Do you personally feel that economy goes down?

[Super 8]

 

In this situation, will people attend more concert shows, buy more music - CDs or downloads - go to movies just to forget for some time about their problems? Will they create a "personal" mental and emotional cocoon?

 

 

Entertainment is increasingly personalized now. People watch movies at home, and they listen to music on their iPods. The sharing and discussion takes place in cyberspace. I think there will always be opportunities for gigs, but I think the old "let's go see some live music" days are on their way out. At least for now.

 

 

In years of depression in previous decades a lot of good music and artists emerged, I think more than in good times. I heard a phrase

[Lee Flier]

Well, personally I haven't been affected at all, in fact for the time being I have more work and more money than I've ever had in my life. So I can be thankful for that, and I truly am.

 

I do think there are some "adjustments" that needed to happen in the economy to correct for years of a somewhat artificially inflated bubble. Unfortunately that bubble bursting is hurting a lot of ordinary working folks, but ultimately I think it will be healthy for all but a few of the super-wealthy who created their wealth in the context of that artificial bubble. If it will encourage people to save money and not get into massive amounts of debt they can't handle, create an impetus to use alternative energy, etc. then that's all to the good. An economy over-stimulated by debt and subsidies isn't a good thing for anybody.

[GY]

You're going to have to figure out how to survive because this country is headed for third world status and has been for some time... production facilities have all but disappeared... the true wealth of a country is tabulated by it's production of tangible goods.. those are disappearing rapidly year by year. The masses have been hoodwinked.

[temnov]

Well, personally I haven't been affected at all, in fact for the time being I have more work and more money than I've ever had in my life.

 

Lee, what are you doing to be so successful and stable? Except writing in EQ from time to time

 

I don't think this is a time of crisis

 

I think it is a crisis. I work for international trade company and I can see where all economic indicators are pointing. We don't feel it just yet

[Dean Roddey]

I guess that shows why economics is an art and not a science, since I've heard plenty of opinions by well known economists that all the economic indicators are not pointing in the same direction.

 

BTW, the other thing that bothers me is how politicians consider their getting into/staying in power is more important than the economic health of the country. The party looking to get into power will play up how bad the economy is, and reduce confidence and of course that helps create the very circumstances that they need to help them get into office. And the party looking to stay in power will fudge the numbers and obfuscate to make it sound better than it is even if there really are problems.

 

They seem to often consider their being in power such an unambiguous good thing that it's worth playing games with the economy to achieve that.

[dahkter]

 

You're going to have to figure out how to survive because this country is headed for third world status and has been for some time... production facilities have all but disappeared... the true wealth of a country is tabulated by it's production of tangible goods.. those are disappearing rapidly year by year. The masses have been hoodwinked.

 

 

My only misgiving with this logic is that we still have a lot of innovators, and alot of the wealth of this country is being created with new inventions, and with marking up goods created by other countries.

At the same time, I feel that GY's account is basically true. It seems to me that the spending of our government is out of control, much like it's average citizen. Read the link I posted on page 1 of this thread, we're headed towareds a 53 trillion dollar shortage.

I really don't see things getting better or turning around, it seems like we're on a one way path to financial ruin as a country, and I don't see any politicians ever mentioning the big picture to any of their constituents.

[spokenward]

I think it is a crisis. I work for international trade company and I can see where all economic indicators are pointing. We don't feel it just yet

 

I'm in two businesses. One is just fine, relying on work that was begun as much as five years back. The other relies on import and exchange rates and business confidence. That business is deeply screwed right now. The people who say that there isn't a crisis are whistling in the graveyard.

[BlueStrat]

 

I think you're oversimplifying things a bit - the oil market is also biting every sector of the economy in the ass, at the same time that all of this speculation comes home to roost. Food prices are rising, along with the costs of durable goods - and when all that goes up there's less discretionary spending, etc. etc. Overplayed or not, I'm sure as hell feeling the economic crunch.

 

 

Unfortunately, the oil problem is self-inflicted.

[BlueStrat]

 

there are some lenders who knowingly lent to people they knew were at risk to have a problem with it.

 

 

Indeed. I sold loans in the 80s in California and watched the same thing happen. They do this because when the market is hot, the bank can actually make money on a repo. When property is enjoying a 10-20k a month inflation rate, a house they loaned 200K on might sell again at 350-400K, so the repo is worth it even with the costs factored in. The problem is when the bubble bursts, and prices fall rapidly, the bank gets stuck with houses they can't sell or have to take a loss on.

 

I should also point out that many defaults aren't repos at all, but merely people walking away from mortgages they can't afford. It may be the bank's fault for loaning to a degree, but it's also the consumer's fault for trying to make it in a mortgage that they knew full well was only going to adjust upward and require 50% or more of their income. One of my friends built a 'dream house' for his wife, way more house than two people need, with a mortgage that is only 30% of his income; however he put sweat equity into it and put another 75k or so on credit cards for appliances, flooring, fixtures, tile, granite, landscaping, etc etc, making his payments well over 3 k a month, or about 60% of his income.That's his fault, not the bank's, and he isn't unique in doing this.

