The Economics of the 2009 Economy
#1
The Economics of the 2009 Economy
This morning I sat for 2 hours waiting while I got the oil changed in my car. As usual, I brought reading material, a magazine if it was quick and a book if it took longer. The service center had CNN on and in between watching the weather predictions and warnings ( bless your hearts in the Pacific Northwest and the Midwest!!!! ), there were several discussions led by pundits on the economy, getting out of debt etc. The book I had brought with me was the new Suze Orman paperback on how to get your act together financially this year. I hadn't gotten too far into the book (they had finished with the car by then), but it did have an interesting and clear explanation of what happened and how it happened on the collapse of the lenders and Fannie and Freddie Mac etc.
Anyway, some things from CNN-in 2008, the US lost the highest number of jobs since 1945. I would hazard a guess that with the end of WWII, the whole armament industry and other war related jobs went away due to the end of the war. So what happens if we ever get out of Iraq, Afghanistan etc???
Michigan has the highest unemployment rate followed by California, South Carolina, Washington, DC. There was one other state but I couldn't remember- (sorry I was taking mental, not physical notes). States with the least amount of unemployment were in a little linked area- Wyoming, North Dakota, South Dakota . There was a bright spot in medical fields and education there actually had been jobs gained. The government added 7K more jobs the end of the year-although these are likely bureaus and such to study the current economic crisis-
Meanwhile, back at the ranch, the personal finance gurus had some suggestions. Sure, these are common sense, but does everyone actually stop and think about it? Credit card debt-negotiate with your credit card company IF you are having trouble making payments or if you've got a good credit record ask for a lower interest rate. Makes sense- running away from your debt won't solve the problem and why anyone on God's green earth would choose to carry and actively use a credit card with a 12, 14, or even 22 percent interest rate is not smart. Furthermore, resolve to pay off your credit cards in 30 months. Make a list of your expenses and study the differences based on what you spend because you need to-housing, food, etc and what you want to-latest gadgets, toys, eating out, movies, clothing etc. There is trimming to be had there, and some of you have mentioned that, cutting back on cable tv for example.
Some here know the hard way what it is like to be unemployed. Since I got word on my own one day a week cutback and realized that it meant a loss of 25 percent of my monthly salary, my first thought was, well guess I had better see if I can cut back my expenses a corresponding 25 percent. It DOES make it a bit more difficult to achieve the "circle the wagons" approach I've been nurturing over the past few months but it's got to be done. Some how some way. Suze Orman says it will be 5 to 6 years before the economy rights itself.
Hang onto your hats, it's going to be a bumpy ride. I think so, do you?
Anyway, some things from CNN-in 2008, the US lost the highest number of jobs since 1945. I would hazard a guess that with the end of WWII, the whole armament industry and other war related jobs went away due to the end of the war. So what happens if we ever get out of Iraq, Afghanistan etc???
Michigan has the highest unemployment rate followed by California, South Carolina, Washington, DC. There was one other state but I couldn't remember- (sorry I was taking mental, not physical notes). States with the least amount of unemployment were in a little linked area- Wyoming, North Dakota, South Dakota . There was a bright spot in medical fields and education there actually had been jobs gained. The government added 7K more jobs the end of the year-although these are likely bureaus and such to study the current economic crisis-
Meanwhile, back at the ranch, the personal finance gurus had some suggestions. Sure, these are common sense, but does everyone actually stop and think about it? Credit card debt-negotiate with your credit card company IF you are having trouble making payments or if you've got a good credit record ask for a lower interest rate. Makes sense- running away from your debt won't solve the problem and why anyone on God's green earth would choose to carry and actively use a credit card with a 12, 14, or even 22 percent interest rate is not smart. Furthermore, resolve to pay off your credit cards in 30 months. Make a list of your expenses and study the differences based on what you spend because you need to-housing, food, etc and what you want to-latest gadgets, toys, eating out, movies, clothing etc. There is trimming to be had there, and some of you have mentioned that, cutting back on cable tv for example.
