A lot of commentators, including your truly, took issue with the NBER announcement that it had deemed the US economy to have exited a recession as of June 2009. I thought it might be useful to get a more nuanced reading of conditions on the ground from readers.
So please weigh in: do you see a recession, a recovery, or a depression in your economy? And be specific as to what your economy consists of, and whether you have multiple vantages (ie, you might have one set of reading based on conditions where you live, and a different sense based on developments in your industry or the job market).
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Personal recession: my wife who provides about two-thirds of our income as an administrator of the largest collection of publicly funded adult schools in the country is slated for 29 furlough days in the fiscal year that began July 1. That’s a 15% pay cut.
Spain: depression. 20% unemployment. Everyone (and I mean everyone, including high-income people) is fearful of getting fired and being unable to find employment. Among the young, 40% unemployment.
Funnily enough, the ones leading the best lives in this depression are those working for banks. After we’ve bailed them out (through low interest rates, state guarantes on mortgages, etc.), we still have the densest commercial banking sector in Europe. Anywhere in Spain, after every 10 steps, you can find a commercial bank.
As in the US, this great recession is wide-based. Surprisingly, my industry (software) has been even more affected than the construction sector, according to official stats. Investment has all but faden away.
I’ve heard some export industries are doing fine, which does little to dispell fear from their workers.
I did not lose my job and I rent. No recession for me. The 401(k) took a bit of a hit, but has mostly recovered (thanks to the bank bailouts?) Heck – I even changed jobs and got a 10% bump in salary earlier this year. Renting kept me mobile.
So yes, I made sacrifices during the boom that ultimately kept me safe from the recession. I wish I could say I was smart, but probably I was just lucky.
Ditto
More or less the same here. Retirement plan is mostly okay, relocated for a pay increase to an area with a comparable cost of living. I also rent. I’m going to hold off on plunging into the real estate market. I think I’m more fortunate than anything. Knocking on wood that I stay on the fortunate side of things.
We rent, too, and I cannot tell you how grateful I am. Among my close friends, one lost his home in foreclosure, another somehow got a loan modification, others received massive amounts of help from their parents to barely miss the same fate. I work in real estate law (assitant, not lawyer), and the few real estate contracts we get these days all show prices falling lower and lower. Our rent did not even go up this year.
Meanwhile, my husband and I both have steady jobs, so we’re lucky there, too. We’re able to help out an unemployed friend with gas money on occassion. We both even got raises this year (combined we make about $65K gross, enough).
The recession will be over for me when I don’t know anyone who has been looking for a job for over a year, or on the brink of foreclosure, or stuck in a horrible job because where else is there to go? and at least it’s something.
We’re young, and retirement is decades off – but I can tell you I have become more risk-averse and debt-phobic. We have to adjust our expectations. Play defense.
To answer your question, we’re in a depression, will be for a good long while. The NBER is ludicrous.
Great appearance on Max’s show, Yves. You’re at your best when you’re candid.
Ditto, Cheyenne, and most articulately stated.
Now, the American people say the NBER is over!
And who the frigg are those NBER people! And what has been their track record? Especially individually?
From poor, to piss poor!
We have Jessica Matthews, also on the American Friends of Bilderberg, Inc.
We have a bunch of others who are with the Peterson Institute. And others with the Bretton Woods Committee. And some others with the Group of Thirty.
And what is the significance of these aforementioned groups?
They represent the ultra-rich; the Transnational Capitalist Class who are vehemently anti-worker, anti-small business, anti-union, anti-free enterprise.
But they are pro-neofeudalism, pro-serfdom for the rest of us.
The NBER is definitely over.
[Recent polls indicate the vast majority of Americans don’t give a rat’s ass about polls.]
I have a real bird’s eye view of the US, UK and Belgium from the perspective of international architecture firms. We are the leading edge, the shock troops, living high during the boom, creating amazing (and sometimes insane) buildings all over the globe. But when the bust hits it slaps us in the face extra hard. My friends in large US firms reported at least 50% staff reductions starting in the last quarter of 2008 and running all the through mid 2009. My MSN Messenger was flashing for months with reports of lay-offs (and all the gory details of the mechanics of laying huge numbers of people off) from several US and UK cities. Once I friend was seated where he had a good view into the conference chamber were a number of executions were taking place. He was busy giving me a run down with lots of gallows humour about the process when all of sudden he saw his fiancé being led into the room! The jokes ended right then.
Most of the lay-offs were more junior staff. Firms are now seriously top-heavy because the directors obviously tend to keep the senior people they know well. Any obviously any senior level slackers the directors didn’t like were shown the door with a quickness. Several firms instituted across the board 10% pay cuts and I have yet to hear about any being rescinded.
I have not heard of much rehiring since. The only real action nowadays for the big firms is in China and Saudi Arabia. China just keeps on building and there are huge projects on the drawing boards. The Saudis are already overbuilt (finished buildings are staying unoccupied) but they too have huge projects coming on line. They seem to be trying to make up for the demise of Dubai and at the same time profit from the lower recession prices. But I can’t see these two markets lasting much more than two years though. There were hopes for Latin America but those fizzled. Even Libya was looking good for (for French and British) firms until a few months ago. London had a wave of slight (forced?) optimism about six months ago but recently reports from there are quite gloomy concerning big projects.
Architects in Belgium on the other hand have only recently began to suffer. The big firms here until very recently didn’t lay off but only lost people through natural attrition (typically EU nationals who wanted a couple years experience here and then moved back to their countries). I’ve heard of lay-offs in the 5% range recently but nothing like what happened in the US /UK. Then again there are loads of international organizations here in Brussels who are generally outside the business cycle, and who may even be encouraged to build now since contractor bids are in general tracking about 20% below normal prices.
As for may local acquaintances here, who tend to be middle to upper middle class, amazingly enough I see next to no sign of strain. In fact several families I know took big trips this summer to the American National Parks. Another couple recently left on a year-long around the world trip with their four children (all under 10 years old). This may be a bad sample as many are working for international institutions or companies. There was no housing bubble here, the people save like crazy, credit card debt is rare to non-existent, and in general the amplitude of booms and busts here is much lower than in the US.
My working class mates back in California are generally out of work or close to it. Most get by because their wives have good jobs in either health care or education. Some guys grumble about it being a “mancession”. On the East Coast my working class friends are generally staying busy cutting grass (with big tractors) in the summer and ploughing snow in the winter.
As for me, I just locked in a deal to work half-time for the next several years (more project related than anything caused by the recession) which suits me very well. We live relatively modestly and it gives me more time with the kids.
Come on, we all know you don’t live modestly. You’re a gourmet, you gorge yourself on expensive organic venison meat.
j/k, of course.
I’m curious, are you interested in the aesthetic aspect of architecture? Do you check who wins the Pritzker price? Does an architect need to take engineering courses such as mechanics, materials, structures,…?
What aspects of architecture are you most interested in?
Sure I like to go out and get some good raw materials to cook from time to time (game season starts Oct. 15th !) but I know where to shop and I balance those big events with simple meals like gnocchi di papate; spaghetti aglio e olio; or some sort of lentil, rice, and whatever-else-is-in-the-fridge concoctions.
As for architecture I’m pretty much a generalist. I specialize in foreign projects (from my firm’s point of view at least) so my role tends to adjust to the circumstances, although one common area I’m almost always involved in is design and detailing of facades. The last couple years my role has become close to that of a diplomat as we have had a very large, contentious, multi-cultural team and client located all over the globe. In this environment I am the person who best understands each side’s culture and limits (and time zones) so I have to broker the compromises.
I don’t check usually check the Pritzker prize but since you mentioned it I went and looked. Honestly I have lost some interest in that side of architecture. Normally I know someone who has worked in those offices (not this year’s winner though) and so I get to hear the real stories about what fascists these people are (and they almost always are). Yesterday I walked right past an architectural book store without going in. Ten years ago I would have made a special trip across town to go there and then spent an hour or two browsing the shelves. I’m far more interested now in international relations, civilizations, history, military strategy, etc. If I buy a book nowadays it is often something DownSouth or other commentators mention or from an author Yves links to (Michael Hudson’s “Super Imperialism” will soon be mine!).
We take very general courses on structures and mechanical systems. We obviously have real engineers to do the calculations and drawings for those areas but we have to understand the concepts and systems, to speak the lingo, and to understand where the engineers redlines might be in order to try to convince those guys to do things more the way we want to do them. Especially on the mechanical side since sustainability is so important nowadays.
So I would say I’m most interested in designing the building correctly from the get-go (I love the initial stage of setting up the correct modules and grid, laying out everything correctly, etc), facades, security (very important nowadays too), sustainability, and especially the social aspects of working with and coordinating large complex teams and clients.
BTW, I just want to mention that this is a really fascinating thread.
Yeah, it’s funny how our interests evolve with age. I remember that 10 years ago I would surf the net almost exclusively to find information on movies and music. Now I spend my time almost exclusively on blogs about politics/economy.
Most political books I read are also from NC recommendations. The last one I read was Chalmers Johnson’s “Blowback”. I had no idea who he was until he was in the links. I have to say this book changed my worldview quite a bit. I had always thought of the Japanese and South-Koreans as staunchly pro-American. I’m not so sure now. The massive size of the military industrial complex as described by Johnson also astounded me. I had always thought it was the financiers who would ruin us. Now I think they have strong competition from the military industrial guys. I wonder what the relations are between those 2 elites. Do they know each other? Do they interact at all?
I also love this thread. I wish it could be bumped.
On the surface our life is good. I work for state government making about $65,000 per, belong to a decent union, and have (at least for now), a pension and health care.
But my husband, who has worked on and off as a subcontracted technical consultant/writer/helpdesker at a major Pharma company for the last 14 years, is once again facing the end of a contract in October, with no new prospects, and is totally dependent on my job for his health insurance. Although we saw the crash coming and rescued his IRA/401(k) from the stock market just in time, our life savings is currently bringing in .5% interest. Since he just turned 55, we have some concerns abouthis age impacting on future work potential.
Our 30-year old daughter, who managed to finally find a job with a grocery chain after 2 years of on and off unemployment, has recently moved back in with us (with a dog and 2 cats) because she can no longer live on $10.75 an hour with or without a roommate. She had to work for 9 months before becoming eligible for the company’s HSA-style health insurance, and immediately used up the $250 the company allowed her to have her ongoing endometriosis attended. She also has had serious psoriasis for 15+ years, which has made it impossible to insure her before now.
I feel the weight of caring for my family in ways I never did before, because I know that should anything happen to me (age 57) the whole house of cards could collapse into poverty once our savings is gone. Is there a recession in my house? Frankly, I can’t see an end to it.
All seems to be going pretty good in Australia. There are pockets of a bit of recession. As long as China wants the resources, Russia is stopping export of wheat and immigration levels remain high here – all seems to be good.
I might add I just moved back after living in Florida for the last 7 years. Glad I did. Florida is still in a depression. Housing is not moving and there are a lot of houses that will have to be demolished – due to mould. And their wages are just pitiful. Unemployment is about 15-18% in SW Florida (5% in Australia). Cost of living is about the same. Somethings even cheaper here – but wages are a lot higher!
The housing bubble hasn’t burst yet in Australia – and the Aussie dollar is getting higher. And it looks as though interest rates are going higher here.
All in all … young country, tied to Asia, better standard of living and the big one – National Health!!
Hi Anne, nice to hear from Oz. Can you clear up something for me? I heard that the average house price in Sydney was 8x median income. Could you clarify?
