Cure for the Recession 2.0?

I really don't think turning off the TV will help. After all, it didn't help during the 30's ?? Will it make millions of jobs come back? Will stop the next wave of foreclosures - the option arm mortgages? Or the meltdown in commercial real estate? The media didn't create securitized mortgages, the banking system did. Simply, housing prices are too high relative to income. And they are gonna have to fall a lot more to be reasonable.

THANKS Spook for a moment of realism in this upside down world.
Walt

Guy on 60 Minutes tonight said there were 2 more big mortgage schemes to come yet that will be as big as the ones going on now. He also said there would be a large commercial loan failure. It will be years before all this is settled out.

Spook, you're absolutely correct. While they didn't have TV in the 1930's, turning off the radio didn't stop the Great Depression; WWII did. And turning off the TV today won't bring back any jobs, or make any mortgage payments, or put food on the tables and pay the utilities.

That bell's already been rung, and we can't unring it.

A couple of years back, on the old OT board, I said something to the effect that a scenario like we have today would only be the beginning...and I was ridiculed, because the guys who today say "turn off your TV" were saying that it couldn't happen. But the signs were there, if we would just take off the blinders and see them.

And it's going to get a lot worse before it gets better. Let's just hope none of America's enemies--or her supposed friends--decides to attack us while we're down. A country the size of China could wipe us out by attrition...and then claim all the assets they hold the mortgage to...and we'd be virtually powerless to stop them.

Remember, it was China's demand for steel and oil that drove the markets up and helped hasten this recession. If that turns out to have been just a "dry run,"and the worst is still ahead of us, don't say we couldn't see it coming.

I hope it doesn't come to that, but I won't be surprised if it does.

Turning off the TV will help.

It will not turn back the clock, nor will it solve all problems, nor will it give back jobs to those who have lost them. Nor will it solve any current banking problems.

But it will help.

By turning off the TV, I think we mean don't be so dern negative all the time. At least that is how I am taking it.

We are here typing on the internet - we must not have it too bad. If we feel negative & go all jittery with out investments & spending - that will help create more problems.

Part of what got us into this mess is fools spending way too much more than they had. We can't easily undo that can we?

Part of what will make it worse are folks who feel worse than they should about it all & keep holding back.

Don't be part of the problem.

It won't be solved this week, and turning off the tV will probably just put some more people out of work so that probably isn't right either.

But be yourself & spend wisely but don't hoard & don't go through life all negative & wound up if you don't have it all that bad.

Most of us here don't have it all that bad.

Not really interesting to hear a lot more negative stuff, and that seems to be all some of you have to offer. What's the point to your post? The sky is falling?

If you were smart 2-4 years ago, you prepared for this & all should be fine.

I'm fine. Aren't you? Why be all negative then?

Turn off the TV and enjoy life. TV is just the same old negative stuff you are saying. Get rid of it.

--->Paul

One thing I am doing to help the economy and myself is leaving my crdit card in my wallet. Christmas might be a bit leaner but it will all be paid for.

We're in for a long recession. Maybe we'll learn that we can't live on credit cards.

Larry in Michigan

It`s not as easy as it sounds but try to buy American made whenever you can !! That has to be done to save jobs . MADE IN THE USA !! A 5 dollar China hammer is not a good deal . You just help Chinas economy , put a Chinaman to work , take an American out of work and your hammer wont last 6 months !!

I agree 100%

I hope it dose'nt take another war to end this mess

That WWII ended the Great Depression is one of the most persistent and inaccurate myths in American history.

The decline in economic output occured from 1930 to 1933. By 1936 we had recovered to the same level of economic activity as 1929.

We had a *mild* recession in '38 following this recovery when Federal spending was cut back sharply.

WWII had profound impacts on our economy in the late 40s through 60s. It created a pool of savings and benefits -- from war bonds to GI Bill benefits -- that wasn't spent until after the war. It left us with an expanded and efficient industrial capacity when Europe & Japan had to rebuild their industries.

Between lack of money and fear in the 1930s and the forced rationing of WWII, we had a very large pent up demand for houses, cars, appliances, etc -- along with the savings to buy them, the confidence to loan money when savings wasn't enough, and industry ready to meet the demand.

