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Is anyone else out there scared about the economy?

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67 replies to this topic

#1 Yari

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    Posted 16 July 2008 - 07:43 PM

    For some reason this past week has me reflecting on what is going on with the economy.

    First the Indy Mac Bank craziness. I mean honestly if you have more than $100K in one bank alone you are not being smart with your money. BUT WTF, the feds seized the bank? That is so crazy.

    The second thing is I just found out two restaurants in my town are now closed due to foreclosures. These are small business owners. The word on the street is that they lost their homes too. I know there are two sides to every story and who knows if they made bad investment deals or took on too much to chew, but it is still so sad.

    It really freaked me out. Thanks to God my FI and I do quite well, but it still has me worried.

    Sorry, this is so long...but I was wondering what everyone elses out look is on this.

    #2 Davematthews16

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      Posted 16 July 2008 - 07:47 PM

      You grow up thinking that the "depression" was just something you read about in text books. Now, the more you grow up and the more you see the real world, you discover that some things are closer than you think. I just try and stay positive and be thankful for my job and what I have. So to answer your question, yes the economy is definetely something to not take lightly.

      #3 NewOrleansbride

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        Posted 16 July 2008 - 07:56 PM

        I work in real estate so I hear about the economy everyday. I don't think it's as bad as it could be. It's A LOT worse in some areas (the places you hear about on the news) than in most.

        IndyMac was probably an unusual case because they specialized in high risk loans. What that means is that they loaned money to people who showed little or no documentation to get the loan and they couldn't afford to repay that loan. I don't think we will EVER see lending practices that loose again.

        The sub-prime mortgage crisis probably won't go away for a while and we'll continue to see effects from it (like forclosures, bad CEO's going to prison).

        It's a lot to take in when you're getting hit constantly with stories about foreclosures, banks in crisis and then of course the costs of oil continually rising.

        As long as you are managing your money well and saving you should be fine.

        #4 nikkianddean

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          Posted 16 July 2008 - 07:57 PM

          I think it is definitely the toughest time in our generation although it is nothing compared to what our granparents experienced in the great depression. In urban areas we do not feel it as much as people who live in say Detroit - people who have watched plant after plant close down and are left with no options to support their families. that makes me very sad. I am also disappointed/sad about all the people who lost their homes because they were approved for loans that were not appropriate for them. As far as IndyMac, the Fed coming in to bail them out was the best possible outcome for those customers. If not it would have all gone to zero

          Freddy Mac and Fannie Mae are being helped out by the Fed now. Hedge funds are investments companies that can "short" a stock. Meaning, they speculate that the stock is going to fall in price so they borrow it from an investment bank and when the price falls (ideally to almost 0) they sell it back and profit from the difference in price. the Fed banned shorting Fannie Mae and Freddy Mac to prtect them from short sellers. When the Fed steps in it is usually as a last resort to save a company, but some people would argue that is is unhealthy for the economy for the Fed to be so active. Ideally in a capatalist society the "weaklings" should be flushed out. Not sure I agree with that because of the impact on jobs etc....

          The economy is cyclical in nature and there are going to be valleys. it is tough, but you have to be optimistic about the future. The only question is the timing. For people who have disposable income now is a good time to buy stocks because they will inrease in value. just don't quote me on the date

          hang in there yari!!! There's a light at th end of this tunnel!

          Mr. & Mrs. C
          February 14, 2009

          #5 twinkletoes

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            Posted 16 July 2008 - 08:00 PM

            Originally Posted by Davematthews16
            You grow up thinking that the "depression" was just something you read about in text books. Now, the more you grow up and the more you see the real world, you discover that some things are closer than you think. I just try and stay positive and be thankful for my job and what I have. So to answer your question, yes the economy is definetely something to not take lightly.
            My thoughts exactly! Having been recently affected by the 'economy' (or lack there of, due to a lay-off and thinking my job was secure as it got) I can defitenly say it worries me (especially with a wedding around the corner). It is really saddening to see the # of people in the unemployment office. I am just thankful my FI is able to maintain our household without my income and thankful for savings. With prices of everything increasing daily, its becoming obvious that some of us are being affected. I went grocery shopping the other day and damn near passed out at some of the prices! lol

            Growing up I always used to think it would take a lot for us to go into a depression, or even a recession. But over the years, reality has defitenly made me more aware of my surroundings and made me think more about my future.

            I just pray that things get better soon for everyone!
            2 Hearts, 1 Love 08.08.08Punta Cana, D.R.

            #6 ericaandsy

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              Posted 16 July 2008 - 08:07 PM

              The economy really has me freaked out. We recently have lost 2 neighbors due to foreclosure. It makes me really nervous for wedding planning too since prices keep going up.

              #7 cheese_diva

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                Posted 16 July 2008 - 08:16 PM

                I had a good day... gas was only $4.49/gal instead of the $4.65 I paid last week. :)
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                #8 rodent


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                  Posted 16 July 2008 - 09:01 PM

                  It doesn't get me down. We always keep a really nice emergency fund, our money is well diversified & our jobs are very secure.

                  I've lost a decent amount of money this year, but if that was something that would really get to me I wouldn't have money in the stock market. I just keep in mind there are ups & downs. We are in a BIG down, but as long as you plan well you don't really need to be afraid.

                  #9 Yari

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                    Posted 17 July 2008 - 12:34 AM

                    All of your points are valid. It is interesting to read other perspectives.

                    #10 starchild



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                      Posted 17 July 2008 - 08:16 AM

                      It's definitely crazy out there, and even crazier if you follow the news (people saying there is no recession, people saying hold on to your hats there is a recession).

                      As for our jobs, they are secure but that's what everyone says until they find out they are not! Things can change fast sometimes, we're just glad to be employed now, you know?

                      I don't have a mortgage so that stuff isn't a factor for us. I'll admit the gas doesn't phase me because I don't drive far, and if I did paying 15 cents more a gallon this week than last isn't noticable. I guess the key is as long as its in small increments. If it was going up $3/gallon per week I may complain.

                      Here's what made me notice things aren't right - tomatoes at Von's (grocery chain) are $4 a pound. Not the organic ones but your average tomato. Roma tomatoes which are notoriously cheaper are $2.50/lb - that's crazy expensive for romas! It's still affordable but at twice the price virtually overnight it made me stand up and notice!

                      I'm not sure if it's the awful drought California is going through that is raising prices, or if it's the price of gas to get this stuff from central CA down here, or both.

                      Is produce going up in other parts of the country?

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