Where is the US economy headed?

That's what we're doing hawkeye10. I have one of those good incomes. I don't care that I'm only getting 2% in my money market account, it's better than spending the money on crap I don't need or putting it in the market right now (I don't have time to day-trade).

I am still socking away 10% of my income to my 401k (which now looks very ugly). And my house has dropped in value by 20%, but my income has actually increased since this whole thing happened. And I'm hopeful that I'll get a promotion in the next few weeks (along with a 15% raise).

So, I have disposable income and there is no way I'm spending any of it.

I agree 100% with your post here.

They're out there CI.

And actually, now that I think about it I don't know a single person who has lost their job, and I work in the financial industry.

Oh, I'm not disagreeing that there won't be some winners; it's just difficult to have much confidence that the picture will improve for the majority.

That you can even think you might be getting a 15% raise in this climate is very unusual to say the least. You are an exception, not the rule.

I'm glad I'm not in the workforce today trying to make decisions on pay and benefits as I used to when I did work, because the short-term future doesn't look promising at all. Cutting work hours and/or employees are difficult decisions that most companies are faced with.

In all this banter, I'm not so worried about "me" or "us." We have enough savings and social security to keep us going for a long time, and we don't have any debts except for our equity line of credit we took out last year to renovate our house - which we pay more than is necessary every month through auto pay.

We're also thinking about helping our son buy a home in Austin in the fall.

I have sympathy for all those thousands of folks with young children who are losing their jobs and homes. That's all.

Do you read the newspaper or listen to news on TV? Millions have already lost their jobs with more losing jobs every day.

I know it's happening, I just find it strange that I don't know any of them.

That's not surprising; I think our circle of contacts outside of our circle of friends and family probably shields us from what's really happening in big numbers. However, within our circle of friends, most are already retired.

CI:
Heard this AM on Morning Joe: If AIG is too big to fail, let it! The tales of bonuses after bailout are too much for me to bear! I want to barf all day for being honest, saving what I don't need to spend, etc. In other words, playing by the rules. I'll never make a million dollars in my lifetime, but God has provided.
Am I stupid? With the angel face of Bernie Madoff, should I have duped people too?

AIG is just a proxy now for all the major European and American banks. When we say we're giving AIG another 30 billion, we aren't, really; we're giving it to other investors in AIG so that they don't sink. It's just the vehicle we are using to do that.

Cycloptichorn

We're now officially below the 1981-82 recession.



Cycloptichorn

Cyclo, What bothers me about your graph is that all the decline in unemployments starts from zero. In actual fact, there's always some unemployment before the drop, so they're not comparing apples with apples.

Yeah they are - it's 'decline from the peak month of job growth.'

Cycloptichorn

I really want to see further to the left on this graph, before the peak month.

That assumes that our government has a handle on the unemployment numbers. I don't know if you've noticed or not, but they keep revising their numbers for the past four months.

I think maporsche has the right idea; showing the left of graph will probably have more meaning.

That's typical, but I agree - I have always maintained they manipulate these numbers strongly through 'seasonal employment' and other BS factors.

Cycloptichorn

we live in a city of about 120,000 in eastern ontario .
most people are employed by queen's university (a large university for a city this size) , several federal prisons (canada's prison capital) , two hospitals attached to the university (many researchers employed) , a large military installation (staging base for afghanistan and canada's international defence college ) as well as a military college .
it is also a large seniors' retirement city - seniors from larger cities have moved here because of lower house prices .
there is really no heavy industry left . we did have a large dupont nylon factory , an ALCAN aluminium plant and a terylene plant . they've all been sold , shrunk considerable and what's left is "automated" . we had our big shakeout already in the 70's and 80's . the employment now left is pretty stable .

it's a completely different picture in places like windsor and oshawa - where the (former) big 3 had many assembly facilities .
in november 2008 unemployment in windsor stood at 10.1 % already and it's climbing . many laid-off autoworkers have packed it in and moved to other cities - hoping to find work there , others have moved in with parents on pension and family members that still have a job .

