Is There a Sense of Economic Fear Among the People You Know?

[Broken Arrow]

There's certainly a dread, perhaps even some fear, around my work place. There's a lot of uncertainty here as cut-backs are being implemented.

Some here are scared out of investing in retirement at all (401k and IRA) simply because they say they're going to lose money in the market. I always have to bite my tongue whenever I hear that, because I'm not here to change people's minds that don't want to be changed to begin with. I just work here.

[Pitman]

My friends could care less. Most weren't working before the "recession" hit, and won't be working after the recession passes. They party, drink heavily throughout the week, chase skirt, and wake up everyday no earlier than 1pm. I always tell them they are all living the American Dream, and I'm the only sucker who has to get up everyday for work. Obviously the last statement is drenched with sarcasm.

[FrugalFish]

Yes, most around us are worried. Our area is not a hotbed of jobs and economic security, and the work my DH does tends to suffer cutbacks under a democratic administration.

Years back, my DH was one of those who was looking for work for a full year after he was ineligible to file for unemployment. I'm glad to see that more and more people are understanding how misleading unemployment numbers can be.

[EEinNJ]

This "crisis" is a hoax. It makes a great story for the news, gives the government an excuse to spend like crazy, and lets Wall Street off the hook for colossal greed once again.
People forget the economy is cyclical. Remember the .com bust? Real Estate is on about a 7 year cycle. I also remember the "energy crisis" of the 70's, perpetrated by oil companies and OPEC, 10% unemployment and 13% interest rates in the 80's, the S&L "crisis", recession of '93.
The media compares the DIA and S&P 500 from 1997 to now, but that's false, too- because it ignores the value of dividends, stock splits, and that it's not even all the same companies!

[Ima saver]

Our area is badly hurt by the lack of home building. None of the men around here have jobs any more and things are getting worse.

[disneysteve]

This "crisis" is a hoax. It makes a great story for the news, gives the government an excuse to spend like crazy, and lets Wall Street off the hook for colossal greed once again.
People forget the economy is cyclical. Remember the .com bust? Real Estate is on about a 7 year cycle. I also remember the "energy crisis" of the 70's, perpetrated by oil companies and OPEC, 10% unemployment and 13% interest rates in the 80's, the S&L "crisis", recession of '93.
The media compares the DIA and S&P 500 from 1997 to now, but that's false, too- because it ignores the value of dividends, stock splits, and that it's not even all the same companies!

I don't think it is fair to say it is a hoax. What is happening is very real. The money I've lost in my investment accounts is very real. The tens of thousands of people who have been laid off are very real. The companies that have gone out of business are very real.

We can argue all day about what caused it or who is at fault, but that's a different issue.

Also, the current situation differs a lot from some prior episodes for one significant reason. This time, it is very much a global phenomenon affecting countries around the world, not just the US. The same bailouts that are happening here are also happening in UK, Germany, Italy, Asia, etc. The problem is real and it is huge and it isn't likely to get better anytime soon.

[EEinNJ]

The old joke is, it's a recession when my neighbor looses his job, it's a depression when I loose mine. My parents grew up during the (real) Depression, and have stories. What we are seeing now is not even close.

Companies fold or merge all the time. Remember Jamesway, Channel, Rickel? Long gone and replaced by Target and Home Depot. Remember MBNA? Swallowed up by Citibank, (my cousin lost his job) and now they're choking on it. Lucent- used to trade at $55, went to 2 bucks, now merged with Alcatel.
Compaq? Now part of HP. Drug companies- too many mergers and acquisitions to count

My point is the word "crisis" is overused. These changes occur across industries in good times and bad. This time, a real estate bubble bursts, oil prices spike on speculation, and the finance, construction, and auto businesses take the hit. Meanwhile a doctor's office manager walks into my wife's store and buys 600 bucks worth of clothes. I'm busier now at a small engineering business than I was 2 years ago.

