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Recession... fact or hype?


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I think it is becoming a reality and being fueled by hype in the media. I also think it is being fueled by much higher gas prices (yes, pun intended). and using corn for ethanol isn't helping since it is also making all other costs skyrocket!

 

That being said, my family is choosing not to participate in this recession. We aren't changing any of the things we do...we are fairly frugal anyway, but from habit not neccessity.

we aren't planning any big moves or job changes in the next 3 years so unless the recession turns really bad we will just weather it out. That is, assuming no changes in our circumstances...but we do have alternate plans if catastrophy stikes.

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Questions such as "Do you think the US is in a recession?" Answers: "Yes". and "Would you rate your personal economic situation as good, fair or bad.?" Answers:"Fair to good".

 

So those answers tell me that people are evaluating their neighbors' situations as poor, but their personal situation as pretty good.

 

My question is where do they get that information? My answer is that they get it from the media who loves to spread gloom...it sells and makes people listen even if it's not the reality.

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My question is where do they get that information? My answer is that they get it from the media who loves to spread gloom...it sells and makes people listen even if it's not the reality.

 

The election also has a big play in this. If most of the media is Democrat (as I've seen polls to confirm,) they want there to be bad economic news to hurt the Republicans. After all, most folks vote their pocket-book, and the war has taken a back-seat to $$ lately anyway.

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I think it is becoming a reality and being fueled by hype in the media. I also think it is being fueled by much higher gas prices (yes, pun intended). and using corn for ethanol isn't helping since it is also making all other costs skyrocket!

 

 

 

Don't get me started on GAS PRICES! :rant:

 

A $2+ jump in five years. Now that is hype at our expense.

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A much hyped fact. But then, I live in MI, and we've been hurting for a while.

 

-Plummeting home values, due largely to sub-prime mortgage crisis

 

-Higher utilities, due to increased energy demand

 

-Higher gas prices, which impacts just about everything

 

-Higher food prices, thanks to stupid ethanol and other worldwide market factors

 

-Wages are stagnant

 

-12% of the MI population is on food stamps, more than double what it was three years ago.

 

Funny and Yet Not: As I write this, I'm listening to Ray Charles in Concert, and "Lets Go Get Stoned" just came on. This is what lots of people are going to do in the face of all this, I'm afraid, which is just going to make the situation that much worse.

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Guest Virginia Dawn

It depends. There is definitely a recession in the housing market, evidenced by falling prices and loss of jobs.

.

The rest of the economy is not in period of recession, but inflation, evidenced by rising prices and no major nationwide unemployment problems, yet.

 

Any amount of money that is thrown at the problem by the government will not help, it will only worsen it. Any candidate who says they can fix it by creating any kind of "program" is lying. In my not so humble opinion.

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That being said, my family is choosing not to participate in this recession.

 

I love this quote. I'm not participating either.

 

Around here the media is hyping the rise in the unemployment rate- it's up to 4.8%!!! I tell ya what, I own a small business and about 5% unemployment is perfect for my business to prosper. If the rate is too low, I cannot find good employees and I'm turning away customers. If the rate goes too high, not enough people can afford my service. So I'm happy.

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I wish I had the option of participating or not. My husband's company is all about the building industry. We've seen a 33% drop in income over the past 2 years, and a loss of opportunity to advance his career, because of the "hype." For us, it is not hype. It is as real as it gets. We have 5 children at home, and this is harsh. We no longer shop at Gymboree and Gap...it is the thrift stores for us. We used to eat out regularily, and now we live on homemade bread and rice and beans. We used to travel to beautiful places, and now we stay home and watch movies. My children used to be involved in many extra activities, and now we try hard to scrape out enough to take them into town for the "freebies" and get them to the doctor and dentist when they need it. The recession, or lack of, has hit us hard, and while it may not be a universal recession, it is certainly alive and well in my house!

 

Last night my Dad asked me if we would be buying new furniture for our new home...and I tried to remind him that we were building this new house to save money, not spend it. We are fortunate enough that we live in a place that has retained housing values...so that we can get out, and try to make a more wise choice this time around. Sigh.

 

I have a hard time when people say that nothing is really wrong. They aren't living in my shoes...or more importantly, my children's old, worn ones.

 

There may be no issues with some places, but if you earned your living on the front lines of the housing crisis, you may feel differently.

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Ok, not to be the black cloud, but some people live in a permanent state of recession. So being broke now is no different than being broke last year.

