Goobieman

Are we?
Or a recession? Possibly severe?
Or...?

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Cephus

Hopefully we're headed into a severe recession. I say hopefully because it's about damn time the American people (and the government) learn to live within their means and not be strung out on credit they have no business having. That's what got us into this disaster, banks giving away free and easy credit to people who have no business having it and little hope of ever paying it back, giving mortgages for homes they couldn't hope to afford, cars nobody can pay for, the American dream has been financed on plastic and the government has been playing along because it makes the economy look healthy and they can toot their own horns.

That kind of spending can only go on so long before the whole house of cards collapses and people have to realize that they can't spend with wild abandon with money they simply don't have.

We need a readjustment where the only people who can get a lot of credit are people who are good credit risks, people who have the ability and the history of paying on time. We need to go back to the time when your credit report mattered and fly-by-night credit and mortgage companies didn't send you a dozen credit card offers every day because they were going out of business, selling their assets to the big companies who could swallow the losses and they could sit on the beach in Fiji with their ill-gotten millions.

It's going to be painful for a while, but it's pain that the American consumer, by and large, has earned and deserves.

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rsixing

Yeah...depression but I'm on some anti-depressants now so thanks for asking.

UtahBill

agree totally....I watched my parents squander what little extra they had instead of planning for the future, and it made me paranoid. I made sure I married a woman who thinks like me, fiscally conservative. Our parents didn't have any wealth to share with us, so it was clear that we were on our own.
We have done well, and our adult children are doing well, but I can see that it will become more difficult for future generations to do well without the kind of changes you suggest.
Advertisers convince us we NEED things that we don't, and bankers make easy credit available, and there is no person, group, agency telling us that Madison avenue and Wall St. are NOT our friends. There used to be a stigma attached to spending what you don't have, but like pregnancy out of wedlock, we have lowered our standards and now anything goes as long as you have a good credit rating.
I doubt we will have a depression, certainly not like the last one. Government welfare will feed the hungry, house homeless families, but we will likely see more homeless men living on the streets or out of their cars.
We, the people, will have to retreat to earlier times when you didn't borrow money for extras and credit card debt regains the stigma of stupidity.
But there will be a recession at the least, and then things will be better, until greedy Wall Street types figure out a new way to steal from us. Using the public trust of financial institutions instead of weapons seems to be the way to do it withoug going to prison, certainly that has to change....

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Summerwind

This is one of my pet peeves. My kids used to get so po'd at me because while we were watching tv I would constantly comment on the bs the commercials were pushing. I'd be talking through the entire commercial breaks, ". . .'none better' well, that means there may also be none worse" and "geez, yeah, I really want to have 17 side effects to get rid of one inconvenience". . . "only an idiot would believe that (product x) is any better than our old but trusty (product y)". My kids hated it at the time, but now they are noticing that they are not in debt because they don't buy crap, while all their friends (my kids are aged 19 & 23 with friends ranging from 18-30) are already at least 10K in debt. My daughter got her degree without one loan and no parental help, my son is in his third year and no loans yet. (ps both kids graduated at 16 so that's how my son's in his third year and my daughter got her degree when she had just turned 21)

Anyway, I think more parents and maybe even schools need to teach "marketing resistance" classes.

Infinite Chaos

Up till last week I thought it was merely a recession and possibly a deep one. With the failure to get Bush's bill passed I think "depression" is more likely.

If his economic advisors wanted $700 billion a week ago I think it will take a heck of a lot more than that now to recover - simply because when $700 billion gets spent the markets and banks will want more.

In the UK this month last year 95,000 houses were sold. Same time this year and 1,500 houses were sold across the country. It isn't just the banks and golden parachutes anymore. Real people and real jobs and livess are going to be affected for a while to come.

Tucker Case

Who cares? We're all gonna die anyway...

Cephus

The problem isn't the bill not getting passed, it's the fact that all these banks are sitting there with baited breath, just waiting for all the free money to roll in. They're purposely not giving loans because they know the longer they hold out, the more likely it is that they're going to get billions in free taxpayer money. This is like McDonalds refusing to sell food and expecting to get paid for doing so. So long as a bailout package is on the table, these businesses, whose only job is to issue loans, are going to sit there and stare at it and do whatever it takes to get their hands on the money.

While fighting any form of regulation or oversight. Are we surprised?

That just says that there were a lot more homes sold that had no business being sold last year than this year. The housing crisis was caused by people being given loans that had no business getting them in the first place. Cheap and easy credit with few restrictions and companies not only not paying attention to credit worthiness, but actively telling people to lie about their income so they could get bigger houses and bigger loans, caused this disaster. The mortgage companies didn't care because they knew by the time the loans came due, they'd be on a beach in Fiji sipping martinis and other companies would hold all this bad paper.

Goobieman

Please, cite something that indicates banks are getting free money under the bailout plan.

UtahBill

an old, out of print, book that I read a long time ago helped me see thru the crap. Hidden Persuaders, sold by consumers reports, IIRC....
My kids have no student loans as well, and they have thanked us for it. We paid what their scholarships did not....