driven W was the most likely outcome (technically it’s not a W without a significant period of time between dips), I think insulting those who previously called for a depression is short-sighted on your part.
Your above prediction is nothing more than the mainstream consensus based on the current available data and adds absolutely nothing to thought pool. Excuse me if I fail to respect that. Thus, I’ll continue to learn from both inflationists and deflationists while watching this mess unfold and make up my own mind–separate from what the government desires to brainwash me to believe.
Jonness » Aug 9, 2009 at 5:23 pm
RE: Mariner22 @ 3 –
I think we are mindless robots who serve the better good of corporations we mostly know nothing about. Nothing more, and nothing less. While your argument makes sense, I fail to see how anything has changed from the way it was in the past. Corporations donate their money to get their people in office, and then they reap the benefits of victorious elections and lobbying.
We as Americans like to think there is some greater purpose or justice in all of this. But in actuality, there isn’t. We toil our lives away to have a little nicer car or house than the next guy. The more we toil, the less of ourselves we actually get to experience. Fortunately, we are simple creatures; thus, we are content to abandon our true selves and strive to live in a nicer house and drive a nicer car than average. Then we grow old, wear diapers, and eventually rot back into the ground. If we’re really fortunate, we meet a compatible robot to share this joy with along the way.
The two-party election system is absolutely brilliant and serves the needs of corporations in the best possible manner. How could anybody not be in awe of such a system? Especially since we have the media available to enforce the needs of the system. It’s as perfect as perfect gets.
Ira Sacharoff » Aug 9, 2009 at 5:26 pm
I completely agree with Jonness here. Although I don’t agree with the deflationists here, I’m not so sure that I’m right and they’re wrong, and so far they’ve been more right than I have.
As far as the course of the economy, a year ago we really were headed to oblivion, and the poo hadn’t quite hit the fan yet…
A year later, markets seem to have stabilized, at least temporarily. But the Government is still spending like a drunken sailor, and at some point that day of reckoning will come where we can’t keep borrowing our way out of messes. This is not an anti Obama rant. He’s got his hands full, he inherited a mess, and I think he truly wants to make things better for the American people.
But he’s a politician, and cutting government expenditures right now would not only be unpopular, it would have negative short term consequences on the economy. Very few politicians, Republican or Democrat, will act in the best interests of their constituents if it means losing popularity.
Ira Sacharoff » Aug 9, 2009 at 5:31 pm
“who are these unbiased economists?”
An unbiased economist is almost as rare as an unbiased real estate agent.
Softwarengineer » Aug 9, 2009 at 7:35 pm
RE: chris @ 1 –
Hi Chris
I’m glad you don’t think 16%+ unemployment [includes severely underemployed], but add giveups and college grads [now its like 20%+] is as bad as GD I….your optimism ignores the horrifying unemploment statistics, but agrees with MSM. Too bad MSM has been wrong all along predicting the bubble and its predictions of economic recoveries that never happenned are proof its subpar.
But its like Disneyland, sometimes opitimism makes you forget the reality outside the gates.
Enjoy your American Idol.
Softwarengineer » Aug 9, 2009 at 7:41 pm
RE: The Real Hugh Dominic @ 17 –
Yes…unemployment numbers are going up and up…..with no end…..
Sometimes I think there’s a good portion of America that believes as long as 50% of us have half way decent jobs and the other 50% live in homeless shelters [kind of like India and China]…the economy is booming, break out the champaign and let’s gut Medicare to pay for free health care plans….
Markor » Aug 9, 2009 at 8:11 pm
I’m in the camp that thinks the current situation is a dead cat bounce. Predicting the end of the bounce is like predicting when the housing bubble would pop–nobody knows, even as it’s a sure thing. I think we’re reenacting what happened during the Great Depression. It’s like a flood that comes through a town, all looks hopeless, then everyone works to build a levee, gaining hope despite the rising waters, then the river breaks through the levee, which turns out to have been woefully inadequate.
The stock market is up and that’s bringing optimism, esp. related to 401Ks. Stocks are up if only because corporations are pulling back in their attempt to stay profitable in the smaller consumer market. The relative grimness of the economy hasn’t changed much though, and most signs point to a worsening.
chris » Aug 9, 2009 at 11:12 pm
RE: Softwarengineer @ 23 –
If you think the current economic downturn is anything like the GD you are a laughably ignorant student of history. But I mean this recession does look really bad if you were to, say, pad your statistics in order to support your beliefs. Why stop with 20% unemployment? Hell, add in the kind of underemployed and it shoots to 27%! Add in high school kids and its up to 30%!
And your parting shot is a cruel manifestation of your razor sharp wit. You sir, have wounded me. I shall crawl back to my den in Never Never Land (bought in 2007 with a no money down ARM). There, I will rue the unforgiving deity that has taken my sweet, sweet Paula Abdul from me!
b » Aug 9, 2009 at 11:24 pm
Nothing has fundamentally changed, so nothing will get fundamentally better. The government has stepped in to prop things up, FHA has become the new Countrywide and everyone gets a tax credit to buy a house or car. You also get a year of unemployment checks now, which helps many I am sure. The question is if they can kick this can down the road again or not, and we won’t know that answer for another year or two. They successfully kicked the can in 2002 until 2008, and they are certainly trying very hard to do the same here. But I am not sure our international financiers will go for it this time, the rot showed up viscerally for most last fall. My expectations, based on nothing more than market psychology, tell me that if we last through the winter then the can has been kicked successfully. I do not think home prices will be going anywhere but down anytime soon, too much sideline inventory and barely enough sales even when you give 100% loans again (FHA + 8k). If people are comfortable dumping their money back in the stock market, they will be just as comfortable dumping their home on the market next spring.