Cheers.
Graveltongue,
Sydney resi r/e is 9.5X median wage
Not just Sydney.
Prices are insane all across the main Australian cities, which due to our intense level of (sub)urbanisation basically means the entire country.
the rust belt has been in decline since the 50s, and that hasnt changed…half the storefronts in the suburbs are boarded up, a few with “for lease” signs…all counties across NE Ohio had been losing population as people moved to areas where the economy was better, now many are underwater & stuck…
Let’s see. (Caveat: I’m not an economist, but I do thoroughly enjoy this blog.)
I completed a Master’s Degree in May 2008. Following that, I was unemployed for 23 months, and finally landed a temporary job well outside of my field in April 2010.
Since then, my personal economy has gotten slightly better: I no longer have to struggle to come up with rent every month, but I also can’t afford to save any money or get sick or injured due to laughable temporary “healthcare” coverage.
In 2 to 3 weeks, I’ll be moving into full-time status in the position that lies well outside my field, and should see a significant increase in monthly earnings. But I’m also getting ready to move into an even cheaper apartment-hopefully closer to work-and I’m looking for ways to cut down on my food and entertainment costs, and generally trying to make things last.
So is the recession over? I don’t know. For me, I guess it is nearing its end, for a time, but I doubt we’ll see 2005 levels for many years. And given the census report, monthly job numbers, and other data, I suspect we’re mired in a recession, and I think we should all be preparing ourselves for a massive disruption and crash.
People who live around me seem to be carrying on as if nothing happened. They’re still piling on debt, throwing out things they could be fixing or saving, and generally acting as if the good times will never end. But I do live in Dallas, so that might have something to do with it.
Just wait a few more weeks for markets to crash. It’ll reveal the jackasses that they are.
Ohio has been impacted by the recession a bit more because of its former manufacturing base with unemployment [10%+] a bit higher than the national average. The more urban counties appear to have been hit harder than the rural ones even though the numbers in the latter have always been suspect, underestimating unemployment there. It’s difficult to gauge the size of “underground economy” in either even though it must be significant because people appear to be scraping by with no visible means of support. Begging for food and/or money with signs on heavily travelled streets is common – the new normal!
Especially hard hit have been the public services in local and state governments. Layoffs [40 police officers in Akron pending], furloughs, reduced benefits and working hours, consolidation of municipal bodies with county ones elswhere have excerbated unemployment in the private sector. My youngest sister, a registered dietitian, is slated for about a 18% pay cut as her employment with the city will be terminated and then rehired by the county. [All this union busting and austerity meted out by “Democrats” who control the administrations in both!]
And the management consultants are still circling … with additional downsizing said to be imminent where I work and elsewhere.
Kasich [Gubernatorial] and Portman [Senate] will have to be found naked in bed together – they already are – to lose their respective elections. Even then… Most Democrats don’t have a chance… Ineptitude in Washington [White House and Congress], corruption at county and local government levels long controlled by Democrats have created the perfect storm. For too long the Democrats have paraded themselves as the champions of the “little people” while doing nothing really different to distinguish themselves from pro-business, less government Republicans. Even the latter seem to understand that JOBS are the issue and have “appropriated” this issue from their opponents. While their solutions are a rerun of past bromides/promises the Democrats have nothing better to offer.
That may be the real import of this recession. It’s over all right – for Democrats!
NBER says that personal income is going higher, but if you look at the Social Security revenues they are down about 5% or so year over year. Any growth in personal income is coming from unemployment benefits or non-private sector employment. Also, to my shock and horror, they are beginning to build new houses again where I live even though there are still huge numbers of brand new homes that have been sitting unsold for the past 2 or 3 years. The last thing we need is more houses that nobody wants to buy. There is probably some uptick in economic activity going on out there, but it seems to be of dubious quality.
When folks are trapped in homes they can’t sell to take a job they want elsewhere the country has not “recovered”.
I live in NC. My daughter with her masters is in her 4th year of teaching and still making second year money despite a contract.
My son has graduated with honors in construction management. Luckily we started an odd jobs business with him a few years ago that is doing OK in this economy so he can get by. We are also getting into energy efficiency and analysis to save folks money and that is starting to pay off.
My business has been off by 50% for two years now. My wife is a pharmacist so we do OK. We support her family in Cuba who would starve otherwise.
We have always lived within our means.
We are living a new normal. I know enough economics and stay current enough to know the stock market is a con. That no one is focused on growth and that is the only way out of this. Our elites sold our economy to the chinese and oil barons to make themselves rich and our middle class poor. We are probably a decade away minimum from 5-7% unemployment.
And the sad thing is both parties are lying and people gobble it up like apple pie. We need truth tellers in the worse way.
A tale of one and a half economies.
I live in Upstate NY. Our economy has sucked for so long that almost everything is an improvement. However, that has meant that our local economy went through the process of adjusting to the “New Normal” over the past two decades and did not participate in the national housing bubble. This has meant that we just had a routine recession here with house prices and volumes largely unchanged from 2-3 years ago and peak unemployment about 7.6%. The recovery here is looking like a normal recovery as jobs are starting to come back. I think that there is a good chance we will be back to where we were in 2006 in a couple of years. Please keep in mind that you can buy an entire decent house here for the price of a good down-payment in many major urban centers.
The company that I work for is still seeing weak demand from private clients on a national basis although our local office is doing well and has been actively hiring over the past 2 years (we have a major local project that is kicking into gear).
The company overall is very well diversified locally and internationally and between various private and public clients in all those locales, so the overall company is doing ok.
All in all, the economies that did not participate in the housing and financial sector bubble are doing ok. The portions of the company that work for entities that have been impacted heavily by the national recession are still sucking wind.
To answer the question we have to ask is it the Real Economy or the Financial Economy in Reference. We have insidiously grown into an artificial economy which only works under certain conditions like a car. If you operate your Mercedes in Somalia unprotected, it will be stolen.
That is what I mean by artificial economy – you cannot operate it safely when the world around you are poor, unemployed and starving even if it is workable. So to answer the question: we are in Stagflation for many years to come – generally speaking. Don’t watch the TV, live your clam-shell lifestyle and check if your net worth is increasing or decreasing on a quarterly basis.
This will be most challenging especially for those between 20 to 40 years. A change in values may be necessary.
Sure, this is easy to make fun of, but it is just a definition issue. To economists, the recession is defined as having ended because GDP stopped declining. Another way of looking at it is that we are at rock bottom. To normal people, the recession has ended when their 401k is back to where it was before the recession, unemployment is back to normal and banks are not foreclosing on our friends.
Here in the Washington D.C./metro area, if you don’t look below the surface it might not feel like a recession/depression. It’s a big fantasy world here. Almost everyone I know here works for the government or a government contractor. I’m lucky to be working for the government so I’m not worried about losing my job. However, I know that if things keep going the way they are going I’ll probably never be able to leave for the private sector though I would like to do so. Hard to voluntarily leave a job that pays well and where you can’t be fired in this environment.
I am a dermatologist specializing in BOTOX®, fillers and lasers. My waiting list is a bit shorter, but my gross dollar volume per day is up somewhat.
Quite a few patients do not seem to have been affected by the recession, and travel a lot; and a steady trickle of them report purchasing properties in the southern US. Other patients are are more restrained in their spending, but this has always been the case.
But what about the patients I have not seen for a few years? What has become of them?
I work for NC state government, and have had zero pay increases in the last 3 years. Our work load has plummeted from lack of highway construction money; I used to let 4-10 projects a year; in 2010 I will let 2. My wife works part time for a small private engineering firm that is struggling to find work; they have some city engineering contracts but there’s little to no private development taking place in central/eastern NC. Projects created by the stimulus money are finishing up and there’s been no “kickstarting” of the economy from that money.
One of my neighbors works doing custom electrical work for big homes; he says work is slow. Another one is a private surveyor; he too says work is slow, but steady. There are several abandoned homes in my middle income neighborhood, and another neighbor has been out of work for over six months. Everyone seems to be digging in and waiting for the worst to hit; no one thinks things are going to get better soon.
My wife and I have funds set aside and have paid off all our debt but the mortgage, so we’re ok if she gets laid off. Fortunately my health insurance is covering my prostate cancer surgery, and I’ve got sufficient sick leave as well.
Here in Ontario the recession has been moderate at worst. The recession in the US is closer to what we in Canada experienced in the late 80’s early 90’s that put us on a more fiscally responsible path (until the conservatives regained control of the purse strings that is).
The smallish town where I live is still booming (thank you RIM), but folks are all stretched financially (although as 5 year fixed rate mortgages have gradually reset at low rates it has been a silent stimulus to the Canadian economy), although the lifestyles are all kept up. You just know there is no way that there is the capacity to take on much more debt – so the growth will come from where?
lansing michigan. i am a CPA at a small firm.
all small businesses. sales over the summer down 10-20% in restaurants. retail clothing was down 28% in august; which i talked to their vendors who reported to me the same thing across the board. lansing experienced a smaller version of detroit’s white flight. all the surrounding “suburbs” of lansing are very nice and appear to be growing. but most of their growth is from businesses leaving lansing and moving to these surrounding areas and leaving lansing an abandoned foreclosed trash can.
we had some stimulus that rebuilt some road projects over the last two years (mostly projects outside of inner city lansing). in 1980, we had 30,000 GM workers; now lansing has 3,000 which another 3,000 work just outside lansing as GM was given millions in tax breaks. Oh and the factory, instead of replacing 100 year old buildings, was built on a fresh piece of farmland.
Hello from Ballard, Seattle.
I’m a school teacher, my wife works for 1 of the big box junk sellers.
We’ve been watching housing prices drop for 2 years – they seem to have broken through another new low in the last few weeks. The bar where I watch Red Sox & Yankees games has too many of the regulars buying cheap beer for home t.v. instead of out raising hell & spending money – BUT, more people are drinking!
Washington has laid off thousands of teachers and state & local gov’t workers, and, unless you’re a 25 year old with a comp sci / math masters, the job market is dead – in my not humble opinion.
rmm
I got a new job with good bennies a few months ago, so my personal economy has stabilized significantly. Locally, things seem mixed: when we are out, there is activity at stores, restaurants, etc., but it still seems a bit slower than normal. Where I work, business is better than last year, but not great, and it’s publishing, which has been in recession for at least 30 years.
My business has been in recovery from late summer 2009 to the end of 2009, than had a few month lull, and been running gangbusters since the spring earlier this year. We started back up our 2nd assembly line shift that we’d shut down in late 2008 a couple months ago to meet demand, albeit most demand coming from one other large economy somewhere else in the world. Industrial and automotive equipment manufacturing.
Three groups in my acquaintance seem to be coming out of this nearly whole: state and federal workers (in SOME states, clearly not all), retirees, and the investor class. Groups two and three overlap quite a bit, naturally.
Those outside major cities are faring better than those in the big metros.
A friend who works for NY State has received steady raises and her hubbie retired in his late 50s with a sweet buyout and pension. Few foreclosures, it seems, in Albany. DC, sad to say, remains a boomtown full of people who do not understand the pain everyone else is enduring. No justice there.
