How long will this recession last?

How far can you stretch your arms out?

When people accept that their homes are only worth half of what they paid and interest on a mortgage reaches 2%

My tea leaves agree with your tea leaves... but mine have a footnote about the american dollars' value dropping even more.. possibly clearing the way for either the idea of, or possibly the construction of... a global currency. I do not think this is a good thing.

My tea leaves also say that we shall see a drop in a few other countries' economy as well...

This would require people to really pay attention to WHERE their money is going and the quality of the things they are buying.
That means financial responsibility in a way some americans are not used to.

Good luck rocking that boat.

The way I look at it--- The first home I bought ( with a mortgage ) I built myself Cost including land.. Two thousand pounds (Australian) Sold it 4 years later 3.500 pounds. Then bought a 100 year old wooden home for 16.000 dollars ( we had changed to metric) and raised it up to a 2 storied one and completely renovated, sold 3 years later for $35.000.00 Had already bought a 5 acre block to build on bought that for 15.000.00 sold that for 28.000.00without building 4 years later. Had bought a 1 acre block close in to town on the water and built a luxury 150 sq meter home on it for $120.000.00 and lived there for 3 years and sold again for $700.000.00... Then bought a big home on the river closer in to the town for $350.000.00 where we still live 20years later we are also in a depression here in Australia and 3 months ago our home ( that I spent $100.000.00 on) was valued at 1.5 million, I doubt if anyone would be interested in unless I dropped the price to $900.000.00 but in reality it's only worth $450.000.00
. From $4.000.00 to 1.5 million to $450.000.00 in just over 30 years and it's still only a house with a bed where we live same as the first one.

Maybe some basketball players might come pretty close. That is to say that the majority wouldn't be able to meet the "stretch."

You managed to roll over your properties into more valuable properties every time you acted on it, so you did well. We paid $50,000 for "this" home, and it's now worth over $1.2 million, but "worth" doesn't mean anything, because we're not selling to move.

Your tea leaves read like mine, but they're not giving me a solid timeline.

when i look back at the life of my parents (and most other europeans) , i have to conclude that things are still pretty good in north-america .

our infrastructure is not destroyed and there is no widespread poverty .
so we should be able to whether the economic downturn - but we have to realize that we cannot always expect the next year to be better than this year . we cannot expect to make more money every year . we may have to keep the car a couple of years longer .... the kids (and the grown-ups) may not be able to afford all the toys they desire ...

if we are at least somewhat reasonable we should be able to overcome the economic problems within the next three to five years ; but if we continue buying stuff we really have to have but cannot afford ... i could see things going really ugly .

perhaps a bit of a shock will actually do us good - certainly not in the short-term - because many people under the age of 50 may have trouble understanding why things shouldn't "automatically" improve every year .

i think the economists and politicians giving their "considered" opinions cannot really tell us what they really think . if they do , they might be accused of painting a bleak picture and causing a run on the banks .

it makes me think of general shinseki who dared to speak his mind and was given his walking papers ... and no one in position of power (such as colin powell) would dare saying : "perhaps we should listen to him . does he know something we don't know ? " .

similarly , politicians and economists speaking "on the record" have an official line to keep the masses from getting too concerned .
president bush was saying just today that he has "confidence" in the economy - that'll keep a lot of people re-assured for a while .
hbg

Looking back "that far" tells us how bad it once was, but the 64-thousand dollar question is "how bad is it going to get" for the majority?

As Obama opined today, things are going to get a lot worse before it gets better, but he still failed to provide us with the answer to the question "how long will this recession last?"

I agree; it's gonna get a lot worse, and the small uptick in the market for now doesn't mean too much. More bad news such as large layoffs from big companies and their forecast for a slower economy will surely impact the mom and pop operations who barely eeked out a living.

When we consider the macro economics of how our economy managed to grow during the past decade tells us everything we need to know. Most families went into debt to purchase those silver platters and everything on it; paying upwards of 20% interest. Since three-quarters of our economy depended on consumption, and there is no more "free" credit debt, we're going to see a downturn that's going to be painful for another 20 to 25% of families before this is all over.

Some people look at the past recessions and how they suffered based on their unemployment rates compared to the 6.7% today, but that's a false measurement of what the short-term future holds for more workers getting a pink slip. We've lost some 1.2 million jobs this year, and the auto company bust estimates the unemployment will double those numbers.

If we estimate the American workforce to be about 154 million, we're still in pretty good shape. That's if the unemployment numbers don't continue to double up every quarter into 2009.

The government must continue to make sure those able to afford to buy homes and cars have the cash available to them.

For people who were able to afford their mortgages before this crisis should be able to refinance them with lower interest rates/longer terms to stop this bleeding.

We need the government to apply intelligent solutions to the current crisis without harming the future of all economic activity.

That's a tough road to create from not having road maps of experience to follow.

I do not think any of the pundits can give an "unqualified" prognostication, since the length of this economic situation depends on what is done with/to the economy. For example, if the draft was reinstituted, including women, that would take workers in the 19-21 age range out of the labor market. If a percentage of them then went to college on a GI bill, that would take that percentage of the 22-26 age range out of the labor market. If there were actually jobs for the older unemployed, with a livable wage, then the economy could get moving again, I believe. It will take creative thinking to develop ideas. No ideas? Then we can get used to an existence different than what our older relatives enjoyed, I believe.

It is possible that focussing on the economy is a red herring of sorts. I mean that to prevent the nation from going into a depression, changes may be made to our way of living. So, while we will not starve, we may not enjoy certain things prior generations enjoyed. Read a book about life in the early fifties, before so many people had a car, and a house , and an air conditioner, and two/three tv sets. In other words, regardless of the economy, and what the news tells us, the party may be over for many people, as far as living large.

Let us hope that somewhere in the U.S. working quietly in a garage or lab is our next Henry Ford or Bill Gates who will successfully get us going with a currently unthought of booming industry.

Many scientists around the world are looking for that invention that will create jobs and reduce the damaging effects of CO2, factories that pollute, and increase the living standards of humans.

Now should we be Pollyannas or Cassandras?

Both; maintain your honesty and continue to have hope. It's bad now and it's gonna get worse, but there's some light at the end of the tunnel - as always. Probably unlike anything we've experienced in the past, but a form of recovery that will cease the bleeding of homes, jobs, and hope.

One of the tv channels should start showing The Honeymooners with Jackie Gleason. That may get people into the mood of doing with less. Life was not bad; people had friends, and there was a certain civility between men and women that I do not know if it still exists everywhere?

Old t.v. sitcoms will not change the American mood of doing with less. It's called the lack of credit and money.