1sunfight’s Weblog

January 1, 2009

Signs of an Economy in Turmoil

There have been many signs of an economy in turmoil, both domestically and internationally some more telling than others, all important.

It was not all that long ago that where I saw that our economies were in serious trouble. It was a little over five years ago, a year before I graduated from college. I started looking for a job a year before I graduated from college knowing the job market was not good. It remained that way even after graduation. It was a sign that the recovery from the recession immediately following 9/11 was weak. In fact, I thought it was an outright lie. I would submit my resume to businesses, manage to get an interview, and then learn that my resume was one of 800 to 1,200 received for the one position. I was also informed that if the job market was in better shape I would have a much better chance of getting the job I was applying for given the amount of experience I had, but there were far more people applying for the position that had more education and experience than I did. For a while I was afraid I would never find a professional career, one that I had gone to college for to get a degree that took me seven years to get. Much of this took place in Bush’s “boom” economy. Sure it was a “boom” economy; it was being fueled by excessive credit getting handed without any thought of its consequences. It was a Bush fantasyland. Heads stuck in the sand.

While that was going on I watched the real estate boom. I kept getting told now was the time to buy; buy while credit was easy, buy while loans are easy to get, buy because the values of houses are going through the roof.

It took me three and a half years to find a career worth having. I did not find that job because the job market was great or even good; I found that professional career because of tenacity, because I stayed in touch with the university I graduated from. And now Bush’s economy is the worst since the Great Depression with a job market that is so bad it is estimated that a person keep a nine month supply of cash for just in case. It used to be six months, which I have, but not the new standard.

As for the housing market and buying in it I choose not to buy. First, it was too easy; second, it was filled with false promise and false hope, the prices on houses seemed inflated and were. Today’s housing market is proof enough, not just with the number of foreclosures, and credit crisis, but the amount by which the value of houses are falling. As a result, I will continue to wait. As a single income household I will not assume the risk of buying into a market that is still in free fall. The housing market promises to stay that way for the foreseeable future.

One other aspect that signals a dismal economy is that Barack Obama is polling highly as a strong decisive leader, the highest in three decades for a president elect. It was the same for then President-elect Ronald Reagan in 1980 at a time when America’s image was at an all time low, when the economy was in the tank, and inflation out of control. The difference we are facing today is not inflation out of control, there is no credit, and we are facing deflation just like the Great Depression. Americans are desperate for real leadership, and Barack Obama is promising just that.

As for globally, even oil producing nations are feeling the pinch; nations that should get through a global downturn with ease, or at least easier.

However, the gloomy economy hit home on a more personal level last night when I took myself out to celebrate the New Year. I went there last year for dinner, my dinner was exceptional, and the cost of the meal was quite high, but that was to be expected. Last night the first thing I noticed was that the cost of the meal was much lower than last year, but the food was just as good, if not better. As I left, I was approached by the owner as I am noticed and liked by him. He told me that he had to lower the cost of the meal this year because the economy is bad. He did not want to drive away his customers, he wanted them to have a fabulous dinner and evening out, but he had to lower prices to do it and he was taking a huge hit to do it. There are so many things that are wrong with that. It makes me angry.

The Venezuelan government has cut the official number of US dollars Venezuelans can buy for use abroad for $6,000 to $3,400 a year.

The measure aims to preserve foreign currency reserves amid the global economic crisis and Venezuela’s declining oil revenues.

BBC

Real Estate prices are in a continued state of decline.

Home prices posted another record decline in October, falling 18% compared with a year earlier, according to a closely watched report released Tuesday.

Sunbelt cities suffered the most, but most of the country is watching home values fall. Home prices in Phoenix, Las Vegas, and San Francisco all fell more than 30% on a year-over-year basis. Miami, Los Angeles and San Diego recorded year-over-year declines of 29%, 28%, and 27%, respectively.

“As of October 2005, the 20-City Composite is 23.4%,” said Blitzer. “In October, we also saw three markets enter the ‘double-digit’ club.”

Atlanta, Seattle, and Portland each reported annual rates of decline of about 10%.

CNN

Across the country, home prices fell faster than ever in October, providing fresh evidence that the nationwide housing slump was nowhere near an end.

Atlanta Journal Constitution

A national poll suggests that three quarters of the public thinks President-elect Barack Obama is a strong decisive leader, the highest marks for a president-elect on that characteristic in nearly three decades.

CNN

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2 Comments »

  1. This is probably one of the few pieces I’ve read on the economy that explains exactly in layman’s terms what’s happening without insulting my intelligence. Nicely written.

    Comment by SewDucky — January 1, 2009 @ 6:01 pm

  2. […] unknown wrote an interesting post today onSigns of an Economy in Turmoil « 1sunfightâ??s WeblogHere’s a quick excerptWhile that was going on I watched the real estate boom. I kept getting told now was the time to buy; buy while credit was easy, buy while loans are easy to get, buy because the values of houses are going through the roof. … […]

    Pingback by Real Estate Newbie Info » Blog Archive » Signs of an Economy in Turmoil « 1sunfight’s Weblog — January 2, 2009 @ 1:59 am


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