[Lee Flier]

Lee, what are you doing to be so successful and stable? Except writing in EQ from time to time

 

It's my moderator gig here at HC - when people get depressed, they tend to start flame wars and thus moderators will always be needed in times of economic strife.

 

But no, seriously... I'm self employed in the software development biz. I do the kind of work that most businesses will need no matter what the economic situation, and I also tend to look for clients who provide essential goods and services as opposed to just moving money around. There's something that makes me queasy about working for an investment firm or anything like that. When I first started in the field I worked at a couple of mortgage companies - I even worked at Fannie Mae for a couple of years. And I could see that the way the mortgage companies were doing business was likely to land them in trouble, even being completely wet behind the ears at that point. In fact, one company I worked for went out of business shortly after I left, and they'd been around for many years.

 

I do think times are really tough for most people who depend on gigging or audio recording to make a living, but for reasons that have nothing to do with the current economic downtown. I still make some money doing both, but I'm really glad I don't have to in order to pay the bills. I'd have to be taking an awful lot of gigs I hated, although that's always been true and the reason I decided not to do it fulltime in the first place.

[Lee Flier]

 

My only misgiving with this logic is that we still have a lot of innovators, and alot of the wealth of this country is being created with new inventions, and with marking up goods created by other countries.

 

 

Yes, agreed. I'm doing a lot of very innovative work right now with Second Life, which was created by a US company, and I'm doing the work for a client who is also a very forward thinking and stable US company who is very concerned with innovation and has a proven track record of it. My client isn't hurting for cash for that reason, and you hear nary a concern raised by any of their people to the effect that they're worried about the economy. They're more worried about staying ahead of the competition and continuing to innovate, and they even don't mind the idea of sharing IP and so forth with talent in other developing countries to do it. That's the way of the future, I think... we are moving toward a global economy and I actually don't think that will be a zero sum game, as some seem to feel. In fact I myself felt differently about it a few years ago, but I have a better picture now where things might be headed and am not so pessimistic.

[Lee Flier]

I guess that shows why economics is an art and not a science, since I've heard plenty of opinions by well known economists that all the economic indicators are not pointing in the same direction.

 

Yep, it really is anybody's guess at this point, because the economy is changing so fast and I think even the indicators of what makes a healthy/unhealthy economy are changing. Which I think is a good thing because I've never felt the traditional metrics we've used are very good, especially for the vast majority of "just plain folks" trying to make a living.

 

BTW, the other thing that bothers me is how politicians consider their getting into/staying in power is more important than the economic health of the country. The party looking to get into power will play up how bad the economy is, and reduce confidence and of course that helps create the very circumstances that they need to help them get into office. And the party looking to stay in power will fudge the numbers and obfuscate to make it sound better than it is even if there really are problems. They seem to often consider their being in power such an unambiguous good thing that it's worth playing games with the economy to achieve that.

 

Yeah... not to mention smearing their opponents' character and all sorts of other things that I don't think are at all good for the country. Totally hear ya on that.

[Rudolf von Hagenwil]

The US economy is the biggest miracle ever! The government practical bankrupt with a 70 trillion dept and without chance to close this fiscal gap ever and the boss of the syndicate is still writing big checks everyday. The most likely scenario is that the government will start printing money to pay its bills.

[rasputin1963]

 

Yep, it really is anybody's guess at this point, because the economy is changing so fast and I think even the indicators of what makes a healthy/unhealthy economy are changing. Which I think is a good thing because I've never felt the traditional metrics we've used are very good, especially for the vast majority of "just plain folks" trying to make a living.

 

 

 

It seeme to me that, starting in the early-90's, a new class of American "Haves" arose, and with their emergence, they drove up the general cost of living for everybody else. There was, and still are, a class of people in the USA who used to consider themselves "middle class", who, during this time, sat and watched groceries, gas, consumer goods, housing, etc., sort of sprout wings and takeoff without them.

[Lee Flier]

It seeme to me that, starting in the early-90's, a new class of American "Haves" arose, and with their emergence, they drove up the general cost of living for everybody else . There was, and still are, a class of people in the USA who used to consider themselves "middle class", who, during this time, sat and watched groceries, gas, consumer goods, housing, etc., sort of sprout wings and takeoff without them.

 

Yes, agreed. It used to be possible to enjoy a decent quality of life without making a ton of money. Now that's getting harder and harder.

 

I do think the price of a lot of consumer goods has gone down, and there are a lot of relatively poor people with a lot of fancy electronics for instance. But the essential stuff - housing, food, gas, utilities, medical care/insurance - seems like that's all gone way out of reach for many once middle-class folks.

[rasputin1963]

In this conversation, it is almost inevitable that we arrive at the subject of WAL-MART and how it has moved into the new American economic situation. Anyone seen that scathing documentary on how WAL-MART basically rapes both America and the Asian sweatshops?