 

When the "haves" start feeling pinched then people call it a recession.

 

And I am not downing the haves. It is a real thing for a lot of people. But I personally just haven't ever "had" much. So I don't feel all that different.

:iagree:I have a friend who has been saying, "Oh, my kids are so depressed that we won't be going to Disney World this year," and whines about her credit card debt. She's sweet, and would give you the shirt off her back if she thought you needed it, but she just doesn't "get it," ya' know?

I do believe the economy is slowing down, but like everything else, it has its ebb and flow, and this was bound to happen at some point. Actually, I think it may take a serious recession to wake people up, and get them to live within their means instead of on a steady diet of credit, credit, credit!

 

-Robin

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"It's a recession when your neighbor loses his job. It's a depression when you lose yours."

 

So, those polls indicating that individuals rate their own economic situation as pretty much okay, but think others aren't as well off may actually support the idea that we are in a recession.

 

My personal feeling is that I am concerned. I know a couple of folks who are out of work and not seeing any prospects. I know a lot of people who have homes they cannot afford but can't sell. My husband's employer is starting to pinch an awful lot of pennies and has let go of people just to cut back on salaries. Lots of folks I know are being forced into cutting back because they cannot afford to maintain their standard of living, even though they are still working.

 

And my husband, who has been unhappy in his job for quite some time, has sent out multiple applications and resumes all over the area and has not gotten a single nibble.

 

For the moment, we're okay. In some ways, we're better off than others because we have a good income and very little debt. However, it's tenuous. We have very little in savings (partly the result of some bad decisions, partly due to factors beyond our control that wiped out what we did have started) and don't own our home. So, although we could ride things out for a long time by cutting back expenses should our income decline, we'd be in big trouble very quickly if it were to cease.

 

So, yes, I'm concerned. And I don't think it's all hype. I don't think it is necessarily disaster waiting on our doorstep tomorrow. But it's not just hype.

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I totally agree that the construction industry, especially housing development, is going down pretty quickly with no end in sight. Time to go into remodeling or something else! Commercial construction has not been hit as hard in my area as housing.

 

I'm not sure what I'll do if my industry gets hit with a major slump like that. I'm going to start planning for it now...

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I think some areas of the country feel it more than others. S FL where my parents live is one of the horrible areas to be right now high taxes, gas, grocery add insurance and no way to sell your house pretty bleak. We tried hard to get my parents to sell when they could and get the heck out of there but mother wanted to work the 3 more years to get her retirement benefits which by the way may not exisit when she does retires. But where I am in AL you wouldn't know there was any type of recession. It's very cheap, nice living here. No job issues in my area people are still shopping, still eating out, still buying cars, still going on their Gulf Coast or Disney vacations but then again we are usually one of the last places to feel any kind of recession.

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Well, something's happening. The housing market is a big indicator. And I'm sure those investing in a 401K or other retirement plan have seen some hits. My jaw dropped when my mom told me how much she'd lost.

 

And aren't those IRS checks in the mail supposed to stimulate the economy? Why would they do that unless they were concerned?

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My dh is in construction. Our income has been stagnant for the last few years. He's self employed and works for individuals. If the perceived recession makes people put off doing home repairs it directly affects our income. The other side of that is people will upgrade their old homes instead of moving.

 

He's had to hustle a lot more for jobs lately. We've been using thrift stores and cheap dinners for a long time.

 

My biggest challenge now is getting money for next years curriculum. It'll come, but I'm ready to order like yesterday.

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it's reality if you are in the housing business. Builders are suffering right now, but it's a needed adjustment. They were building way more homes here than people needed. I think realtors and lenders are feeling it, too and it trickles down to retail and restaurants. But...we are in a growing area with plenty of recession-proof jobs and I'm not at all concerned about the long-term.

 

Re: the media bias another poster mentioned. I believe the media is over playing this not because of their liberal agenda, but rather the WOW factor. I mean, 24 hour news channels love conflict. Without it, they have no viewers. So, they capitalize on the drama, on the emotional side of the situation (CNN calls it Issue #1). They personify the economy: "it suffers", "it's healthy", "it rebounds"... on and on ad nauseum. Now, are politicians (Dems *and* Repubs) and their people spinning it? For sure. And it's totally the other side's fault. :glare:

 

my 0.02 cents

Margaret

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Is all this talk of recession a lot of hype for lack of news?

Or is it a reality?