Without WWII, I don't think we would've enjoyed the amazing degree of prosperity we did in the 50s & 60s; but at the same time we would not have been still stuck in a depressed funk had it not happened.

I don't know guys. I just miss Paul Harvey during a recession. He always said "don't participate". He usually had a segment everyday too titled "recessions reteach recourcefulness" where he would talk about doing things for less,or recession proof businesses or something.

Right,turning off the TV wont help.Sticking your head in the sand wont either.The last Depression got fixed with WW2.Its past Recession,its a Depression.In other words what you have is not worth anything,crops,goods,everything is too cheap,but you cant sell it because nobody wants to buy it,or if they do,cant get any credit to buy with.Its only starting.If there is a drought,or farmers cant plant,or something that causes a shortage for real,it could be real bad.Also even if the new group coming in can figure out what to do to fix it,its in such a mess it will take a while,and it may not be possible to fix it.

Turning off the TV will gradually change the negative mindset that causes the snowball affect.

The same media that is calling for gloom and doom called for $200 a barrel oil as well. A good dose of common sense is needed to see past the next peak and also the next valley.

When a few folks pull back their spending to reasonable levels, the economy can absorb it. But when everybody stops spending at once, the recession set in. When gas prices hit $4 a gallon AND the stock market swooned from 14000 to 8500, there was simply no money TO spend. Disposable income disappeared, and wealth, as in retirement savings, disappeared too.

So we're going through a major market adjustment. Turning off the TV won't stop it, it won't fix it, and it won't make everything better anytime soon. To tell everyone to go back to spending reasonably, when so many are already either out of a job or are on shaky footing in their current position....well, it's not gonna happen, because the money's simply not there. You can't refinance your mortgage, even if it's just to stretch the terms and lower the payments, if you're out of work.

Lots of folks may have seen this coming; I did, and I'm not particularly perceptive. But lots of folks, including me, made their plans and preparations for this based on the assumption that they'd still have their job...which many of us now don't have.

So whether you watch TV or not, it's going to get a lot worse before it gets better.

The title of the thread is 'Cure for the Recession'.

So, what is your cure then?

Where I live, the contractors are too busy to talk to me. Been waiting for a concrete fella to see about my basement since late May. With it minus 2 out right now, guess that season is over. Friend in the lumber yard is happy to see winter, so he can get a little time off - back to 40-45 hour weeks, was doing 55-65 hours a week all summer.

If you planned right, farming was good this past year. Next year looks - interesting, but that is next year. Need a new set of plans for next year...

The 2 multi-national main employers in town have laid off the temp folks, but this weekend my friends were working the weekend shift again to keep up - one has been working every other weekend for most of the last 18 months, he wouldn't mind a 40 hour week for a while.

Where my wife work, she was laid off last week, but other parts of the plant they are asking 10 hours a day, with 8 of them in a way too busy part of the plant not the normal area. So it's not gloom & doom, just normal seasonal business pattern for them.

Doom & gloom, doom & gloom you say.

What is your solution?

If everyone in my town listens to you, sure things will get bad real quick.

Doom & gloom.

No one gave a darn back in the 1980s when farmers were sinking away, or in the 1970's when Jimmy Carter made Brazil a major grain exporter. The hourly workers didn't sit around doom & gloom for us farmers. If they had, things would been worse, glad they didn't!

Things always go in cycles, not everyone is in the same cycle, prople need to be prepared & aware of what is around them & not to overjoyous when times are good, nor too gloom & doom when things aren't so good. It's human nature, but we gotta fight that.

We won't solve problems in a week or a month, but if we just cry about it we might not solve them ever.

Gloom & doom.

What's your solution? Wait for more gloom & doom? Sure doesn't sound any good to me.

(Buzz - not picking on you, I enjoy your posts, and sure some folks have it bad right now. My comments are general, not picking on you - you just offer a well presented message to reply to. Hard to experess things well in a short forum message - just conversation over coffee on a very cold day....)

--->Paul

As far as a cure for the recession, we could try to infuse the economy with cash, and hope it reignites. BUT that might only provide temporary relief, until the markets once again try to right themselves. Then it's gonna be pretty glum looking for awhile.

I'm not saying it's not going to get better; but to deny things are getting bad is to walk around with a blindfold on, and then blame the folks you bump into.