[cschin4]

but we all expect to be okay in the long run

I never used to worry about downturns as I just expected things would be okay as well. Now, I am not so sure. Now, I think there is a real fear of Financial Terrorism. My money is not in cash sitting in my basement. For all I know, it is just an electronic blip on my computer or a printout of what they say I have. Our money is not sitting in the bank vault as in days of old. What is to stop anyone including the govt from electronically stealing everyone's money? In fact, in a state of emergency, the govt can freeze and sieze bank accounts. This is a frightening scenario as things deteriorate there will be a rise of violence and possible police state.
Sorry, I just cannot take a pollyanna approach right now. I feel that if I do, it will be to my detriment as the writing of the direction we are headed is on the wall.
So, the real hoax has been perpetrated on us. Is the stock market really just a giant Ponzi scheme? The vast majority of Americans were convinced to invest their entire retirements and wealth into it. I am not sure what is real anymore. Sorry to sound so down.
As for me, I am doing fine right now. But, others around me are struggling and there are job losses, etc. And, personally, I have lost a lot in my retirement accounts though I have time to recover I don't believe that it is going to.
I really see no basis for recovery. Our manufacturing base is gone. We don't make much of anything here anymore. So, on what basis would the economy recover other than just on our wishful thinking?

[pdc001]

Baby Boomers

I would say the people most affected by this would be the baby boomers approaching retirement.

This includes my parents who have lost tons of $ in the stock market b/c they were trying to make up for lost time and were too heavily weighted in stocks.

This has smacked them in the face just after they crossed the 60 YO mark.

Now, timelines are adjusting. Dad is planning to work longer which depresses him and keeps jobs from opening up for younger people.

As for the younger set, I have 3 friends a JPMC who bite their nails daily and that is one of the "healthy" banks.

I agree this too shall pass but it is not going to pass easily or quickly.

[cschin4]

This time, it is very much a global phenomenon affecting countries around the world, not just the US.

Yes, and I find it difficult to believe that all this is caused because a handful of people overextended themselves on homes. 95% of mortgages are being paid on time so I think that is bunk. ANd, yes, Americans have been overspending on CC's but how could that in itself collapse the global economy. Obviously, there are far deeper issues going on.
But, we may never know. We don't know why there was a run on the bank on Sept 18 that led to these bailouts. Funny how the media choose to give this very minimal coverage.
But regardless, there just isn't going to be money available to people in advance of when they need it. If we learn that lesson, we might all end up better off.

[disneysteve]

Yes, and I find it difficult to believe that all this is caused because a handful of people overextended themselves on homes. 95% of mortgages are being paid on time so I think that is bunk. ANd, yes, Americans have been overspending on CC's but how could that in itself collapse the global economy. Obviously, there are far deeper issues going on.

Absolutely. The problem is that multiple things happened at the same time. Lax lending rules and people overextending themselves on home purchases led to the housing bubble. Americans racking up record levels of personal debt, including CCs and HELs, added another level of trouble. Financial service companies chopping up and repackaging debt instruments into new investment offerings that nobody really understood compounded the other errors and left banks over-leveraged.

There isn't one thing that caused the current situation. There isn't one group of people who are to blame. We're seeing the result of a "perfect storm" of a bunch of things going wrong all at the same time.

[Snodog]

I did a poll at another forum I frequent where everyone thinks the sky is falling and about 3 out of 4 people thought the government was going to default on its debts this year.

I think things are bad and I hope this is the worst recession I ever have to live through but I would be shocked if we didnt see some economic growth by this time next year.

I don't even listen to the gloom and doomers like Glenn Beck until they lighten up and stop scaring the people. I think we will look back years from now and call this period "the great recession".

[Joan.of.the.Arch]

Our money is not sitting in the bank vault as in days of old. What is to stop anyone including the govt from electronically stealing everyone's money? In fact, in a state of emergency, the govt can freeze and sieze bank accounts.

I don't think in days of old anyone's money was just sitting in a vault. That would be a storage business, not a bank.

I wanted to ask you about the seize and freeze idea. I have never heard this before and am skeptical. Is there precedent other than with court order in a criminal investigation or in the case of convicted criminal whose deposits were part of the crime?

What is "state emergency" that could enable seizure and freezing? Martial law declared by the president? (I think some states give their governors power to declare martial law locally. They do have their National Guard, when not away in foreign lands, anyhow.)

Anyway, I don't know anything about this, but would like to if it is not too speculative.