So if our economy is really so terrible ----

[matthewmilner]

One of the reason is: People are more likely to spend money when they have very little income. Think of all the people taking these houses they couldn't afford. Think of all these people signing up for credit cards they cannot pay off. Psychologically - Most people are more likely to spend when they feel depressed. AI

i believe that people use credit cards to finance their "retail therapy" but i really doubt anybody got so depressed they went out and bought a house.

also - when you say "think of all the people taking these houses they couldn't afford" - the vast majority of home owners in the US have traditional home financing: sub-prime ARM mortgages only account for a small percentage of home loans. the problem is that these same loans with super high default rates.

out of all the people i know that own homes there's only ONE dude with an adjustable rate ARM - of course he's also the only person i know a month away from foreclosure.

and if you're into placing blame with this whole mess it most definitely doesn't stop with the homeowners - don't forget the mortgage brokers - appraisers - lenders and regulators who approved loans for people they KNEW couldn't and wouldn't be able to pay for them. as the saying goes, "it takes 2 to tango"

also - for full disclosure - my wife and are own a home and have a traditional 30 year fixed mortgage. we're self employed and the current economic state here in the US has dealt a HUGE blow to our business. we've been trying to sell our house for the last 18 months - lower our overhead and restructure - but no luck as of yet.

[Anderton]

So, I need to start doing some freelance something or other, because I'm straight burned out on the workplace.

I hear you, and Ohio is in pretty bad shape right now. But let me offer a little bit of (hopefully) inspiration...

The last big recession I went through was in the mid 70s (the ones since then, except for the current one, have been more like bursting bubbles). At the time I was writing articles for Popular Electronics and making very good bucks - it was a high circulation magazine that paid really well. Then the Editor died in a car crash, and they brought in a new guy who decided he didn't want music-related articles any more. So, my one source of reliable income was gone with no notice.

I was freaked, needless to say. Where else could I sell articles?!? I went to a newsstand and saw Guitar Player. I pitched them on an article on a DIY project, and it went over really well - with times being so tight, people were more interested in building than buying. This led to writing Electronic Projects for Musicians, which led to my Guitar Player column, which led to writing the Home Recording book, and those things really launched my career, even in a down economy. None of this would have happened if Popular Electronics had continued wanting my articles!!

It really is true that as one door closes, another one opens. It sounds like you were working for devious people anyway. Keep looking for that door that's opening, and I would almost guarantee that a year from now, you'll look back and be very glad you lost your job. Based on the posts I read here you're obviously a bright guy. Oh, one more thing: Get your employer to write you a letter of recommendation. He owes you.

[Dean Roddey]

Not to be Pollyannaish, but I think you could argue that many of the most successful people out there owe their success to a downturn. It's often only when that happens that people are thrown out of their rut and forced to examine where they are and where they want to be and decide to go out on their own or down a different path. Without that downturn that caused them to lose their job, they'd often have just stayed there in that comfortable situation and never taken the risk.

I'm hardly a highly successful person, though I hope to be, and this is my story as well. I would have never taken the risk to go out on my own if I'd not gotten thrown overboard during the Net bubble pop. It's happened to so many people who went on to great success. To be fair they often already had the itch and that just provided the impetus to scratch it. But still, they often not have scratched otherwise. I wouldn't have. I was making quite good money (though it didn't go nearly so far here in Silicon Valley as it would have elsewhere) and not working too hard for it.

In the long run, it's been a massive improvement in my quality of life, though I'm poorer than a bearded call girl most of the time. I'd have a hard time going back to the standard grind. And I believe it's going to pay off well in the end, at least it looks like things are heading that way now.

So anyway, sometimes you have to look at these things as a fated kick in the butt to re-examine your path and maybe vector off in another direction potentially.

[TimOBrien]

Race cars don't really use much in the way of gas. There is FAR less gas consumed by the race cars at a NASCAR or IRL event then the fossil fuels consumed to power the lights at a night baseball game, and I won't even go into the gas consumed by the people driving to the stadium. Do the math - 40 cars at 500 miles = 20,000 miles. At 5 MPG, that's about 4000 gallons. Now, for a stadium that has 20,000 people in it, averaging a 40-mile round trip to the park, that's 800,000 miles. At 20 MPG, that's 40,000 gallons - ten times what is consumed by the racecars.

Yup, I wasn't talking about the race cars. It's all the fans, the beer trucks, the concession trucks, the vehicle trailers, the TV crew trucks, the RVs and all the trucks for the stuff that supports the races.

Probably closer to 100,000 gallons per race and that's multiplied dozens of times weekend after weekend after weekend for every sporting event out there...

[the stranger]

It really is true that as one door closes, another one opens. Keep looking for that door that's opening...

 

Thanks for the good word, Craig!

 

And I was feeling a little pissy this weekend, sorry to be such a drag.

[bbach]

It really is true that as one door closes, another one opens.

And that is very true, as long as you are actively seeking that door that opens. Rarely does it come right to your doorstep, although I'm sure that happens to a select few.

A long time ago I found myself unemployed and lost. I really did not know what to do. On top of that emotional depression seemed to be setting in. Funny thing, but I'm an accountant/finance/sales type person, but I changed horses altogether, went and got my cdl and took some truck driving jobs. I never stopped seeking to better my employment though and always spoke about it to everyone I met one the job or off. One contact led to another and next thing you know I found myself making very decent money in the RV business. Been there ever since. You just never know what doors open up when you open up your mind a bit.

I'll never drop that cdl.

[Will Chen]

Texas seems to be less impacted than much of the rest of the country. Home values have shown a slight decline, but nothing like the horror stories I've heard on both coasts. Honestly, those hit hardest by this recession with regards to home foreclosures are those who bought way more house than they should have and put little to no money down.

 

We refinanced out of a 30-year into an 5-1 ARM after a year in our house, but continued paying at the previous mortgage level with all the overage going to principal. We just recently refinanced into a new 30-year. We had enough equity that our payment only increased $20 a month and if we sell even for less than the market rate, we would still have enough for a down payment on another place.

 

With regards to tickets to sporting events. The majority are priced towards the upper middle and upper income brackets where people can afford to spend even in a bad economy. I'm a huge basketball fan but can count the number of games I've bought tickets for on one hand. I just find it difficult to justify the expense.

 

When the gas price sky-rocketed over the past few months, we definitely had to be a little more conservative with our spending to ensure we continued to save 10% of our income. Now that prices have fallen, I'm going to try to continue our thriftier mindset...

[Billster]

Oh gee, how did I miss this well of misinterpretation...

Yes, agree with everything. Funny too because the stock market is built entirely on faith. We have this system set up where everyone is borrowing money from each other and paying it back on interest. The entire market is built on the idea of popeye. If you give me a dollar today, I`ll give you a dollar and a dime on Tuesday. However, to take this one step further, we have borrowed more than the system can comfortably allow and the system is starting to crack. So at this point, its not about faith anymore, its about being practical. If your output exceeds your input, then your upkeep will be your downfall.

The stock market is what's called a leading indicator. The state of the stock market indicates what is anticipated. I won't deny that there will be some difficult times for many people, but the fact is that we are at a time of historically low inflation, interest rates, and unemployment. So any increases in those areas are starting off below previous baselines.

If interest rates go from near zero to 6%, yes that's a lot - but 6% is a lot lower in historical context than 12% or 18%.

Same with unemployment. You could argue that there is a basic unemployment rate of 4-5%, consisting of people who can't work for reasons unrelated to the economy and people who just plain don't want to work. In that context, 6% unemplyment = about 2%. So while 8% might be a shock compared to what the last decade has brought, it is still historically average.