Be glad we don’t live in Zimbabwe. Since 1981 they’ve experienced 2.2 million percent inflation.

If you watch/listen/read current US news reports, one would think we had 2.2 million percent inflation!

Case in point...ABC World News Tonight did a report on food inflation...claiming to have inside access to government projections for food prices. They highlight 3 or 4 food items (I honestly forget what they were). They showed the inflation thru the first half of the year and said that next year prices would be (GASP!)...higher!! No mention of how much higher in 3 of the 4 instances....just “higher” prices. Wow! Ground breaking journalism there folks.

I hate to be bearer of bad news...but prices year over year are almost ALWAYS higher.

Want to feel better about the economy? Just turn off the tv.

Uncomfortable Answers to Questions on the Economy
by Peter S. Goodman
Tuesday, July 22, 2008
provided by
New York Times

You have heard that Fannie and Freddie, their gentle names notwithstanding, may cripple the financial system without a large infusion of taxpayer money. You have gleaned that jobs are disappearing, housing prices are plummeting, and paychecks are effectively shrinking as food and energy prices soar. You have noted the disturbing talk of crisis hovering over Wall Street.

Something has clearly gone wrong with the economy. But how bad are things, really? And how bad might they get before better days return? Even to many economists who recently thought the gloom was overblown, the situation looks grim. The economy is in the midst of a very rough patch. The worst is probably still ahead........

“The open question is whether we’re in for a bad couple of years, or a bad decade,” said Kenneth S. Rogoff, a former chief economist at the International Monetary Fund, now a professor at Harvard.

Is This a Recession?

Officially, no. The economy is not in recession until a panel at a private institution called the National Bureau of Economic Research says so. Unofficially, many economists think a recession started six or seven months ago, even as the economy has continued to expand—albeit at a tepid pace.

Many assume that if the economy expands at all, then it isn’t a recession, but that’s not true. The bureau defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months.” If enough people lose their jobs, factories stop making things, stores stop selling things, and less money lands in people’s pockets, it is probably a recession.

Whatever it is called, it is a painful time for tens of millions of people. .......

SO IS IT THE ECONOMY or ARE WE A NATION OF SISSY"S?

Bay Weekly by Bill Burton

The Right Stuff

Has the good life spoiled us?

While Jerusalem had only one Wailing Wall, in Wall Street every wall is wet with tears.
–Anonymous

The above Great Depression words came to mind the past week when the front page of The Wall Street Journal was inundated by worrisome financial news. Fannie Mae and Freddie Mac were mired in deep doodoo; the federal government had seized the nation’s second largest bank, Indy Mac of California done in by bad loans; giant clothing chain retailer Steve & Barry’s had gone under.

As I passed a small group of old timers in the fruit and vegetable section of Lauer’s market, I overheard their assessments of the day’s news as they interpreted it from morning TV and The Sun. One aged man — wearing a cap indicating he had served in the Navy in World War II and thus was old enough to have lived in the Great Depression — was winding up the conversation with words to this effect:

We’ve all been through this before — recessions, depressions — and we’ve survived. We’ll do better than the younger ones. They haven’t been through many hardships, but they’ll learn like we had to learn. We’re better prepared in these days. It’s all part of life.
[...]

Can We Tough It Out?

This could go on and on. We’ve become soft from too much of the good life. It’s so prevalent that we think of it not as a way of life, but the way of life. There’s no other way to go.

That’s why within this old man’s thoughts concern lingers for this country and its capability to ride out a bump in the road. Right now, insufficient energy is the culprit. When we get over that hump, ahead will be insufficient clean energy to thwart global warming. Will we learn before it’s too late the responsibilities and even the sacrifices that go along with living the good life? That’s the big question. Enough said.

I do think those of us that went thru the 70’s in very bad shape but made it, and have been used to depriving ourselves will be much better off than those who have always done pretty well and done what they wanted and have spoiled themselves.

(I agree with his sentiment above : Will we learn before it’s too late the responsibilities and even the sacrifices that go along with living the good life? That’s the big question. Enough said. )

Is this a recession or are we a nation of whiners? These are not mutually exclusive concepts.

The recession issue is still up for debate.

Without a doubt we have become a nation of whiners. The majority of people in this county have completely lost touch with the concept of personal responsibility. It is ALWAYS someone else’s fault. We spend all our time on figuring out who to blame and none of our time on trying to fix the problem. It doesn’t matter what the issue is. Naturally the most currently relevant is the price of oil/gas. The suppliers say it is the fault of the producers, the producers say it is the fault of the gov’t, the gov’t says it is the fault of “speculators”, the consumer blames everyone...then hops in an Escalade or Denali, by themselves, and drives 90mph.

Recession or not, the financial pickle that many people find themselves in is completely of their own making. Lack of savings combined with an overstimulated pursuit of material possesions (ie wasting assets) have left too many people with no possibility of weathering the current economic ickiness. The housing and credit crises are the direct result of too much greed by all involved...buyers, sellers, bankers and Wall Street.