 

What do you think?

 

It depends. Since the official definition requires a downturn for two quarters, it often gets called a recession as it ends or even is beginning to turn back up. (One magazine commented that experts had predicted 10 of the last 4 recessions.)

 

On the other hand, there are industrial, regional or other specific downturns, like in housing prices. If there is an area where one industry dominates, a big change in that industry will drag down lots of other families. This might not meet the criteria to be a national recession. If you are relying on expanding housing values to finance something (like college tuition) or are living in an area where a lost job isn't easily replaced, then it probably doesn't matter to you if there is a recession.

 

I like to remember, though that many countries would love to have our problems. Germany has had several months of growth and has improved its unemployment rate to 8.4%. In the former East German states it runs around 14%. By comparison, Pennsylvania (since it has been in the news lately) is at about 5%. Detroit which is loosing population like crazy has a 7.7%.

 

Here in Hawaii, there is incredibly low unemployment. However, housing prices have gone through the roof in the last several years, traffic is horrible (commutes well over an hour from work concentrations to housing concentrations), consumer goods are very expensive ($5 gallon of milk) and many local families feel forced to move to the mainland in order to live somewhere affordable with work.

 

So in which of these places is there a recession? Where the unemployment is high? Where housing prices decline? Where unemployment is low but wages don't go far? Where there are lots of big employers going bankrupt? Some combination of all of these and more?

 

I think it's hard to pin down a recession. Magazines don't get sold on good news and few tune into a broadcast that tells them how great they've got it.

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It depends on what socio-economic bracket you belong to. The wealthy and almost wealthy won't notice much with the economic problems (unless it gets really bad). The middle class will have to tighten belts. The people really hurt are those who are already living with no emergency nets - if they lose their job or have prices go up, they don't have any wiggle-room to deal with it.

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Well, that being said, I guess we don't feel it in our family.

We have scraped by since we were married 11 years ago. Sometimes getting foodboxes when we had to. Rice for dinner every day. Juggling which bills to pay which month. Hard times.

 

But over the years we have steadily become more and more better financially. We have not felt recession sting probably because we do not live frivolously in the first place. We understand the value of money. We tithe. This is a necessity.

 

People are definitely freaking out over house prices in our area. I think by doing that they are - in turn- making it worse. They have to sell low so they insist on buying the same way. It makes sense, but continues the circle. It makes selling new homes slow also- which makes building homes slow- which forces lay offs or puts the little guys out of business. My friend's husband is a cabinet maker and he just had to leave the state to find work. She is just so upset to see him go.

 

Gas prices, in my opinion, are definitely hype.

I have heard so many reports where this oil company or that oil company had their best quarter EVER or year. That makes me very angry.

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So I saw this article and remembered this discussion. Now I'm wondering what people are planning to do with their "special stimulus payments." If you don't "feel the pinch" of a recession, you'd probably feel free to splurge on something. And if you do think it's a recession, you'd put it away or pay off some debt, right? I'm sure somebody's already done a poll on this, huh?

 

For the record, we're spending it on new furniture. Remember when I recently asked about leather furniture? Yep. We haven't gotten it yet, and I'm having second thoughts now because I do think the recession is real. This is one of the good things about dh being in the military -- because of the job security (unless he goes back to Iraq, I guess).

 

So do your plans for the IRS check coincide with your thoughts about this recession?

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I wish I had the option of participating or not.

 

I have a hard time when people say that nothing is really wrong. They aren't living in my shoes...or more importantly, my children's old, worn ones.

 

There may be no issues with some places, but if you earned your living on the front lines of the housing crisis, you may feel differently.

 

 

I feel you girl. Sigh. My husband was a mortgage broker. Sigh. We are so broke, making a little less then half of what we made 2 yrs ago. And my kids need shoes! And curriculum! Waaaa.

 

Sorry, I just wanted to whine. Back to my keep-your-chin-up, positive thinking day. At least we have our health. :glare:

 

Christy

 

ps. After that whine fest I want to add how blessed I have been by others through this. We have great friends and this board is full of generous people! Thank you all!

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Things are very tight here. DH left his job 2 months ahead of them letting everyone go. The new one is seeing a slowdown - but he is pondering another change.

 

But overall, we own our house, but rising taxes and insurance are killing us....

 

We have scaled back so much there isn't anything left to cut...

 

I'm sure my neighbors would LOVE me to have some landscaping - but well, someday! LOL!!

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