Generationally, the breakdown is weird. People in their 20s are depressed and in limbo. Working part time, bogged down with debt, not sure where to go or what to do. Thirty-somethings are clear winners in this economy: renting or in starter homes (whose values are recovering), too far down the ladder to have been sacked. Forty-somethings are in a tailspin. We bought our “move-up/forever” houses just before or during the bubble; we lost jobs because we made too much to be ignored but not enough to ride out the storm. Many fifty-somethings in the same boat, but more of them got burned by HELOCs taken out to renovate their homes or send kids to college. Sixty and up, well these folks lost a lot at first in the market crash, but have since recouped a fair amount. If they kept their debt burden low in the boom years, they seem mostly fine. But they are worried about the future and giving much less to their children. Estate lawyers will have a field day in a few years time.
Things are pretty good up here in my little mountain hamlet(I Galted out a few months back). We’re a relatively inexpensive vacation destination most favored by Kansans, Nebraskans, Texans, Coloradans, etc. All these states are doing relatively well, and widespread economic strife actually helps, because we’re the low-cost alternative.
For my day job, I’m a researcher. We’ve had a lot of independent success, and landed some of the pork flying out of Washington, much to my chagrin. Things are going quite well for us.
Would you care to share the name of your little mountain hamlet with a potential Galter-to-be?
Been unemployed/underemployed since Feb ’09. At 65, I draw social secy and have VA health coverage. This depression not only isn’t over, it is getting worse as people drop off the unemployment rolls. Here in S.E. Michigan, there are too few jobs and too many looking.
Checking in from Hong Kong where the Chinese stimulus plan shows only anecdotal signs of waning. Local property prices are at higher levels than pre-crisis (and above 1997 pre Asian Financial Crisis levels). Local business confidence continues to run very high and talk of “de-coupling” has reappeared in the vernacular.
Conversely, from my flat I can see containerships coming and going all day long. They continue to sail by half loaded and the parking lot further out in the water remains full of idle vessels. This is the same image from Q408. It is difficult for me to see China escaping from its recent profligacy without a major credit crisis of its own.
In CT…most of my friends have jobs and are doing well relative to the broader economy. I think in the late 20s-early 30s range in finance a lot of people are relatively safe. They are usually senior associate to vps so are not as expensive as a principal or md but have the skill set to do real work beyond the analyst and first year associates so they can get grinded hard but at least have jobs. One of my buddies that was at Evercore was let go in June but has had a fair amount of interviews, almost every week but nothing has hit + he’s turned down stuff he was not interested in. In addition, most of my peers either are single or married w/no kids or very young kids but because this has all happened during the financial crisis, they didn’t try to “lever” up their lifestyle.
The really crazy thing is that I have seen the most amount of recklessness w/the more senior types that rode the wave since the 80s. These are the folks w/kids at Philips, nanny, monster home in greenwich/new canaan, house in nantucket. Way too many fixed costs and while they are still ubber rich the level of scaling back has been pretty…well funny almost. So if you drive through Greenwich, you can find 10,000 sq ft homes mothballed…seriously.
I get the sense that things will slow down on wall street w/another wave of layoffs. Just had lunch with a friend at a $500MM hedge fund and he was saying it is dead, my other friends on the hf side of things have said things were dead through the summer and are still dead. So it’s dead on the trading side of things and then I just don’t see a lot of banking activity. Wall St has been beefing up corp fi/m&a but think about it ,that 3Par deal for example, that transaction value is relatively small. So these tech deal teams will be on the door of the whole space but the total transaction value of all these potential deals is peanuts meaning the bankers won’t need these massive deal teams and/or the pay will be bad and/or more layoffs.
The view from a graduate student in NYC: acceleration of an already tenuous situation… The academic job market was in bad shape before this crisis hit – with more and more tenured teaching jobs transfered into low paid adjunct work (much of which is done by graduate students hoping to get tenured jobs one day). Those students unfortunate to be finishing now and looking for work are finding a barely existent job market – public schools are gasping for breath, and the few scraps of unemployment that do pass down the line are attacked by unimagineable hordes of aspiring academics. The most pathetic part of it all is when your usually critical friends mutter things like ‘i’m sure things will pick up soon, they’ve got to hire again eventually…’ I’m not so optimistic — in higher education this does not feel like a momentary dip – it feels more like an opportune moment to proceed with the already in place dismantling efforts.
Great question. Here in Dayton Ohio the recession really started in the late 90’s. Something odd and never before seen was going on with housing, lots of abandoned houses. This accelerated over time as manufacturing started to go away and then for a decade we lost an average of 2500 GM jobs per year. I have never seen the numbers on the loss at the local supplier level but at one time there were well over 200 good machine shops and by 03 there were tall weeds in the parking lots. Then NCR left. Last week 3,000 people applied for 42 police trainee positions.
Oddly the employment scene is dominated by our large number of educational institutions employing rent a faculty at about 500 bucks per credit taught, and every kind of hospital and medical testing center you can think of. In between it is cell phone stores, rent a furniture, lawn mowing businesses, and positions that I call e-clerking.Restaurants have been dumbing down their menus and going out of business for the last two years, and that was voted the most popular leisure activity for ten years in a row, I believe.
This immediate area is Democrat leaning, in a state that is not purple but pink. People here will vote knee jerk no noew taxes ect ect because noone can see any raises so it is going to be beggar they neighbor. It will get worse. This said it is odd that the unized workers, especially the teachers, police, fire and public employees are the ONLY ones who have gotten consistent raises over these last many years. We are in a recovery that is selective in its application and it is clear that this is going to be a ten year process, althogh at long last the city and county are beginning to cope effectively.
In the very least, I feel like I’m living in a recession and I’m not ready to rule out a depression.
It seems like there is deflation in items that are not necessary, like antiques and designer shoes. When I go to the grocery store though-whew! It seems like we’re in a depression. I can’t believe the cost of necessities such as food and gasoline. Furthurmore my husband hasn’t had a raise for the past two years. His workplace put a freeze on all annual raises. The cost of our children’s school however continues to go up every year as it always has. I’ve been a stay at home mother for the past five years and have recently started looking for a part time position. I’m a registered nurse and I can’t find anyone willing to hire me since I took time to stay at home. Not even with a refresher course! A few years ago I would have been able to find someone willing to hire me and pay me while training me for their position, not anymore.
The area we live in has been hit hard by the housing downturn and interestingly this is causing a bubble in rents. Many people have been forced into rentals and *if* you can even get into a place the rents are high for the area. A few years ago a 3/2 condo would rent for about $850. We’re now paying $1300 and feel like we got a *deal*.
So, housing, food, gas, education, health insurance and so on are going up as salary is going down or staying stagnant. When we have to borrow $100 to get through the week (and we have NO debt-our only big ‘splurge’ spending is private school for our two children) I surely feel like we’re in a depression.
Actually, in 2007 I was talking with a friend. At the time I did not read Naked Capitalism nor did I know what was happening in Real Estate or anything really. I told my friend “I don’t know what’s happening in the world. It was easier to get by when I was a single parent in college full time with one child in private school. Now I have a husband with an advanced degree working full time. We live in a smaller home and budget everything and still, it’s virtually impossible to get by. Why are things getting so hard? What’s going on? I swear I feel like we’re heading into a depression.”
That was almost 4 years ago and I can’t believe how hard things have become. I can’t imagine where we’re heading.
So, in my world and the world of my family, we’re living in a depression. Let me be clear that the only thing we buy that we don’t HAVE to is school for the kids. We literally dumpster dive and get free things from Craigslist and such. We shop at Goodwill whenever we need anything. We keep the temp in the house set at 85 in the summer and 65 in the winter. We wash clothes after 9PM (cheaper on off hours) and don’t use the dryer. We mend things, we cook from scratch using cheap yet healthy food like dried lentils and beans/rice.
You get the picture. We’re healthy yet our health insurance-through my husbands University is over $1000 a month. We have good driving records yet our liability only car insurance is $230 a month. We live in the cheapest 3 bedroom we could find and pay $1300 a month. Our kids schools cost $1700 a month. My husband makes $4000 a month after taxes. So, before gas or food we’re in the hole $230 a month.
I can’t even afford to pay for classes I need in order to become marketable again as a nurse.
We see no light at the end of the tunnel right now in the current situation. Our *plan* much like those in the great depression who fled for California and what not-is for my husband to find an online position so that we can move somewhere with a lower cost of living. Right now, despite our fairly well developed critical thinking skills, we can find no other answer. If he is lucky enough to get an online position-we’ll leave the country if we can. If not, we’ll try to move somewhere that we can afford an acre of land or so and start to move ‘off-grid’ in an attempt to remove ourselves as much as we can from what is happening in our country. Love the land-hate the politics/policy’s and so on that seem to be hurting the middle class.
I swear I feel like middle class genocide is going on in America. There’s a lot of desperate, angry, oppressed and fed up people out here in the lower middle class.
We own a home in another state that we couldn’t sell so we’re renting it out. We pay thousands of dollars in property tax a year, most of which, go to pay for public school. The school zone we’re in has failing and in my opinion, dangerous schools. So, we pay AGAIN for private school.
My husband is an educator. A good one. Yet, we can barely manage to educate our own children. Now, something is wrong with that picture.
Something is VERY wrong when a person with an advanced degree, working full time (sometimes overtime) can’t afford to put food on the table.
Where is the incentive? In America, if a person works full time they should be able to meet BASIC needs. I’m not talking about my family because I realize we make some choices that others may not. I realize that we could be getting by if we out our kids in the failing school and bought them bullet proof vest to wear.
Others however, even with an undergraduate degree, can’t make ends meet for very basic needs. I truly feel like we must be in a depression when someone who is lucky enough to have a full time job, has no debt, only needs to pay for food, shelter, health care and transportation to/from work, can’t get by.
I can surely see why someone would opt to go on welfare. Why work 40+ hours a week, break your back and stress your heart out? Not be able to afford medical insurance. Make too much to qualify for any assistance and still not be able to meet basic needs. For the *pride* of not being on welfare? I don’t think so. I totally understand why some people I know have ‘given up’ and now live on welfare.
Honestly, not only do they not have to work, most of them have a MUCH higher standard of living than they did when they did work. Now, they have health care, live in a safer area, have plenty of food to eat, can afford to run their air conditioner in the summer and live a better lifestyle all around.
Now what’s wrong with that picture? When you work full time and can’t live as well as people on welfare?
I tell my kids fairy tales about the land of opportunity and how people came to America for freedom and opportunity.
The Lottery is looking more and more like an investment plan!
We.. thanks for your story. It brought a tear to my eye. I feel insulated from the worst of it for the time being because I had the extreme good fortune to be able to move to what is for me a lower-cost-of-living country (no property tax on primary residence; “socialist death panel” health care). Eventually, though, I think we are all going to have to be looking at alternatives.
Dear Lidia,
While I don’t enjoy making people cry, I do appreciate your empathy. Thanks for sharing-it makes me feel so much better to know that some people look for understanding and empathy-reasons to unite-rather than to judge and separate us from one another.
I truly hope that things continue to go well for you and that you continue to see the bright side and find joy in everyday moments.
You deserve a pat on the back and a big hug really-for finding empathy rather than judgement is unfortunately rare these days. I hope you will always hold onto that humanity inside yourself.
we
Whether expatriate or not, it’s hard to have to “refudiate” the values/myths we Americans grew up with: that our country is supposed to be the model for all others.. the shining city on the hill, and so forth. Our idols (capitalism, democracy) have feet of clay. No one prepared us for a change in fortune.. “Who could have predicted?…”
I find intellectual relief in reading books by Buddhists and Stoics and Druids.