Some here know the hard way what it is like to be unemployed. Since I got word on my own one day a week cutback and realized that it meant a loss of 25 percent of my monthly salary, my first thought was, well guess I had better see if I can cut back my expenses a corresponding 25 percent. It DOES make it a bit more difficult to achieve the "circle the wagons" approach I've been nurturing over the past few months but it's got to be done. Some how some way. Suze Orman says it will be 5 to 6 years before the economy rights itself.
Hang onto your hats, it's going to be a bumpy ride. I think so, do you?
#3
Re: The Economics of the 2009 Economy
I know, and back 7 years ago when I was working 1 1/2 jobs to keep the wolf from the door and to finance my trips over to see DH in England, I thought that was tough-60 hour work weeks, no day off in 30 days etc. But there was a light at the end of the tunnel. Now.........
#4
Lost in BE Cyberspace
Joined: Oct 2003
Posts: 22,105
Re: The Economics of the 2009 Economy
I worry a great deal about the economy. Although you wouldn't know it after starting a silly "Shopping for a new SUV" thread. I know that buying anything huge right now is pretty ridiculous. Thankfully my husband only gives me a short rope in which to hang myself.....
We are probably doing better then a lot of people. We are both gainfully employed. My job is pretty secure, but my husband, working for Corporate America, probably isn't. I hate to think what it would be like for him to be unemployed. Which leads me to my other nightmare - no savings! Hopefully I'll get my act together this year. I know we will be much better off. All this mess really makes you look at your life and how you can make changes.
Anyway, thanks for a great post and thread, Cindy. For thought provoking for everyone I would think.
#5
Heading for Poppyland
Joined: Jul 2007
Location: North Norfolk and northern New York State
Posts: 14,540
Re: The Economics of the 2009 Economy
I hadn't heard of Suze Orman before but I see you can download the book FOR FREE over the next few days. I'll check it out - thanks Cindy!
Krugman wrote a piece in the NYT (last Monday, I think) in which he more or less said that we were heading into a depression that would be equivalent to, or worse than, the Great Depression. No doubt it will play out differently, because the economy (US & world..) is very different & the US Government will adopt very different policies this time.
Krugman wrote a piece in the NYT (last Monday, I think) in which he more or less said that we were heading into a depression that would be equivalent to, or worse than, the Great Depression. No doubt it will play out differently, because the economy (US & world..) is very different & the US Government will adopt very different policies this time.
#6
Re: The Economics of the 2009 Economy
I hadn't heard of Suze Orman before but I see you can download the book FOR FREE over the next few days. I'll check it out - thanks Cindy!
Krugman wrote a piece in the NYT (last Monday, I think) in which he more or less said that we were heading into a depression that would be equivalent to, or worse than, the Great Depression. No doubt it will play out differently, because the economy (US & world..) is very different & the US Government will adopt very different policies this time.
Krugman wrote a piece in the NYT (last Monday, I think) in which he more or less said that we were heading into a depression that would be equivalent to, or worse than, the Great Depression. No doubt it will play out differently, because the economy (US & world..) is very different & the US Government will adopt very different policies this time.
I had read a little while ago, and stated here, that the US Stock Market actually didn't recover until 1940. I'm sure that was in some part due to the involvement in WWII. As you say times are very different now, as are we. There has been a generation grow up that has not known what it was to be directly affected by a war or some major economic fallout. This is also sadly, a generation that believes in instant gratification. I want, so therefore I shall have.
#7
Heading for Poppyland
Joined: Jul 2007
Location: North Norfolk and northern New York State
Posts: 14,540
Re: The Economics of the 2009 Economy
One effect I've already seen is folks of my age group making the decision to defer retirement by at least one year - two years etc. A simple calculation, my retirement savings have lost a proportion of their value, another two years' contribution will bring them back up to the level I planned.
Multiply this effect across the whole country, and a lot of younger people won't get hired, or won't advance in their careers. And this is without any loss of jobs or downsizing!