Ask people to explain the difference between the basic principals of “need” and “want”...most can not do this, because they do not know the difference. I could go on and on about this...it is a major pet peeve and the obvious reason for the financial difficulities of many people I see.

Even our own county government has no idea what the difference between need and want is...just look at the idiotic fiscal choices our commissioners have made. I actually heard a county commissioner say that the Capital Clubhouse was an appropriate use of taxpayer money and that the commissioners are very careful when spending our money...then 10 minutes later, as he was getting grilled about all the recent teen traffic deaths, he said that driver’s ed in the school system was “too expensive”. I wanted to scream.

I very much agree that many do NOT know the difference between need and want, must have the latest gadget, gizmo or phone....yet does not understand why they have issues? after all they are only replacing their year old item that needed to be replaced (?). Their kids HAVE to have a cellphone to stya in touch as everyone zooms thru life…

It too is a frustration of mine.

In pschology ithere is much attention paid to this type of spending and the lack of being able to wait more than 4 weeks for something they want. Mamy do deprive themselves and feel a lack until they almost explode and feel the need to reward themselves for working so hard- yet dont get the coorelation that these “small” expensesadd up to a large amount of money.

I think our elected officials have some of that personality- you want to please in some way and after all it is only $25,000. But as you can see for the State each of those $25,000- to $50,000 grants add up to something big.

Home Prices Plunge Record 15.8 Percent In May

todays news: July 28th 2008

ADP shows job increase of 9,000 vs expected loss of 60,000.....Gov’t jobs number due out on Friday (I think)

Oil down to about $123 from high of $147+

I also believe I saw an increase in the consumer confidence number the other day.

Have faith...grasshopper...not all is lost!

shadowdiver- keep up the good news- I am increasingly pessimistic personaally- although we have kept our money invested and hanging on waiting for the upturn.

I’ll do my best...but don’t get me wrong...I do not view the world thru rose colored glasses...I just know it isn’t all as dark and gloomy as many want you to believe.

The housing numbers are bad...but, in all honesty, it is to be expected....given how fast and far they ran up. Unfortunately, “we” will forget this lesson in 15-20yrs and it will happen again (same thing happened very late 80s and early 90s).

For an interesting take on the foreclosure numbers check out this article...not saying he is right...mind you...just a different take on the numbers…

http://www.bankstocks.com/ArticleViewer.aspx?ArticleID=5218&ArticleTypeID=2

From my Financial advisors news letter:

Admittedly, it’s tough to get “too” excited about stocks when the news backdrop is … like it is.

It might be worth checking out two articles in Barron’s – page 17 reminds us that more than 100 companies within
the S&P;500 now trade below 10 times 2009 earnings projections, while over on page 34, Leon
Cooperman and Steve Einhorn of Omega Advisors (16% per annum for 17+ years) review their long-term
optimistic case. (Ex-Goldman Chief Strategist Cooperman: “I feel like a kid in a candy store.”).

Tough markets are part of the process, folks, no doubt a less-fun part, unless you are like us and can have
some “fun” bargain shopping for the future. Thanks for your confidence, and have a great week!

At this point I am wondering what the biggest “headwinds” to the economy is?

Is it energy prices and the related inflation?

Is it the housing market?

Is it the reluctance of banks to loan money?

Or is it Alan Greenspan shouting from his soapbox that it isn’t his fault and that the economy is “on a verge” of a recession? (Two things he has been saying since at least last December.)

Not a good day for the numbers...today’s jobs report was bad (although yesterday’s was good), we’ll see what tomorrow brings!...the Q2 GDP wasn’t horrible, but the revision to 4th quarter was surprising.

keep it coming shadow diver- some of this stuff is hard to follow- we need some good reporting here, other than my regurgiatation of news.

Hi all,

VERY interesting commentary in today’s Post (of all places...the wife pretty much forbids from reading the Post business column...as the commentary is soooo poorly done).

Check out the Outlook Section lower right hand side...article by Don Lufkin. (GASP!!) The media is blowing the current economic situation out of proportion!

Read it...it is very very good info and puts into perspective some of today’s “crisis”, particularly as it relates to the “Great Depression”, which the vast majority of Post reporters seem to beleive we are reliving

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/12/AR2008091202415_pf.html

Things simply are not that bad. The one statistic that is thrown about ALL THE TIME is the one about foreclosures. A company called RealtyTrack put out monthly foreclosure numbers. The media picks them up and, consistently calls the numbers the “worst on record”. What the reporter then fails to explain is when Realtytrac first started keeping records.

Was it: during the Great Depression? How about the oil shock economy of the early 1970’s? Or maybe the extreme interest rate enviornment of the early 1980’s? During the S&L;crisis of the early 1990’s? Have they recorded numbers during at least ONE of the 12 recessions we’ve had going back to WWII?

Answer to all is NO. Realtytrac began collecting foreclosures numbers in....2005. Anyone recall what was going on in the housing market in 2005? That’s right...it was one of the biggest booms we’ve seen in my lifetime. So when you hear that “foreclosures are the worst on record”...simply question when those records began and then decide whether or no the data is relevant.