 

WAL-MART always reminds me somehow of Russia's MELODIYA RECORDS. For decades, the Russian government had monopolies on every sector of business, and they owned MELODIYA, for years Russia's only record label. Regardless of the style of music, Russians knew that it would emerge on MELODIYA.

[nat whilk II]

I first heard about "no documentation loans" about 5 years ago, and to quote my immediate response:

 

The lenders have gone insane again. Like the savings and loan people did in the mid-80s.

 

"No doc" loans are the home and equity loans that became the latest thing...no tax returns need be turned in to the loan officers-no third party verification of your income....just the voodoo credit "score" and your WORD that you make such and such and you're worth this or that. "Liar Loans" they quickly became dubbed IN THE BANKING INDUSTRY ITSELF...excuse my blood pressure spiked....easy boy, easy.

 

The banking/lending industry creates a terrific amount in instability and economic suffering in the States with their booms and busts. They loosen up lending criteria, they have a boom, they pay commissions to their loan officers-big bonuses to management, their stocks soar, and the whole thing becomes a feeding frenzy that the regulators can't keep up with, until the bubble finally pops.

 

Vote for me and I'll go after the lenders. Credit cards and mortgages first up for a good whippin. They have grown predatory and destructive to the national economy. I'll slap'em around a bit, you bet. Ain't no stinking banking lobby owning me.

 

nat whilk for emperor (Presidents can't get anything done)

 

no worthy contribution turned down.

 

paypal accepted. wait...is paypal a bank??? never mind.

 

nat whilk ii

[Dean Roddey]

Many great business people argue that far and away the best time to expand your business is during the down cycle. When everything is going gangbusters you don't have the time to really do it right and with care. Everything is crazy and there's not enough time to really concentrate on expansion and so you end up often throwing away good money.

 

One thing I've noticed, though it seems to be a little less true of late, is that by the time most of us really understand that the up cycle is really cranking, it's already crunk mostly. And by the time most of us really understand that there's a down cycle, at the grass roots business level, the changes and investments and innovations are already occuring that will bring about the next up cycle.

 

News travels pretty fast these days, but of course much of it is just speculation and not fact. The real facts, which kind of require looking back at a previous quarter or year's results, always lag behind the facts on the ground.

[Dean Roddey]

 

The lenders have gone insane again. Like the savings and loan people did in the mid-80s.

 

 

And this is related to my other point above. It's not like no one knew what was going on. And it's not like no one knew what the inevitable result of the internet bubble was going to be. But no party in power when things are going well is going to have the guts to tell people that they are being stupid and to slow down. That would require statesmanship and courage, and would risk your losing next time around. But if someone really cared more about their country than their poltical career, they'd do it.

 

But instead we go through these cycles where someone has the bright idea, "I know, if we just back off and let business do whatever it wants, that'll really be best for everyone in the long run." As though this didn't just happen how many times over the last century with the inevitable result of corruption and greed and inevitable collapse.

 

Of course, for the well off, this is not that bad a deal. You make money by the truck load when things are up. And when it crashes, you still have plenty of money to buy up properties and companies in distress, so next time around, you'll have that much more money to run through the cycle.

[spokenward]

 

In this conversation, it is almost inevitable that we arrive at the subject of WAL-MART and how it has moved into the new American economic situation. Anyone seen that scathing documentary on how WAL-MART basically rapes both America and the Asian sweatshops? WAL-MART always reminds me somehow of Russia's MELODIYA RECORDS. For decades, the Russian government had monopolies on every sector of business, and they owned MELODIYA, for years Russia's only record label. Regardless of the style of music, Russians knew that it would emerge on MELODIYA.

 

 

http://www.pbs.org/wgbh/pages/frontline/shows/walmart/china/trade.html

 

This is related to the discussion. In the first Clinton administration your fellow Texan, Lloyd Bentsen tanked the dollar against the Japanese Yen. Then, the new China trade policy.

 

http://www.state.gov/www/policy_remarks/1998/980617_roth_china.html

 

Now the dollar is back to 1990s levels against the Yen assuring China's continued expansion with a permanently weakened Japan. The next disaster is the inevitable movement of assets out of dollar denominated vehicles. If you blow out the value of the dollar and diminish the value and credibility of our markets we are screwed for generations.

 

China holds foreign reserves with a value of of 1.5 trillion USD.

[rasputin1963]

 

Many great business people argue that far and away the best time to expand your business is during the down cycle. When everything is going gangbusters you don't have the time to really do it right and with care. Everything is crazy and there's not enough time to really concentrate on expansion and so you end up often throwing away good money.

 

 

 

Yes, this is how ol' Joe Kennedy made a killing sellin' hooch....

[SKEETERtunes]

European music goods (plug-ins, monitors, pre-amps, etc) cost more, you have less customers in your studio than before, in your district you can see more houses for sale than you