My process of financial awakening started with “Your Money or Your Life”. this taught me to question the value of money, and to see the wisdom in retreating from the rat race to whatever extent possible. You have figured out the same thing: that with your educator husband you can’t count on education for your kids.
Where are you that the schools cost so much?
We, write to me, if you feel like it at ladelfina AT teletu.it.
I’m in mail order, I sell specialized books for a living (astrology). Not to toot horns, but astrologers saw the mess coming at least seven or eight years ago, though I don’t think we realized how hard it would hit us as individuals. About 40% of my biz is international, almost none of it local. Unlike a lot of US booksellers, I ship everywhere. I’m a pro.
My belief was that when the US economy tanked, other countries would avoid getting sucked in with us. If the dollar then collapsed in value (hah!) the result would be a surge in overseas orders. My worst fear was that wholesalers would go bust, which would strand stores like mine. So far, no.
But the dollar did not tank and the rest of the world got sucked in, too. This biz stopped being “sweet” about three years ago. Two years ago it became nail-biting – just barely making ends meet.
This past summer, the bottom fell out. We now gross about 40% of what we did four years ago. Not enough to cover expenses now matter how hard we try. Downright frightening.
Three years ago I started a monthly newsletter to see if I could scare up sales. Didn’t much work, but it did give me a reason to come home at night. Eighteen months ago I took it weekly. Still didn’t have much impact on sales, but, like a lot of bloggers, I developed a following.
So, a week ago I bit the bullet & said, HELP!!! Much to my astonishment, sales last week were triple what they were the week before, and there’s a lot of overhang for this week. I’m not so silly to think this will go on, but my experience suggests there is a lot of money out there, if we can only shake it loose.
DKS, a semi-famous friend of mine, called last night. She thanked me profusely for sending her a client a month ago. One client! She says everybody she knows is on food stamps. (She was staring at her quarterly tax returns.) Since you asked, the astrological forecast for the economy, going forward, is grim, out to at least 2020, though Steven, in Pagosa Springs, says it won’t get really bad again until next year sometime.
And that’s what it looks like for a mom & pop mail-order biz in NE Maryland.
I am in Sonoma County CA,which is AG,Tourism and FIRE. Those sectors catering to the wealthy are doing well,or reasonably well. The others are not. Recession/Depression for the lower/middle classes,Boom times for the wealthy.
The current indicators that the Fed and the rest of the ruling elite focus on are a complete sham.
Please take a look at the link below for better measures:
http://www.stiglitz-sen-fitoussi.fr/en/index.htm
A change in economic measures should be part and parcel of what needs to happen.
No. Central Italy.. I see very difficult times around here as what few jobs there are are part-time and contract work (rough on Italians who are far more used to job security than are Americans). My semi-retired, DBA/project manager husband had his client here—a provider of automation, security, and scanning systems—shut down with massive debt for items purchased on behalf of customers who then never paid… the shut down leaving other customers with projects in the lurch. He started working with some kids who have their own shop selling computer systems, web sites, programming services, networking and so forth, and they are lucky if they pay themselves $1000/month. Their biggest client (who pays in 180 days if at all) is the grandson of one of the biggest Italian banksters of them all, Cuccia. This bankster spawn owns a huge ‘tenuta’ with many villas, which he rents out for €6000/week. Yet he nickels and dimes the computer kids…
I came to live here 7 years ago, hoping to get out of the rat race (succeeded) and to live somewhere that was more connected to the seasons and to agriculture. But I see a great hollowing out all around me: the main money-“making” game aside from tourism is real estate, and virtually all the old “fattorias” (farms) have been turned into B&Bs or sold off as vacation homes. I was looking for some help with my medium-sized yard, and saw that one local garden designer advertised that one of his recent projects was “landscaping a helipad for use three times a year”.
There is untold land wealth that is being inexorably sequestered and taken out of use..
Old-style feudalism at least employed and fed farm workers and craftspeople; this new (neutron?) feudalism doesn’t. What sort of contribution to the local economy from someone who helicopters in 3x/year? A few days of cleaning services? A handful of restaurant meals? The souvenir shop couldn’t even stay in business, and shut down.
I’m warned about the local cheeses, which may or may not be made from local sheeps’ milk. In fact, there are precious few sheep to be seen these days: the sheep have been outsourced. At the local seasonal food fairs, for example the “sagra” (feast) of porcini mushrooms, the mushrooms come from Eastern Europe somewhere.
The nominally communist town planners keep approving lots for building, although the town has had the same population of 5,000 since the 1800s. I don’t know what percentage of housing units are uninhabited most of the year, but I would imagine the figure to be high. I know that in Cortona, not that far away, it became a real pressing issue as the whole town center was effectively deserted, making it fairly unappealing to tourists. The mayor at the time lamented this state of affairs, but there is nothing anyone can do about it. Meanwhile the realtors are expanding their web sites with ads in Russian and Chinese.
In an industrial zone, I see many recently-built shells and semi-finished warehouses/stores, and even pavement/parking signs put up, but I can’t imagine anyone is actually moving in. They’ve been empty since I arrived, but the parking signs are from this past year.
I would say 1/3 of the available retail/office space in my town is vacant. However, Italy as a whole has 1 s.f. of retail space per capita. The U.S. is number one in the world with something like 20 s.f./capita. The second-highest is Sweden, with 2 s.f./capita. Keep this in mind, as U.S. retail can contract to 10% of it existing size and still be first in the world on this score (those figures are a few years old, but you get the idea).
Back to the local area: you do seem some farmer-types.. but I never see anyone under 50 on a tractor or driving a truckload of hay. One part of the local economy that seems to be expanding is that of the olives, since I see new areas being planted. I looked into buying a small olive grove: I forget the size of the parcel now, but a few years back someone was selling for about €220,000 a piece of land planted in olive trees, whose oil sold for €1800/p.a.
To precise: the villas are €6000/week EACH.
You might enjoy this BBC documentary entitled “A farm for the future”, as I did. http://www.youtube.com/watch?v=xShCEKL-mQ8
Not surprised to discover you have Italian connections. Thanks for the input!
Depression. Absolutely. I have 3 friends, in their 40’s and 50’s, who have been laid off from good white-collar jobs with no good prospects. They are all facing the possibility of forced early retirement to catfood lifestyles, after 2 decades as upper middle class. Their jobs are gone – outsourced abroad or swallowed up by managerial capture.
My husband’s long-term prospects aren’t looking good either. His company is getting both – the new management gleefully outsourced manufacturing to get bonuses for cutting wages, and to hire cronies for a blizzard of new middle management positions. They fired the entire manufacturing division, except for a small rump for work legally required to be in the US. Then they found out there’s a critical piece of custom machinery in the now-idled US facility – and the people who know how to build a replacement are fired or even previously retired. Oops.
Depression/Recession. I just graduated from law school, my wife has a good job that she is fighting to keep. Because of that job and our personal and business connections in our city, it seems unwise to pick up and move to find a legal job that we have no assurance will be stable.
For now I am working at a restaurant washing dishes and learning to cook, doing yard work for a disabled man, helping my wife’s grandpa on his ranch. My plan is to start helping individual clients with immigration issues and try to start my own law practice.
I’m not sure how we are going to meet all of the expenses that are coming, student loans, bar dues, malpractice insurance etc. In short, this is not what I expected after finishing law school, it feels like a depression. Still, I’m grateful to have work and a good life, all I can do is keep working and praying.
Chris,
Hang in there. If there is one thing I’ve learned from the hardships it’s that there is a blessing somewhere inside them. Sounds like you are getting to spend more time with family-something perhaps you otherwise would not have been able to do. We live in a much smaller condo (850 sq. ft for 4 people-no yard) but the blessing for me is that my older son, now 16, spends a lot more time with us. He’ll most likely move out in a few years and I’m sure I’ll treasure the time with him for the rest of my days.
Sending you blessings.
we
We are definately not out of the recession by any means. Around this area its starting to look more like a depression. Businesses are going out, and not being replaced. at least 90% of everyone I know is either out of work or has had pay cuts. I don’t know the all the correct answers but know things have to change now. Heres a quick place u might want to check out dailyjobcuts . com
“This is a Great Depression with shinier media.”
Great observation.
People were pissed off about the economy in 2006 and before the crash in 2008. Its why the Democrats won because people didn’t think the Republicans had a clue about the economy. Unfortunately, the Democrats believe the best strategy is hand clapping.
This country was deeply dissatisfied at the heights of the housing boom. This is a Great Depression with shinier media.
I’ve made a prediction to some friends that I fully expect a Ross Perot-style independent candidacy in 2012. If there was ever an instance where such a candidacy could succeed, it’d be 2012 based on the current state of the country and the recent performance of the two parties.
If there is any truth to Steve Keen’s analysis as recently posted, I don’t believe there is a political answer to the current economic crisis. I don’t think either party can fix this, and neither party is void of responsibility. We will be sinking deeper into a crisis which will probably bottom in 2016. If anything, I’d say that the 4-year (once-renewable) presidential term, may be at the root of problems. Strategies are seldom (NEVER?) devised to solve issues of consequence, but to lurch through a term in a manner that positions one for re-election. Like bankers in their field, politicians have learned how to game the outcome. Democracy served us well, yet it must be debated … and probably reformed. The financial crisis is only the beginning … wait for energy to hit … then the environment. We will not make it as a race without an evolutionary leap of sorts, and I really can’t see it emerging out of bule/red politics.
brazza, that is my feeling as well.
Greer in “The Long Descent” put it well: this is not a problem (a problem has a solution). This is a predicament. We can’t resolve the predicament; we can only choose how to respond to it.
Sorry don’t know if you can place links or not http://www.dailyjobcuts.com
I know exactly what you mean, pretty shaky out there.
Commercial real estate in AZ…I wonder how many of the brokers are eating. Really. Shopping center that leased at $22/SF in 2006 is now leasing at $10/SF plus free rent. Who will be able to refinance their commercial properties when balloon payments come due? Most brokers say we have not hit bottom yet.
My job is safe and even if the institution disappears,I can 1retire comfortably. The Washington DC area is only marginally affected by the great recession. People walk the Malls with a bag in each hand; they buy a lot still.
Older workers, above 40, who make more money are layed off and younger people, typically out of college, are replacing them. Managers think that the only knowledge needed in management knowledge.
It has always amused me that the “official” end of a recession is when we have hit bottom and _started_ to get better, while common sense would call that roughly the mid-point of the recession and not claim the recession was over until we’re all the way back up out of the hole. I mean, does anyone really think the Great Depression ended in 1933?
Depression, but then I’m up in central Maine, where the joke is “We’ve always been depressed!” It’s an extractive economy, forests and the sea, but the mills are all gone now, and as industries they’re being replaced by landfills (which will ruin our groundwater) and wind farms (which will, no doubt, be sold to municipalities for a dollar when their tax breaks expire).
So if recession is when your neighbor loses their job, and a depression is when you lose yours, this is a depression. I get by combining income from blogging (yes, one of the lucky few) with rental from the house. Of course, I’m going naked, so if I have any significant illness I’ll get smashed like a mayfly.
Like most of the others, I don’t see this changing, except for the worse. This is the new normal. Don’t get me wrong, I’m doing very interesting work, and there are times I’ve been happier than I ever was in corporate life, but I’m resigned to the idea that whoever’s running the show here would rather that I and those like me die off as rapidly as possible, and have carefully created the conditions for our average lifespan to start dropping, just as in the collapse of the USSR. There’s really no other way to read the policy decisions taken than that.