northern ontario (sudbury district) and northern alberta have also had large scale lay-offs : the demand for lumber , copper , nickel , oil has gone done and companies have scaled back operations . hardly any new exploration for oil and minerals is still going ahead . the hope is that at a certain point the pent up demend will drive prices for raw material up again and that there will be a big scramble to get operations back on line again . judging by previous downturns , the demand will increase again , and prices will take a jump - it's happened before during the 80's and the 90's when companies were competing with each other for workers - and the wages and salaries were quite juicy - it's always been BOOM AND BUST in those industries .

many thousands of workers left newfoundland when the fisheries industry collapsed in the 80's and moved - ususally without their families - to work in the northern alberta oilfields - many have now moved back to newfoundland (where the unemployment is 25 % ) .

when we look across the border to northern NY state , it is not a pretty picture either . watertown is the city closest to us - lesss than an hour's drive incl border-crossing (the entry is usually very easy : shoppers are always welcome by CIS ! "have a good day and enjoy your shopping! " , is the usual greeting ) .
many canadians took advantage of "bargains' in U.S. stores . a new shopping mall was built to attract more shoppers . FORT DRUM military base is also nearby . there seems little local industry . for a while the shopping centre was being kept quite busy , but for about the last 18 months traffic has dropped off considerably and many stores in the large mall are closed .

so a lot depends on WHERE YOU LIVE . some communities are doing relatively well but others are really feeling the pinch .

we've lived in canada (and the same city) for over 50 years and these "bumps" have occured about every 10 to 12 years - some more severe than others - some of short duration but some lasting as long as five years .
having worked for the same (medium sized) life insurance company for about 30 years , we've never felt much of those "bumps" personally . the company was owned by a single family (they hold 90 % of the shares) and there was never a push for "growth-for-growth's-sake" . what was important to the owners' was the highest rating from j m best rating services , rock solid business and a moderate profit .
working for such a company certainly served us well . i could have made more money working for one of the large insurance companies and probably had a bigger house and a fancier car . i doubt i could have had a more enjoyable working life and (early) retirement .

so the cycle repeats : things go up-UP- UP and things come down , DOWN , DOWN .
we can probably agre that things are going down right now ... and at a certain point they'll go up again ... but it may take five years ... who knows .
hbg

The sad picture you provide is repeated in the USA. Moreover, I see no improvement in the future. It will be pretty much every man for himself. There is little doubt that the 21st century will be the asian century. The young would do well to learn Chinese.

advocate wrote :



a recent TV news program showed that in california some high-schools feature "chinese" as one of their subjects .

when i grew up in germany english lessons started in public school - grade four (at least in northern germany) . it continued even throughout the war years .

in the "business" high-school program in germany it was english plus another foreign language - i elected spanish because many merchants had strong business ties to south-america .

the english served me well - never had much need to use spanish .
hbg

We live in an area where some cities have a majority of Asians such as Cupertino at 40%. There are many Asian stores and restaurants in our area; some are 100% Asian shopping malls. There has always been language schools in our area that teaches Chinese, Japanese and Korean. We see more Asian politicians running for office, and our city even has an Asian mayor.

It's true that Asia has much more potential than the already developed countries, because most are starting from a low labor cost base. However, in their growth, they will seek developed countries who produce machinery and technology, and expertise in ecology. Pollution is a very big problem in China and India. They do not have the wherewithal to start building machinery factory from the outset, but must grow their economy slowly.

That's the reason education in the US is very important; that's about the only way we'll have a head-start against China and India for them to grow. Most in their country are still peasant class and live in poverty. Most of us get mixed messages from seeing all the skyscrapers and building going on in the big cities such as Beijing and Shanghai, but most Chinese still live in small villages and farms. Most of their energy comes from coal that increases their pollution. Their rivers are already one-third polluted, and many villages must have fresh water trucked in. They have a long ways to go before they are really competitive in the world marketplace. That's not to say they don't have the potential.

Here is an interesting discussion of the so-called Asian Century.

http://en.wikipedia.org/wiki/Asian_Century