Kary L. Krismer » Aug 10, 2009 at 8:38 am
By Scott Weitz @ 14:
I guess 90% of economists are biased. ;-)
http://www.techweb.com/article/showArticle?articleID=219100597§ion=News
Scott Weitz » Aug 10, 2009 at 8:46 am
Kary @ 28-
The recession being ‘over’ is a matter of semantics. A blip in GDP increase does not mean the hard times are over.
As for ‘unbias’ economists, I would point everyone to 1) college econ professors (ie. Robert Schiller); 2) long-short hedge fund managers (whom 70% say we will test March lows again); 3) independant analysts (see Peter Schiff; David Frye on SeekingAlpha.com; and most importantly 4) Ben Bernanke….Big Ben will never come out and say things are terrible, but if you think about it…he’ll ring the bell when times are improving by RAISING RATES to fight inflation.
Granted, everyone probably has a slight bias, but I’d take this group of people’s opinion over the Chief Strategist at any company or investment bank.
Scott Weitz » Aug 10, 2009 at 8:50 am
To Kary’s point, I’d like to play a little game:
For all the Bulls out there, give me the positive news that makes you believe that things are improving, and I’ll tell you how its bogus.
johnnybigspenda » Aug 10, 2009 at 8:53 am
RE: Jonness @ 20 –
I think someone has a case of the “Mondays”.
Kary L. Krismer » Aug 10, 2009 at 9:07 am
By johnnybigspenda @ 31:
Actually he wrote that on Sunday, and I thought it made a lot of sense. I’d just question whether the so-called two party system serves corporations or visa-versa, or whether it’s just one big system.
Scott Weitz » Aug 10, 2009 at 9:30 am
Ira @ 22- haha!
Quick story: I met a commercial realtor who actually told me things were going to get much worse and told me to hold off on a lease until the collapse comes…I almost fell out of my chair in shock…but now I have a commercial realtor for life. Honesty does pay.
S-Crow » Aug 10, 2009 at 9:42 am
RE: Scott Weitz @ 33 – Scott,
was doing some research over the weekend on commercial up in Sno Co. I actually bumped into an individual at Costco that I made contact with regarding a small commercial project I had high interest in. The jist of it: Fast forward today…..project is in foreclosure proceedings. Who could’a known?
Your commercial contact is gold when they give you the straight scoop.
Scotsman » Aug 10, 2009 at 10:37 am
RE: Scott Weitz @ 30 –
Suddenly, it’s pretty quiet around here…
I don’t think it’s that easy to come up with some bogus positive data, let alone reliable and comprehensive positive data. Lots of spin in the media though.
Kary L. Krismer » Aug 10, 2009 at 10:53 am
RE: Scott Weitz @ 30 – I’d put myself more in the neutral camp than bull camp, but I’ll play along.
How are the declining levels of job losses (to about 250k last month from about 800k earlier) not good news?
Is it because there simply aren’t that many jobs left? :-D
The Tim » Aug 10, 2009 at 10:55 am
RE: Kary L. Krismer @ 36 – Personally I view that more as “not as bad” news, rather than “good” news. 250,000 jobs lost in a single month definitely still qualifies as bad news in my book. Job gains would be good news.
Kary L. Krismer » Aug 10, 2009 at 11:01 am
RE: The Tim @ 37 – The losses are clearly bad, but as someone said yesterday, you’re not going to go from 800k a month to positive job creation in a few months. So the trend is a good thing (especially if your job is on the bubble.).
Kary L. Krismer » Aug 10, 2009 at 11:13 am
By The Tim @ 37:
Thinking about this further, I think they’re saying that you need a gain of 250k just to maintain unemployment levels. So Tim, quit being so bullish! ;-)
Seriously, assuming that’s the case, that shows how many people dropped out last month for the unemployment rate to drop .1%.
Scott Weitz » Aug 10, 2009 at 11:17 am
RE: Kary L. Krismer @ 36 –
Touche-
The massive, unprecedented amount of layoffs simply could not continue forever (I believe 660/mo was the most). The idea that only 200k lost jobs is a good thing is truly laughable. Show me postitive numbers before we can claim recovery.
As for the unemployment numbers that ‘decreased’…this was simply due to the number of people whose benefits expired.
Sid » Aug 10, 2009 at 3:44 pm
By Scott Weitz @ 30:
Rising equity markets
Sid » Aug 10, 2009 at 3:47 pm
By Scott Weitz @ 33:
This has to be ultimate buy signal.
Do you know if this commercial realtor was bullish in 2006/2007
Matthew » Aug 13, 2009 at 8:33 am
In 1930 people thought we were headed toward economic recovery. Instead the country faced another 10 years of economic downturn.
The light at the end of the tunnel is a train people. Once the sugar high euphoria wears off this Govt stimulus, we are going to crash hard. They don’t know how to exit out of the alphabet soup of government spending (TALF, TARP, etc) that is barely propping up the financial industry. We are bankrupting the world’s governments just so we don’t have to fully face this economic downturn.
Face the music, America is bankrupt.