So, best of times, worst of times.
Greetings from Jackson Hole, until recently the wealthiest county in the US. The Puzzleface Ranch just sold for 5 million–sounds like a lot of money but three years ago it was offered for 25 million. Construction of imitation cowboy mansions has ground to a complete halt from what was a billion dollar per year business. I guess even the super rich have decided that they don’t need another 12 million dollar house in which to spend a few days over Christmas.
I worked the past three years in Canada where I made twice what I could in the US. However once I retired I couldn’t afford to stay, because living costs and housing in Vancouver BC are twice what they are in the US. Right now a $500 per month guest house with a view of the Tetons and a freezer full of elk and moose meat looks pretty comfortable, but if I had to look for a job it would pay $12 per hour making beds in the Four Seasons Hotel.
When the next round of economic collapse arrives with the fall winds, my next move is to join the waves of senior citizen economic refugees and immigrate to the Dominican Republic or Cuba where I can afford to live on a limited income.
I’m nervous, but just nervous. I finished my MBA in December 2008, after an internship with a company in the middle of a merger so no offer. I started a contract in Feb. 2009 that just ended, and I’m now looking for the next position. (I do supply chain and international compliance in MN, just in case anyone’s looking :-) I know I can meet my expenses for a while.
I’m networking, working with a couple agencies, applying to jobs and studying. I’m improving my database skills and prepping to take the Customs Broker exam in April. I’ll probably start taking a community ed Mandarin class in January.
Industrial and manufacturing companies around here are starting to hire again after layoffs last year. Anecdotally, companies are starting to invest in capital equipment and spend cash again.
My family has experience forced retirement and pay cuts but we knew the recession was coming back in 2006 so we were well hedged with lots of savings. It’s sad so see what’s happened to the people who didn’t listen and simply called us paranoid.
Someone else posted from Seattle:
“Washington has laid off thousands of teachers and state & local gov’t workers, and, unless you’re a 25 year old with a comp sci / math masters, the job market is dead – in my not humble opinion.”
I’m in my 40s in Seattle, not 25, but for software development, things are booming, particularly in the mobile space. I’m turning away work. Yesterday heard an ad on the radio; Marchex was sponsoring an NPR radio show because they had twenty openings to fill.
But I think this is a good illustration of our problems. The things I know about are really good jobs, definitely > $100k, lots of perks, and interesting work. But there are just tiny numbers of great positions for an even smaller number of people who can do them. I don’t think things are good for your average DBA type working for a small business.
I am family physician in Portland, Oregon. For many years I have primarily attended poor populations here and in the Third World. Five years ago, as a cooperative with several volunteers, I started a very low cost solo practice primarily treating addiction and psychiatric illness in the working poor and have an abundance of patients, including occasional upper class outliers. The trend here in employment and income is slow attrition, though accelerating–more and more people out of work, not finding work etc., including long-employed middle class, some now living in shelters, with family, consolidating households–the obvious. The most striking, appalling and pathetic trend though is the large portion people of all ages opting to take on huge amounts of student debt and “ride out” the “downturn” by going back to school. Jesus wept.
SFBay Area. . . To me, this seems like we’re out of the recession but only in the sense that we came out of recessions in the 1970s. (Why do Hirsh, Huffington, and others ignore the decade of the 1970s when they repeat the meme that the middle class has been declining for 30 years? It was declining during the 1970s but that period is ignored by the pundits. Why?)
In general, things aren’t good. Unemployment and underemployment are high, as they were in the 1970s even when we weren’t technically in a recession. The people I know who have recently graduated from high school or college are finding jobs within a few months (which was not true for the high school or college grads I knew in the 1970s). However, except for nurses and teachers, almost all the recent college grads are working in jobs that don’t require a college education (same as in the 1970s). A couple of them snagged jobs at Google, though, so they will probably do well.
People in their 40s and 50s are generally doing ok except for the hits to their retirement savings and home equity. Many are worried about their jobs because of the bad economy but are relatively secure (though working more hours for the same pay). Those who took out HELOCs to pay for medical bills or their kids’ education are worried, but most will probably hang on to their homes unless the market tanks again. Many of the consultants and small business owners in are struggling, though. Few of those who lost their jobs are finding new ones.
Probably because I graduated into the 1970s recessions (and had to intermittantly live in my car and regularly dumpster dive for food during and after college), I’ve always lived fairly frugally. In winter, we set the theromstat between 40 (in hard times) and 62 (when we’re flush). We didn’t get AC until a few summers ago when I got very sick from the 100+ temperatures. (No AC isn’t as bad in the Bay Area as in many parts of the country – many people don’t have AC – but outside SF itself, most of the area gets hot in the summer.) We only use AC when the temps are over 100 or when temps in the 90s make one of us sick. We don’t go on vacations except to visit and help disabled family members. We buy used. We send our kids to public schools and universities. We don’t seek medical care unless we’re very sick. We’ve always done that. My family will be ok but this feels like the 1970s again, i.e., we may not technically be in a recession but it sure feels like one.
I worry more about my disabled brother in the midwest. Costs for his medical insurance are increasing (even more so than for many others) since health care reform is phasing out the subsidies for Medicare Advantage plans. His primary source of income is SSDI plus a small amount of interest income. His income is around $1100 a month. His medical expenses are over half of that and are likely to increase faster than his income. He gets food once a month from a food bank. That food includes food from USDA for my brother and others who qualify. There have been more and more people showing up at the food bank. Last month, he didn’t get any food from USDA because the food bank ran out. That also happened a few months ago. A friend who volunteers at another food bank in that area said that the numbers of people who need food continue to grow.
I agree, as a 1970 grad fortunate to get a railroad labor job I think the Boomer entry to the labor force presented a poor (and unexamined) position in the supply/demand economy and never recovered.
Its going to get worse. 50 plus will be unable to regain meaningful and well paying funding while depleting thier retirment funds. This will breed increasing hostility. Expect anarchy.
Anarcy-hum, we can hope. Things need to get stirred up around here and I’m guessing it will get worse before it gets better. I’m not getting any younger so I’d just assume we get it over with!
Personally, I have been doing just fine during this recession. I managed to sell all my US properties by 2007, and although the house in Greece likely went down in value, I don’t really care, since last year we converted part of it into a new dental office for my wife. And that dental office is going great, with her seeing on average 10 – 12 patients a day, which is a lot more than what most other dentists in town get through their doors. Plus, since that’s Greece, most of it is cash business…
Just a month ago I found a job at a VA in California, so we’ll be in the US for about a year now. And we’ll rent here, by the way. After that we’ll likely return to Europe for good.
So, we have a positive cash flow, we don’t have any debts, and no properties to lose money on. Oh, I almost forgot to mention that my gold investment has almost doubled in value in recent years.
So I have little to complain about. My rants around here are motivated more by self-amusement and by my dislike of seeing injustice (of which there’s plenty to go around in this country).
Psychoanalystus
It’s great to hear from NC readers from all walks of life. Looks like there’s a wide variety of situations here. Good luck to all of you who are not in great financial shape! When I say I feel your pain I mean it. I’m not a politician. I’m not in a bad situation myself now but I know I can get there in no time.
Things will only get worse. This country is no longer under democratic control. By “democratic” I don’t the party of course. I refer to the original sense of “power of the people”. When you think of it, the names of the 2 parties have become completely ridiculous, Orwellian. Neither serves the “demos” or the “res publica”. The Republicans rail against anything “public” for pete’s sake! The Democrats are just more hypocrite. I suggest 2 new names for those parties: “corporate party 1” and “corporate party 2”.
From San Antonio, TX
Twelve years ago two friends and I bought a three-acre lot in far northwest Bexar county, the county San Antonio is in, because we wanted to get away from the hustle and noise of the city. There were already three houses on the property serviced by city electricity, septic tanks, propane tanks and a well. Over the next years the city grew up around us, and three years ago we decided to sell the property and go our separate ways. I had already bought a five-acre lot in the opposite direction from the growth of the city to build my dream/retirement home when we sold the three-acre property.
We’re still all living on the three-acre property, and it’s been for sale all this time. We must sell it as commercial property, as it’s in the city’s extra territorial jurisdiction and will be zoned commercial when the city annexes this area (the city wants the tax money from all the surrounding development), even though the property will be grandfathered-in as residential by the city as long as we live here.
My two “propertymates” work at a restaurant supply company and have not been downsized or part-timed, although they have not had a raise in two years and all bonuses have been stopped. Their company is not booming as in past years, but it hasn’t been hit hard by the recession, probably because it’s almost completely a cash business – the company carries fewer than two dozen credit accounts, and those only for long standing customers with multiple locations.
I am a small business owner, work from home and employ only independent contract workers. Five years ago I owned five franchise businesses. I decided to start selling them off in preparation for retirement, and sold three of them before the economic downturn hit. I parked the money in what I considered safe investments and decided to build up the other two franchises before selling them, meanwhile giving me a decent income.
San Antonio (metropolitan area population approx. 2.1 million) has not been hit as hard by the recession as other areas of the country. Currently unemployment is a little over 8%; housing prices have dropped some but not precipitously and the residential real estate market has not been flooded with foreclosures. We had 16,126 foreclosures in 2009 (largest number in two decades), and the number is running 6% less this year. A 2000sf home in a middle-class suburb can be had for about $150,000, although a larger lot and fancy amenities can double that price.
Food prices have increased only slightly (we’re blessed with two growing seasons each year and a plethora of farmer’s markets). Energy prices are relatively stable: our electric company is publicly owned and enjoys some of the lowest rates in the country. Strangely, gasoline prices have been stable or falling since June (currently $2.65/gal). Commercial real estate has been at a standstill for three years, but lately commercial foreclosures have begun rising, mainly retail space in large shopping areas and strip centers.
San Antonio has made good use of their portion of the state’s cut of the federal stimulus (once the governor got his head out of his ass and accepted the money); lots of roadwork, parks upgrades and expansion of common areas. The road in front of our property is being upgraded from a sleepy strip of farm road to a 5-lane throughway with curbs and sidewalks, scheduled to be completed in the next year or so.
My propertymates and I had a “business meeting” at dinner one Saturday evening about two years ago(we have dinner together every Saturday evening; sometimes friends come over to have dinner with us too), and decided that we should all just hunker down, pay off our debt and resign ourselves to staying here until the roadwork was done and the commercial property market picked back up. We are now all debt-free except for the mortgage on the place – one person has three months left on a car loan – and we’re just hoping no large expenses crop up (problems with the well or septic tanks). We’re also hoping the city doesn’t annex us any time soon, which would make for a substantial rise in property tax.
All of us who live on this property were reared by parents who lived through the depression, and we were all taught at an early age to avoid debt and live within our means. We have all run into financial problems of our own making in years past that impressed on us quite cruelly that our parents’ advice was spot on (it’s sometimes difficult to admit your parents were right), and none of us has repeated those mistakes. That’s the key I think: don’t live in debt, even though it’s tempting, and when it’s unavoidable, pay it off as soon as possible.
Maybe it is technically correct that the recent recession ended, but so what?
The recession definition and its importance seems anachronistic to me. It’s as relevant today as any other measure that is used to forecast/plan/rationalize using the debunked models we’ve been spoon fed for at least the last generation.
At best it could be argued that it explains one piece of the puzzle, while ignoring the others and obscuring the larger picture. It provides political cover to those who exploit our ignorance.
