The Economy
 

Without getting into a policy discussion, does anybody else here think that the so called improvement in unemployment numbers reported today and the rising stock market is little more than a bubble?

Regardless of whether one thinks the fundamentals of the economy are weak or strong, what I am seeing is that virtually nothing has changed except for an infusion of cash on the tab of the federal government. Perhaps I am wrong here and somebody can enlighten me, but I think we are teetering on a the brink of a new deeper crash in the coming year.

Maybe, but I sure as hell hope not...

We're not nearly as bad off as we were in the early '30s...at least not yet.

Interesting little tidbit - in 1929, Ford sold well over a million cars. Sales dropped in the following years, reaching their nadir in 1932, with sales of just over half a million cars. Probably wouldn't have sold that many except that's the year they brought out the V8. Didn't catch up to 1929's sales until 1936. This was despite many government programs. What probably drove sales was that all those cars sold in the '20s were finally wearing out, and people had to replace them.

It's possible that the so-called improvement is because people are dropping out of the job market, rather than because people have gotten jobs. Unemployment isn't a measure of people who aren't working; rather, it's a measurement of people who want a job but don't have one.

My mother and sister both gave up looking for work and went to school (crash course in medical paperwork, I think), so they wouldn't count as unemployed right now but once they're out of school they will (unless they land jobs).

Well one thing that stuck me on the news reports lately is that the companies that are supposedly starting to see recovery and actually hire people are those that would be benefiting from recent stimulus and incentives such as suppliers for new construction. The company I work for on the other hand has seen revenues continue on the decline this last quarter. (Fortunately they seem to be out in front of the liabilities there with adjustments to work force and capital spending, but the business is clearly continuing to shrink.)

I don't know where you heard that, but I've got an ear in the construction industry and there is definitely no work for anyone.

about the only reliable good news i've heard is that the national consumer savings rate is actually going up for the first time in many years.

if things get better, there's a chance illadvised spending will return of course. but, hopefully people have learned there lesson. and if they have, we may not see a 7/11 or a starbucks on every street corner for much longer.

like energy, we need sustainable/renewable jobs!

like energy, we need sustainable/renewable jobs!

How Bumper Sticker.

The only thing that is going to guarantee your future is you.

my company stock has gone from a low of 70 cent a share to recenly around the $5 range as of late. before all of this, we were around the $6-7 range. we are seeing a little bit of a recovery.

I recently went to a team building meeting with our CEO and he brought up a good point about the recent upturn. he said that unemployment benefits for the ones that got laid off at the beginning of all this mess was about to end and that we may see another small downturn. he said that the future looks bright but we may see another dip before then.

I work for a electronic chip development company. I don't want to say the name of it but that did give me some hope on the future. there again, I can't say how accurate all of this is.

I think that certain parts of the overall economy are going to come out of the recession faster than others and likewise, other parts will take longer to come out of it.

I predicted 10% unemployment and 10% inflation as well as a 25% reduction in Federal tax revenues by the end of 09. I made that prediction last summer.

I am still waiting for the 10% inflation, but it is being devalued by the spending spree of the Federal Government. It's inevitable.

The stock market dropped from 14k to just over 6 k, and they are trying to hype up the 50% rise to 9k.

Its still down from 14 to 9 and may not see 14 again for a decade. If you factor in the inflation it may take 25 years especially if we see the Carter era inflation return.

People were dumb playing the margin on investments that promised a return based on valuations increasing at rates that were simply unsustainable.

I haven't had a job in a decade, as long as you describe a job as a paycheck with deductions.

I made more money in that same decade that I made in the prior 20 years.

regards
gary

nice gary! a steady, deliberate, frugal, and planned way is the one to prosperity(for most anyway).

if consumers knew how much tobacco, beer/alcohol(sorry clencher), lattes, car payments, big screen tvs, and the like REALLY affect savings and subsequent wealth, many would most certainly be shocked.

clark howard took a latte as an example on his radio program once. he considered the price of a latte for 5 working days and calculated a modest return in an investment accounting for compound interest over many years.

the amount was rediculous!!! how much more does the average consumer waste beyond the cost of a latte?

Actually, unemployment is a measure of people seeking benefits. If people are searching for a job and run out of benefits they aren't counted in that number even if they are still looking. It's possible that a large number of people have just run out of time to find a job and still get help.

Clark Howards example reminds me of a similar thing Dr. Phil did with an obese person....brought on stage, tables with the number of sodas that person drank in a year.....then pointed out that just eleminating them would cause a weight loss of over fourty pounds!

There was a story recently about Steven King tallying his TV time and being really shocked!

Little things matter.

Well the construction industry that I am referring to seeing turnarounds is more industrial and related to infrastructure, not commercial or residential building. Regardless, it seems every other week I hear some news commentator suggest that things may just be turning around, but I don't see that connecting with reality.

We still don't levy tarriffs on imports like we used to and jobs are still being sent overseas while the money supply has done nothing but increased and will just drive inflation against fewer jobs and lower domestic wages. Easy or difficult credit doesn't mean squat when the number of borrowers and amounts they can repay are on continuous decline. Those invested heavily in stocks and real estate should consider their holdings very carefully before the current rebound finally bursts - and it probably will.

i'm w/ ya on that. but lowering the corp tax rate would help as well.

the reality is that many corps are bound to fail either via poor management or lack of comsumer interest. as previously stated, non-necessities like convenience stores, tobacco, beauty salons, etc SHOULD be abandoned by the most informed consumers. will they? if things get worse...

Agreed 100%.

I'm lucky to be at a company (all private sector - no construction and no government contracts etc.) who is actually thriving right now, against some pretty steep odds. But we're the exception.

The economy is being artificially boosted by government spending (pork or stimulus, depending on your perspective) but we're living on borrowed time (and money). Even if the economy were to take off in a very real way, we'd still be burdened by the extreme debt. In fact, I think I heard the national debt will grow by a full trillion dollars this year alone.

Commercial real estate is a disaster, values are plummeting.

I'm a protectionist, sorry. More import levies = smaller trade deficit = more American jobs.

-BC

Maybe, maybe not. I'm still trying to figure how inflation will affect stock prices - it has the potential to go either way (high prices could mean high profits). Historically it's been a matter of timing, there is potential to make good money during inflationary periods. I'm thinking of getting out for a few months, letting the bubble burst, then riding the inflationary wave. We'll see...