The "cure" is gonna get painful. As someone else pointed out, there are a lot of baby boomers who are getting ready to retire...so the stock market's gonna continue to fall, simply because there are gonna be a lot more sellers than buyers for the next few years. Same for the housing market; as boomers look to downsize, there are gonna be fewer buyers than sellers. It's a simple function of supply and demand.

And that's just a part of what's going on. Boomers are more loyal to Detroit's products than the generations that follow, so it's only natural that Detroit's market share is slipping. And it's Detroit's unwillingness to acknowledge that fact--and to do something about it--that's a big part of what's wrong with their financial position.

Truth is, the recession's already happening, and it's either gonna last awhile, or it's gonna last a lot longer than that. The length will be determined by how long it takes for all this massive debt to be taken off the books, either by repayment or by foreclosures. If it mostly gets wiped away by foreclosures, it's gonna be a lot longer time before there's sufficient cash flowing through the hands of the masses--the middle class--to start spending in anything approaching a "normal" fashion.

If, on the other hand, banks and other financial institutions don't want to have to dispose of already-distressed assets at fire-sale prices--thereby increasing their losses--and they are willing to work with borrowers to get repayments back on track, the recession won't be nearly as deep or as long.

So I guess it depends on whether or not the financial institutuion yield to the "vultures" and clear their books, even if it means taking a major loss.

And if China decides to "foreclose" on some of the "security" for the debt they've purchased here in the US, then we're REALLY screwed. So let's pray that never happens. As Dave Ramsey says, credit is the most heavily marketed product in the US today. So if Americans succumbed to the siren song of the marketing, the folks who made out like bandits were the CEO's who encouraged this marketing, and then had "golden parachutes" in their contracts so that when the "stuff" hit the fan they come out smelling like a rose.

If you think it's bad now, it's only gonna get uglier for awhile. But I fear that we're in the "end times" of ancient prophecy, and I pray that we survive the outcome. Others will pray that I'm wrong.

No easy fix for this one now. Now that the economy is dumping jobs by the 100,000's a week
Going to take a few years to dig out of this mess. Then maybe 10 or 15 years just to get back what was stole.
Looks like the midwest will be better off than the east or west coast at least for now.

Cant spend our way out of this one. No one I know has any extra cash. if they do they are doing what we are doing. Paying off debit.

Both my wife and I work. So we are trying to get costs down to one income. Started in 2006 so we are ahead of the curve. Not there yet, but want to be able to survive if one of use gets a pink slip. Just slipped by, by the hair of my chiny chin chin in Nov. Big Surplus called.Enough took the buy out. Whew!
If they call another surplus in the spring. I am out.

We just paid off her Mini van. 1st time in 20 years I have not made a car payment for her.
If the economy was good. We would have purchased another vehicle for her. Will be at least 3 years before she gets another new one.
The way cars are made now. there is no real good reason to buy another.
I saw this coming a few years ago. Houses costing more than one income, People buying them up in droves. Then driving 50 mi to work every day. Gas hit $3. BOOM!!! The cards come down.
Greed, Thats what it is.The only reason some dumb arse would spend more than he makes for a house is if he thinks he can dump it for a proffit in a short time. That fuse was shorter than they thought. Greed all the way around. Wall street and in the burbs too. Just greed.

I was born in 1937.My mother said the depression was still on.The 1938 hurricane,did a lot of damage in New England,95% of people had no insurance for hurricane damage.The first minimum wage was enacted in 1938,25 cents per hour.My Dad was single in 32,He said work went to men with families first.He was able to get some work in a bakery and diner run by an old family friend.He lived in a rooming house and owed much back rent.I dont remember much prosperity in the 50s,1.00 per hour was a common wage.You had better talk with people who lived thru the depression and WW2.I rememember gas and food rationing stamps.I saw a bit on urban sprawl last nite on tv.Western range lands are being eaten up by housing.The economy is overheated.It can only go down.Too much damage has been done.When the bankers started pushing credit cards I think the trouble began.My re tax went from 200.00 in 1966 to 1900.00 last year.I expect we will have to return to a 1960s economy to survive.Wages and prices will have to be lowered.Current Real Estate values will force many seniors from their homes.In 1970 I could see a doctor for 3.50, now the same vist is 125.00.I carried my own health insurance for a family of 4 for 40.00 a month.The honeymoon is over.