For example, Steve Keen’s work seems to be much more relevant and informative in that he draws our attention to the bigger issue, total demand, of which GDP is one factor (if I’m reading him right) In that case splitting hairs about the meaning of is (how is ‘recession’ defined, are the inputs valid) is a huge distraction.
The recession may be over for now (and FWIW mine and my 40-50 yr old sidelined mid to sr peers is far from over) but the crisis is still in its early stages.
I’m reading Lords of Finance and the similiarities between today and the 20s to 30s is sobering and a bit terrifying. The scariest bit is that we are still pretty much at the mercy of central bankers and Treasury officials and big bankers as we were then. At least they had Keynes to shout bullshit, who’s the modern day equivalent?
I believe we are on the cusp of a major economic crisis, perhaps even a complete collapse of the fiat currency. All fiat currencies throughout history have failed, eventually through devaluations and unmanageable political promises.
Our unfunded entitlements cannot be met across private, muni, federal levels. Every sector of the economy is swimming in debt. The muni crisis is in full swing.
The fractional reserve system is mathematically doomed to collapse at some point (it depends upon growth in order to pay interest and return principal). Expecting economies to grow forever is an assault on physics and real science (how systems cannot grow to infinity).
In the Depression, most people lived on farms. Now we have a disjointed urban society built upon the assumption that everything runs smoothly. Look at New Orleans during Katrina. That’s what we have coming. I have food, water, etc. ready for the SHTF moment. How many days before the grocery stores are empty/looted?
I believe we’ll come out on the other side. Either with a central planning facist system, or a de-centralized freedom-based society. I hope for the latter.
The following remarks, which come from a presentation that Wal-Mart CEO Bill Simon delivered at a Goldman Sachs retail conference sponsored by Thomson Reuters a week ago, certainly suggest that not everyone in this economy got the bulletin that the recession is over:
The paycheck cycle we’ve talked about before remains extreme. It is our responsibility to figure out how to sell in that environment, adjusting pack sizes, large pack at sizes the beginning of the month, small pack sizes at the end of the month. And to figure out how to deal with what is an ever-increasing amount of transactions being paid for with government assistance.
And you need not go further than one of our stores on midnight at the end of the month. And it’s real interesting to watch, about 11 p.m., customers start to come in and shop, fill their grocery basket with basic items, baby formula, milk, bread, eggs, and continue to shop and mill about the store until midnight, when electronic — government electronic benefits cards get activated and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher.
And if you really think about it, the only reason somebody gets out in the middle of the night and buys baby formula is that they need it, and they’ve been waiting for it. Otherwise, we are open 24 hours — come at 5 a.m., come at 7 a.m., come at 10 a.m. But if you are there at midnight, you are there for a reason. And we have to look at that and we have to watch that and we have a commitment to serve those customers who need that. And we are very, very focused on that.
The complete text of Simon’s remarks are available here:
http://media.corporate-ir.net/media_files/irol/11/112761/WMT-Transcript-2010-09-15T15_55.pdf
(See page two of the document for the excerpt quoted above.)
These remarks have been republished elsewhere recently but most of those doing the republishing seem to miss the delicious irony implicit in Goldman Sach’s being the sponsor of the venue at which they were delivered.
Here in the islands of trade winds and falling coconuts, falling wages, falling real estate prices, and cinched up hula skirts life due to high food and energy costs, the natives seem not as restless as mainland natives.
As long as Senator Inouye keeps military contracts and Fed largesse flowing this way, the tourists keep trickling into the hotels to maintain skeleton crews, and retiree savings are being spent on lawn mowing and other services – Life here will muddle along with Aloha until the Chinese come to redeem their US Treasury investments and buy everything available.
Treasury market trader. Boomtimes. Try to waste a little money to help others while savings a good bit for leaner times.
21 year old student in the Bay Area currently getting a masters in Biocomputation at Stanford. Getting a masters in Biocomp. was somewhat of a hedge against my undergrad software skills, which are all too likely to get outsourced/replaced with younger talent when I’m 40. Thankfully, I have zero loans/debt as I was able to finance my education completely through financial aid and fellowships. In fact, I will probably graduate with $30k in savings. Live frugally for the most part but do spend money on good, healthy food and travel (figure I might as well do it while I have the time and money).
I still get regular recruiting emails from tech. companies so not exactly a recession for me personally but I think it’s a bleak future. In the field of software, the writing regarding outsourcing has been on the wall for a while and the ease with which an older programmer can be replaced for one who’s younger, cheaper, and almost as good is not comforting. Besides, as a senior technical engineer your salary is probably going to flatten out at around $150k-$200k and that’s by the time you get to 35 or so and if you’re lucky. Now I don’t care to have kids (people say I’ll change my mind; we’ll see), but for someone who did, $150k a year is not enough to support a family of four in the Bay Area once you factor in the mortgage, kids’ school expenses and college savings, 2 or 3 cars, retirement accounts and what not. As a result, the second parent typically ends up working too. Now maybe I’m old fashioned, but I hate the idea of having both parents working and the kids being brought up in day care centers. Recession or no recession, the idea that both parents have to have jobs to support their kids, that one of them can’t voluntarily quit to spend time with their kids does not equal to a good life in my mind.
So, my options are to get lucky and somehow strike it rich as an entrepreneur in Silicon Valley, to work in tech as a software engineer or to work my way up the business/management ladder. Fortunately, my education and location do give me a lot of flexibility in what I can do. The entrepreneurial option is appealing, but I find the solid ideas (from a business perspective) these days require extensive domain knowledge unless you’re willing to take a huge risk on a ‘business’ like Twitter. I think there’s still a bubble in the startup/VC world with too many social networking/Web 2.0 companies getting funding that don’t have any viable business model. I predict over the next 5 years a lot of these will fail. (I won’t look for an improvement in VC returns over the next 5 years, at least not in the US. A lot of VCs these days seem to follow what Buffett would call the greater fool paradigm of investing.)
Now that’s not to say that there still aren’t many opportunities in my field; there are many but they tend to be in things like enterprise software, virtualization, etc. which need a lot more domain knowledge than some young kids writing up a website in PHP/MySQL. Consequently, the startup, if and when I do one, will come later in the career. Leaves me with the software route or the business route. The points against software I’ve outlined above. My main beef with the usual software companies (MS, Google, Apple, etc.) is that they seem to have really weak programs/career paths for fostering business talent in people with technical knowledge (I’d like to think of myself as an engineer who is also business savvy). Moreover, people with strategic thinking seem to be a rarity in the software world for the most part, and I say this having interacted with computer science graduates from Stanford that then go on to pursue careers at the large SW companies. So, at the end, as much as I’m inclined against the business/management route (for multiple reasons; but to summarize, it’s a lot of generalist bullshit jazzed up with Powerpoint slides and weak numbers and faulty Excel models), I think it is the safest long term career option both from an economic (in that I’ll probably be able to retire comfortably) and professional standpoint (in that I will, hopefully, have my pick of industry and will be able to develop business skills for when I need them later in my career). Now, I happen to find myself in the somewhat enviable position of having interned at one of the top 3 consulting firms and having a full-time offer outstanding, so that makes it even more seductive. Having initially deferred my decision, I am now seriously reconsidering based on how weak the economy looks (I’m predicting a lost decade, FWIW).
I also run a small mail order music business part-time in high-end discs, and sales have been significantly down. Most customers (in the US and UK) complain of hard times and product that would have sold at 1.5x the price two years ago is still sitting with me.
To summarize, no recession for me personally. Though I haven’t looked for a job in over a year now, I think I could probably have my pick if I wanted. That said, the future looks positively scary. Especially for the middle class. FWIW, I’m not a US citizen, and in some ways, the smartest thing to do would be to go home or work somewhere in Europe or the UK, but I like this country too much. Oh well.
Apologies for going on and on. Slow day at work.
Here in Colorado I’d definitely say recession. My wife and I, with impeccable timing, closed on a house in May 2007. Even with my mother-in-law building a 1400 sq ft addition we’re barely above water.
I was laid off in spring of 2008 which worked out to good timing. The recession signs were there. In my area of engineering contract rates had dropped and companies were freezing positions. I looked for a bomb shelter and went to a company I know. I took a 25% pay cut but they are deeply profitable and have never had a a layoff. They work us hard and give crappy raises but I can stay here until I die or my 401k returns. (I’d bet on death happening first.)
Steve
Muddling along. I have a job that is fairly secure, although there has been a salary freeze for some time, and our health insurance premiums have increased. I rent, but in a rent stablized apartment.
I live in New York City, though, and its amazing how costs have been going up. With a rent stabilized apartment, I’m somewhat insulated from the real estate costs -the property bubble still seems to be going strong here- but still have to deal with the increased subway costs and the costs of lots of incidentals going up. I’ve also noticed more beggars, but also more high end places that obviously cater to wealthy people opening. Also storekeepers and restauranters being somewhat trickier in what things really costs, trying to cage a little extra from their customers, or in the case of restaurants cutting the quality of their food.
I got hit with some big health care expenses last year, and have a wedding coming up, so I will have to cut back spending or I will see my savings vanish. I’ve noticed there are no good places to invest, so any unusual expenses mean cutting into the principal. I’m not sure where to cut, I may have to start staying in the office for lunch and I would prefer to have an excuse to get outside sometimes during the day. Maybe I should take up smoking.
Greetings from Stockholm, Sweden.
First of all, it is very impressing (even inspiring) to read about how some commenters are handling hardship that average Scandis would find hard to even understand.
As to the status in Stockholm, it oddly feels like the recession/downturn has passed us by. I know of no one who has lost their job, nobody talks about pending redundancies, spending pattern seems to be steady, restaurants full, vacations booked. Wednesday is “Little Saturday” so the bars will be jumping tonight with youngster who are supposed to be hard hit by high youth unemployment.
Feels like trouble is around the corner, though. 60% of GDP made up of exports. Unemployment (massaged numbers) at c.9%. Household indebtedness keeps rising, property market still going strong (you can bid on houses on your mobile by sms, which just seems sick). How long can it continue?
Anyhow, stay strong America.
Our income has declined 40% over the past eight years. The prices we pay for food, energy, taxes, insurance, tv and internet, which is the bulk of our purchases have increased by 10-50% per year. We live in the St. Louis metro area in Illinois.
Many of the folks we know are experiencing real difficulties: threatened with unemployment or taking cuts in pay with longer hours or higher pressure to produce, unemployed with little to be optimistic about.
No the recession isn’t over it is being continually reinforced by government policies which favor the wealthy and corporations. Saying Obama is anti-business in one of the GREAT lies. We are losing jobs in the vast majority of months and we know we have to create these every month just to break even for the people entering the job market for the first time.
I do think it skews results toward the positive end when the question is asked of those with internet, computer, and reading this blog. My guess is we readers are better off than a huge chunk of Americans.
My response to Yves query is simple. The United States is in the throes of a long-term economic decline associated with the loss of labor power and the rise of the power of capital. The apparent economic well-being expressed by many, is the result of temporary stimulus via substantial deficit spending, credit and quantitative easing by the Fed, and to some extent, the willingness of creditors to continue to extend credit as creditworthiness declines. The U.S. is also blessed with a frightening military and the dollar is the world’s reserve currency which increases the nation’s creditworthiness. All of this is subject to change. Some choose to believe it will not change. Others accept the adage that that which cannot continue, won’t. Eat, drink, and be merry…
I work for a NYC real estate developer. The rental business has been strong for the last year. But mainly this is due to people not wanting to buy. The sales market is weak. On a personal level, my total compensation is down 20% in the last two years. My wife is a VP in a major company. She was given a small increase in pay last year but her bonus was 50% less.