Multiply this effect across the whole country, and a lot of younger people won't get hired, or won't advance in their careers. And this is without any loss of jobs or downsizing!
#8
Lost in BE Cyberspace
Joined: Oct 2003
Posts: 22,105
Re: The Economics of the 2009 Economy
I saw an interesting program on PBS Frontline last week. It was actually first broadcast in 2006, but it gave alarming account of how people really don't understand their companies 401k plans (and how that was never really earmarked to be an acceptable retirement plan anyway) and that they are not putting enough money away. Pretty scary.....
#9
Re: The Economics of the 2009 Economy
One effect I've already seen is folks of my age group making the decision to defer retirement by at least one year - two years etc. A simple calculation, my retirement savings have lost a proportion of their value, another two years' contribution will bring them back up to the level I planned.
Multiply this effect across the whole country, and a lot of younger people won't get hired, or won't advance in their careers. And this is without any loss of jobs or downsizing!
Multiply this effect across the whole country, and a lot of younger people won't get hired, or won't advance in their careers. And this is without any loss of jobs or downsizing!
Since we are just now trying to start to save (yes I know, a bit late to put it mildly,) that's another reason why we will keep on keeping on.
My son had quit his job 2 days before they found out they were going to have a baby. He's been working on a few ventures that have so far been promising, but of course I worry.
#10
Re: The Economics of the 2009 Economy
I saw an interesting program on PBS Frontline last week. It was actually first broadcast in 2006, but it gave alarming account of how people really don't understand their companies 401k plans (and how that was never really earmarked to be an acceptable retirement plan anyway) and that they are not putting enough money away. Pretty scary.....
#11
Re: The Economics of the 2009 Economy
As you say times are very different now, as are we. There has been a generation grow up that has not known what it was to be directly affected by a war or some major economic fallout. This is also sadly, a generation that believes in instant gratification. I want, so therefore I shall have.
#12
Re: The Economics of the 2009 Economy
I don't think anybody knows but these so called 'experts' are now jumping on the gloom and doom bandwagon. Probably the same 'experts' who were talking about the best high tech stocks/best places to invest in property only a few months ago. Easy to be a Monday morning quarterback, where were they only 6 months ago.
I think we're going to have to ride it out for the next year or 2, conversely 92.8% of the employable market is working so hardly a depression.
The problem is most Americans have no savings or actual net worth for most if they lose their jobs they are screwed within weeks as they have no resources.
I think it's a great time to invest in the stock market for those that can do so
I think we're going to have to ride it out for the next year or 2, conversely 92.8% of the employable market is working so hardly a depression.
The problem is most Americans have no savings or actual net worth for most if they lose their jobs they are screwed within weeks as they have no resources.
I think it's a great time to invest in the stock market for those that can do so
#13
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,865
Re: The Economics of the 2009 Economy
http://www.calculatedriskblog.com/20...e-workers.html
#14
Re: The Economics of the 2009 Economy
It's extremely unlikely that that is true. The unemployment figures almost certainly understate the true rate of employment, as the "discouraged unemployed", i.e. those thst are no longer even trying to look for a job, aren't counted. Additionally, the unemployment rate takes no account of how many folks are working part-time simply because they cannot find full time employment. Here's an interesting article about the latter situation:
http://www.calculatedriskblog.com/20...e-workers.html
http://www.calculatedriskblog.com/20...e-workers.html
I don't disagree these are difficult times just trying to look on the bright side
#15
Re: The Economics of the 2009 Economy
We've all had our hours cut to 1 less day a week also. Financially it sucks, as Mr J's job are gonna be letting him go soon too. Our boss is trying to sweeten it somewhat by giving us our days off together, so I have 5 days off in a row coming up. When you do shift work and dont get weekends off this is a real treat. so I am going to use the time to try to do some of those house projects I've been meaning to do. Just trying to stay positive.
My heart goes out to everyone sturggling at this time. Close friends of ours went bankrupt last year and lost their house, and same with a colleague. It really sinks in when it hits close to home