I’m a software engineer in the healthcare biz. My company laid off about half its corporate staff but i survived. My wife is a school teacher and survived multiple layoffs. So far our income hasn’t suffered because of our good fortune. A lot of my friends are architects and they have been hit very hard. All of them, except for one, are out of work and making it day by day. I’ve noticed more homes for sale in my neighborhood and lots and lots of signs on telephone polls either selling foreclosed homes or buying foreclosed homes.
btw, I live in little Mexico in Dallas. I’ve definitely noticed a slow down in activity and energy on the streets and traffic. This is inline with middle and lower middle classes getting hit harder than upper middle and high(?) classes.
I’m in central Iowa. Honestly, I don’t get out that much, being disabled. But I see the shops here hanging on, a few closings, but mostly stasis. The strip malls have been overbuilt, so there are many empty stalls that will probably not be filled for a long time.
A good friend has been out of work or underemployed for going on 18 months. I wish I thought it would get better for him, but I don’t. He and his wife just had a child. Thankfully the wife has an income, plus whatever part time work he can pick up.
Personally, I was in cash before the market crash, and my home, which I own free and clear, has not changed much in value. So my net worth was not hurt. But how to generate any income? This is a problem. With rising taxes and minimal returns on savings, we are not going to be stimulating the economy for a while.
Greetings from Seattle area and the construction sector. I checked the AGC website today and we’re now down (nationwide) to 17% unemployment in construction. (In March it was 27%). So there has been some movement, but I can’t tell how detailed those stats are, or how many people just got out of the industry.
I feel fortunate to be in the Puget Sound region, since there is a big variety of construction employment options: private clients with money (Boeing, for ex.,), and lots of military and government work. (I have friends in Las Vegas construction and it is terrible there all up and down the spectrum of skills: longtime construction accounting folks out for over a year, 2500 construction workers showing up for 200 jobs at a new Target…)
I was in commercial big box and retail, which as far as I can see has pretty much withered on the vine. Used to do tons of work up and down the west coast even a couple years ago – that is now all gone, or dwindled to very little. Developers I knew started seeing problems in ’08 when they couldn’t get loans, and retailers are holding the line and not spending on improvements or maintenance work. I was very very lucky to get a job with a company doing lots of public works and government projects, and pretty much every person I knew in my career is doing the same. (At reduced pay, of course!)
What galls me about the response from DC hasn’t just been the cluelessness about how hard it is out here, (what do you expect from millionaires?), but the depth of ignorance about WHO is out of work. I’ve gotten the impression that the MSM and DC all think that the unemployed are factory workers, WalMart greeters, or other “low skill” people. Why else would we be hearing (even from Bill Clinton) about “skills mismatch” and other bull? The vast majority of unemployed that I know are skilled, white collar people with tons of experience who would be valuable additions to any organization.
I feel very fortunate to have landed at a company small enough not to care about specific skills, and be willing to train on specific equipment/programs. Yet even so, I am facing higher bills from health insurance and lowered pay, and years and years of digging out and clipping coupons. Thank God neither my spouse nor I ever cared about keeping up with the Joneses, as we only have the mortgage to worry about. Yet I am simmering with anger: I didn’t go to school for two BAs, work my butt off in a male-dominated industry to succeed, and keep my skills extra sharp to be handed a tenuous, lower middle class lifestyle in my 40s.
I blame DC for their lack of stewardship and cowardice, and Wall Street for their fecklessness and ruthlessness.
PS – I love this blog and the commenters here. It is my first stop most days while surfing around.
If the recession is over why is the unemployment rate in the County where I live almost 20%? There are more vacant buildings than there are occupied and there are still many people losing their homes. I think the DEMOs just want everyone to think that something good is happening so they won’t get voted out in November. Too Bad, you are GONE! We’re mad as heck and we aren’t going to take it any more!
In Kansas City area, the economy seems basically frozen-no growth, just maintain what we’ve got. Big corporations here are not hiring in general or are slowly laying off. People are in hunker down mode–keep the job and hope for the best. Very little job mobility. I’m hoping to keep my job. If I lose it, I’d likely have to move out of KC and face the terrible prospect of selling my house.
Residential real estate is hurting again ever since housing credit expired. There are 4 houses for sale on my block–all $300K+ and not moving, just reducing price $10K/month.
We had a lot of commercial construction even in the lean years, but a lot of those projects are coming to an end while many other commercial properties are stalled out with debt or liens. We have some great, unfinished monuments to the bust.
There was a brief recovery from about July 2009 to April 2010, but that’s it. Back to the grind it seems.
We’ve fixed the roads through stimulus, now can we have some actual long term commitment to larger initiatives through stimulus part 2?
One other thing, I’ve been out of school in the corporate world for 15 years. Most years, I’ve maxed out my 401k contributions, but when I look at it, I think what the hell has happened? Without the company matches, I would have really been screwed. I can’t imagine what my retirement would be like unless I start getting some growth out of this thing.
If people are not saving outside of their 401k (God help the people who aren’t even saving!), there is trouble ahead.
My family is not in recession, as I am another Seattle Techie, now working at a big software company here. In my 50’s it is harder to get the plum tech jobs, but the skills are in such high demand that I continue to do well.
I tried (and am still working) on an important medical device startup, however the regulatory and investment environment is clearly at a cyclical low.
My cobra insurance was due to expire, which was the main driver of getting a real job. It turns out my young daughter got a ruptured appendix a week after I would have been without insurance. I cannot imagine how less fortunate families handle a situation like that.
I would describe it getting worse before it gets better. If you read some diaries from the 30’s — there’s some fundamental social and political problems resulting from bad choices and behavior.
People wanted to get rich by passing the hot potato, and that’s just not how great economies work. False economies do just that. You can’t re-inflate your way out of trouble this time.
Any person that has gone through depression realizes that you must “break the cycle”. We haven’t done that yet. Until you change some of the bad choices and behaviors the cycle will continue.
We refer to this as a recession, but once we look back on it, I’m sure many would agree it was a downright time of depression.
Well in June of 2009 I was laid off from a twenty year job. In September of 2009 my husband’s high tech manufacturing plant closed up. Both being in our 6o’s means this recession/depression was just starting. Right now our COBRA subsidy is over; we have three months left at full costs and then…
San Francisco — a tale of two cities. The people who work for blue chip corps seem to be doing fine, hanging on even if being sapped a bit by pay freezes and increased health care costs. Food costs are going through the roof, with a basic loaf of bread not on sale costing $5.00 and gas is over 3.00 a gallon again. People working for city and state are being hit with furloughs, meaning pay cuts, but at least for now have secure health care and pensions.
And even the otherwise well off are being slammed if they have to pay their own health insurance costs, a real struggle to pay at nearly $1000 a month for people in the 50s and 60s.
BUT: anyone who worked for a small firm has been slaughtered. Small law firms, real estate agents, small consulting firms, even small medical operations (my own doctor’s office filed for bankruptcy) — hit very very hard. Home prices seem to have remained high, but people can’t get loans — so the asking prices seem awfully optimistic. STill, there are still those few lucky ones working for Google or Apple to toss in a bid.
In my job, I teach many many adults from all walks of life, and except for the ones employed by the mega-corps everyone has had someone in their household hit by unemployment or pay cut.
Most everyone I know in their 50s who work or did work for private and not public employers are feeling pretty insecure and unsettled about any retirement future.
And by the way, most everyone I know is a registered Democrat and almost everyone I know is planning not to vote for them again.
We supply cutting tools to major industrial companies throughout North America (Automotive / Aerospace / Mining / etc.).
Despite the general news on the demise of manufacturing, it is still alive and doing well. The demands are changing – no one buys large quantities of “standard” product instead they are purchasing engineered “specials”. They buy fewer specials, but last longer and produce better quality.
Last year was a complete disaster with dropping demand and lowering inventory levels, but during this year we have seen growing demand across almost all industries. We are not back at 2008 levels, but we are up significantly from last year. Although we have a smaller crew than in 2008, we are working overtime and have a number of openings for machine operators.
Last week was the largest manufacturing show in North America. Attendance was down, but only 15% to 20%. People were interest and talked about increasing demand. We have cautious optimism for the rest of this year and more optimism for 2012.
well here in Texas can’t say we are doing well. My wife’s sister and husband are unemployed (and have been for a while now). My daughter’s husband, and his parents are unemployed also (luckily she works in health care).
Brooklyn: Unemployment/underemployment is rampant; probably over 20% for the unskilled and for young African American men. Some clients I meet are subsisting on little more than a food stamp allotment. After many years of personal poverty and underemployment, I am finally working full-time, thanks to the economic crisis. My new job- public interest foreclosure attorney. I expect to enjoy my middle class salary and benefits (admittedly a pittance compared to what they make at the big firms)for at least a year or two until the funding dries up.
Orange County, CA. My husband lost his job in 2006, though he did get a gig with the census here for a couple of months. He has a BA and most of the others hired with him had advanced degrees–engineers and such, including recent college grads. We sold our condo in March during the tax credit offer. Yes, we lost money on it, but we had equity due to a large down and 15 yr mortgage. We decided it was better to treat the situation like a stop-loss and lose that rather than letting the rest of our equity erode. Happy we did because we are now mobile and no one else has been able to sell in our complex since. While OC has had its ups and downs in real estate over the decades, this time feels different. Prices are finally coming down, even in the better areas, and are staying on the market longer. I am seeing $100k price reductions after being on the market only a month or two. Partly, this is due to unrealistice pricing at list but I’ve attended some open houses and many of those trying to sell these larger homes (2400 SF+) are OLDER–70’s, 80’s and are probably fearful of losing more by waiting.
I work in consumer lending for a credit union that is larger by our industry standards. We had wage freezes in 2009, but are now giving some small increases to our best employees. We still have 401k matches, our benefits are good, and we avoided layoffs through attrition and repositioning existing staff. Our lending was relatively conservative before the financial implosion. Our capital is strong, though the NCUA assessments due to the corporate credit union problems are eating into it. Our gross consumer application volume has been steadily dropping since 2008. 2010 app volumes are averaging 40% lower than 2008 volumes. Used auto loans now outnumber new auto loans by about 10 to ;the average new loan amount is falling and older cars make up 25% of our used auto financing. Members are also paying off auto loans at a much faster pace making it nearly impossible to keep up with runoff. My job now includes managing loss mitigation efforts to save existing loans, though this has also slowed in the last month and it’s more difficult to find anyone now who wants to “save” their unsecured loans. Bankruptcy filings are also increasing. Many members are returning to loss mitigation for additional help because they have exhausted all their benefits. But the NCUA restrictions mean we often can’t do anything to help a second time. We have had members living in their vehicles. We refer to food banks.
Malls in our area are busy, but more as entertainment (a place to go)unless you are at one in the wealthier areas, like South Coast Plaza.
I am extremely grateful that we have no children to worry about. I moved my 401k funds out of stocks just before the big hits, so avoided losses there. We pulled out of the stock market, including my husband’s IRA, in time. We have savings beyond our retirement funds and a home that is paid in Colorado that we could de-camp to, if necessary. Things are not better here, they appear to be getting worse. Of course, California’s budget woes are well publicized but they will also get worse. I really believe we are in a depression but no one I know will use the term because it’s too scary.
I work in tech manufacturing and have been on 32 hour shifts all year. Probably will be on 32 hours for the next one as well.
The recession only ended for Wall Steet.
The rest of us are still in it.
We should get astrologers to keep those stats.
Not economists.
Atleast some real observation of something concrete is involved. Constellations, planets, stars and the like.
Seems more real than economist/soothsayers going over made up mental models and dodgy numbers. Reading chicken entrails is probably as accurate as anything the NBER could come up with.
SF Bay Area.
I work as a contractor in IT, and ran out of work last November but found something new in March with 15% less pay. I’m in my mid 40s, debt free and renting, frugal all my life as my way to respect things. Rents seemed to have stopped dropping here, food prices occur stable to me, with weekly special prices even slowly going down. Health insurance will go up almost 30% next month after 2.5 years unchanged, almost in line with my expectation of 10% annual increase.
Two thirds of my gf’s coworkers have been laid off during the last 4 months, she still works 65 hours on 6 to 7 days a week. She leased a BMW X5 two years ago before we met, I think she has changed her view on some things now.
As a plan-for-the-worst guy, I see plenty of opportunity coming for putting things into practice… I am sure we are in the early stages of a depression.
I wish we were able to move the discussion away from the “are we in a recession, a double dip, or a recovery?” to one about the long term structural problems the west (particularly the US) faces. But, alas, that isn’t going to happen outside of specialized blogs such as this. Yves, we are undoubtedly in the midst of a tectonic shift that threatens the very essence of democracy and capitalism. The last 40 years of fiscal and monetary policy, special interest group lobbying and the abdication of political responsibility, the concentration of wealth and erosion of the middle class, asset bubbles, media radicalization, institutionalized theft in the FIRE industries, over consumption, an entitlement mentality, and the broader decay of public education, have starved democracy and capitalism of the oxygen that keeps them alive. Gone are the sanctity of property rights, the freedom of economic mobility, and the belief that tomorrow will bring ever more prosperity.
We are beyond a recession, despite what the NBER, CNBC, and the MSM will tell you. Only with time will we reach a consensus that these principled ideals that frame our country have been extinguished. Our best years are behind us.
To wit, you asked about personal experiences. Let me relay mine.
I have 2 advanced degrees from a top-25, internationally renowned research university. My thesis advisor is a well-sought after pundit in the economic and business lecture circuit who commands nearly 6 figures for his speeches. He has published numerous books on topics pertinent to US competitiveness and economic prosperity. I have provided him with key intellectual insights, countless hours of research, and much sparring time over many topics. Upon receiving my degree, over a decade and half ago, I entered into a private consulting practice. There, I spent 2 years working on very high profile management consulting case studies. I had access to THE titans of corporate dealmaking–people who defined the genre in the 70s, 80s, and 90s–and for whom the spoils were quite lucrative. My compensation was adequate, but by no means on par with newly minted MBAs taking on junior analyst roles at big 8 firms, the Bains, McKinseys, and their ilk of the world. I often wondered why, with my superior education and knowledge, I couldn’t make the kind of money they made.
The lure of the Internet revolution came knocking on my door and I answered. Thus began a 10 year run in entrepreneurial tech, web, and software companies. I started two companies, raised several million dollars, took home pay in the mid 6 figures for a few years, had a nice house, a vacation home, traveled well, sent my kids to private school. I was ensconced in the upper middle class. All was good. Then in 2005 I took a job with a small tech company. Management was dysfunctional, the product was shite, but they were brilliantly positioned. Ultimately the 800lb gorilla in the networking industry scooped them up for a ridiculous sum. But I jumped ship (long story, not relevant) and went to work for a similarly dysfunctional small software/hardware vendor in the educational space. Publicly traded firm that couldn’t get out of its own way to make a profit. The recession hit. I was a highly compensated non-executive employee (aka, fat). I got the axe. Didn’t help that I’d call out the CEO for his bankrupt vision. That was Jan 08. I haven’t had a full-time job since. So I’m on my own, reinventing myself in a totally different space, trying to reset my life and carve out a simply middle class existence for my family.
In the process we picked up and moved from a region of the country that has a 120+ cost of living index to an ~80 cost of living index–a huge savings on the expense side that should allow us to live on $100K per year–which is what my wife and I determined we could manage with on our own self-imposed austerity program. But such a program was only possible by moving from where we lived, where our housing, food, transportation, and related costs made such an austerity plan nearly impossible.
So we put the house on the market and moved away to begin new careers.
The house. It’s been on the market for 18 months. It’s a 200 yr old, completely restored farm house located in your favorite state. We bought it in May 2005 for $490K. We put over $250K into it–new roof, complete electrical, new barn, new office, new master bath, driveway, landscaping, paint, well pump, fences, walkways, deck, 2 bathrooms, kitchen renovation.
It was to be the house we would stay in for 20 yrs.
Then Jan 08 came, and the income was gone. No longer could we stay in the house.
So May 09, on the market it goes. $649K. Fair price for the market conditions. We didn’t think we had any illusions, despite every realtor fawning over the house. PM me and I’d be happy to show you the link. Some nibbles, no bites. Six months later, we drop it to $599K. By now we’ve moved out, to begin new lives in a new place. Nothing.
Fast forward to today. Our house sits on the market at $419K. I asked our realtor at what price do I need to list it to sell it in 60 days? $399K to sell it in 60, $429K if you can hold out longer she tells me. We chose $419K. We got an offer a week later. But there’s a catch…the buyer has to sell theirs. We’ll see what happens. The jury is still out on this one, but the clock is ticking and time is not on our side. BTW, we haven’t strategic defaulted, skipped a mortgage payment, or requested a refi–though the sand is running out of the hourglass and we’re being bled dry, so our hand will be forced very soon.
So that is our reality…You tell me how we’re not in a fundamentally different paradigm? No, all this claptrap about recession etc, is fucking bullshit. Yes, I’m angry. And I have every reason to be. People in this country are ignorant, arrogant, and apathetic. And the fear mongering wing nuts of the GOP, the Palinites, and their Fox News handmaidens are only fanning the flames of hysteria, spewing their hate, misinformation, and vitriol to a stupid and eager public.
No, this isn’t a recession. This isn’t a double dip. This isn’t a recovery. This is a full-scale assault on the fundamental principles of democracy and capitalism in this country and I’m afraid that train has already left the station.
Nik
I live in Northern California – STATS for me and my family:
-Husband sold his business in early 2009 – now we have cash and no income
-Father owns property in So. Cal. – the State is not paying so no rental income in 3 months, Post Office is cutting space, Furniture retailer wants me to reduce rent from $17,000 per month to $7,500. Property insurance, utilities all increasing.
– Niece – laid off as architect, her husband is still working.
Other than that – everyone is working and I consider myself fortunate. It’s the new normal – less income, more expenses, no debt, so can survive. I think the U.S.A. is in big trouble, developing countries not so much.
“we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex… The potential for the disastrious rise of misplaced power exists and will persist… Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.” WWII Supreme Allied Commander and President Dwight Eisenhower dire prediction comes true.
And we haven’t “won” a war since WWII. It’s not about winning now, it’s about raiding the treasury. It’s always “guns or butter”. An actor that played a warrior in the movies pushes “Star Wars”, a flunky flight leuie invades and now it’s endless war. Good Luck.
Partner and self unemployed since April, 2009. Partner just got a part-time, short-term job paying 25% of what he used to make. He’s thrilled. We were both in the nonprofit world, which was hard hit by the 2007-2008 crash, and we are in the 50+ age group that is having trouble finding work.
That’s the bad news. The good news is, we don’t own a house; and we didn’t lose any money in the crash. We both have socialist health insurance (Medicare and MinnesotaCare). I am old enough to collect Social Security, and he will be in five months. Amazingly, we do have some savings, though Social Security is going to be vital.
We are fairly well educated, but never considered ourselves middle class. His family history of poverty and my family memories of the Great Depression made us big fans of no debt, cash and FDIC insured accounts.
I’d call this a severe recession, trending toward a depression. My parents made it through the last big one as young adults. I wish I were younger, healthier and more able to throw bricks.
In N.E. Florida, our congressman is trying to get a nuclear powered aircraft-carrier, a veteran’s cemetary and prisons for the 23% dropouts in the lowest rated school system in the nation. Go figure.
“ALL ANIMALS ARE EQUAL, BUT SOME ARE MORE EQUAL THAN OTHERS”
– George Orwell, Animal Farm, Ch. 10
4 degrees and in the later years and I am cutting trees down and cutting grass. My hands are caloused with the labor of holding the tools of my employment. Two years of manual labor.
I sit in Germany now having been hired as an expert in Purchasing and Lean Six Sigma.
“I will work harder!” – George Orwell, Animal Farm, Ch. 3
Agree that the recession ended about last June. Our business clearly perked up right through about end April of ths year. Since then, and allowing for typical seasonality of sales, it has flattened out. For every customer that is feeling a little more secure there is one feeling nervous. We tightened our credit criteria in June, but it didn’t have the down effect I thought it would. Businesses maybe poor-mouth a little, but have some cash reserves is what it feels like.
State University Prof of AACSB accredited Business school with a Doctoral Program. Three years in a running with no pay raise for all Profs, coupled with 15 days of furlough every year says it all. Going by history, we will likely follow the Japan route and more states will be edging towards bankruptcy. Colleagues feel that this is the make-or-break year. If our trajectory is more akin to Japan, then, it’s time to bailout from state universities and join the private universities, or better still Fed jobs. Most Fed workers still get pay raises with no furlough. I am hanging in there, but trying to strategize my next move.
Yves,
Still waiting to hear what your reality is during this storm. I would be very interested in your opinion and what’s happening in NYC from your window.
retired in 2006 (whew!), moved out to the Mountain West. only debt is $800/mo mortgage payment. wife and I have pensions and SS each, and two 6-figure IRAs. We planned and stuck to disciplined savings so we are OK. We have hobbies and travel a bit (2-3X annually).
We were so lucky to get out of the workplace whole as retirees before TSHTF. We are fine. Our kids and relatives are worse off and struggling, though.
Our community is a mixed bag: some doing fine, some in dire straits. Lines at job fairs, foodbanks. UE in our state is 8.9% last I saw. Job openings s are all for $7-12/hr stuff. very few IT, technical openings, fierce competition for those.
Our nation is in a depression, no doubt about it; just varies by degree.
Truck Driver, 39, Terre Haute, IN. It’s a recession for me. After a year of pay cuts, was laid off from my long term position in June. Cashed out the battered 401k, cleared all the debts except for the house and established a small emergency fund. Have been working for a staffing service since. The pay is lower and the benefits are a sham but it lets me stay with the home every night lifestyle I prefer. I’m still doing very well for the area (making mid 30s now, was in the mid 40s).
There are plenty of driving jobs out there but most are Over The Road and involve 2 to 3 weeks at a time living in a metal box working 70+ hours a week then a 36-48 hour “hometime” (where you mostly do laundry, sleep, and try to catch up with family in the gaps). If I can’t find something decent by spring I’ll probably have to give in and go back on the road.
There is less “slack” in hiring standards. Companies are still looking for drivers but there are fewer exceptions made than during the boom years. The position I’m filling is open because the previous driver smacked a pole backing up. Did about $3k in damage. Four years ago you’d be written up and as long as you didn’t have another “oops” within a year it’d be forgotten. Today, after a cursory investigation you’re out.