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Welcome to the 'recession'

Discussion in 'The Atrium' started by Heatherthepackgirl, May 27, 2008.

  1. Heatherthepackgirl

    Heatherthepackgirl Cheesehead

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    Buffett says we're there. Greenspan says we're likely so. It may not be official, but the question is: How long will the funk last?

    NEW YORK (CNNMoney.com) -- It's getting harder and harder to deny that the economy is in recession.

    Warren Buffett, the world's most famous investor, proclaimed this weekend that "we are already in a recession."

    Former Federal Reserve chairman Alan Greenspan told the Financial Times on Monday that there is a greater than 50% chance of a recession.
    Talkback: Is the economic downturn almost over or just beginning?

    But with all due respect to the Oracle of Omaha and the Maestro, they are not telling us anything that the average American consumer didn't already know: this economy stinks.

    Whether the economy is technically in recession is missing the point. Consumer confidence is anemic. Home prices continue to fall. The unemployment rate has risen sharply over the past few months. Food and energy prices are soaring.

    In fact, gas prices have run up so much that Americans are even starting to give up on their love affair with the automobile: the Federal Highway Transportation reported yesterday that Americans drove 11 billion miles less this March than a year ago.

    We may not find out for several months if the National Bureau of Economic Research, the official arbiter of recessions, decides to label this economic rough patch an actual recession. And the economy may not ultimately decline for two consecutive quarters, a shorthand definition.

    Gross domestic product eked out a 0.6% gain in the first quarter, according to the first reading of that figure released last month. An update is due out Thursday and economists have a revised forecast of 0.9% growth.

    So the most pertinent question now for consumers and investors should not be if we will enter a recession but how long will it last?

    Buffett and Greenspan are divided on that question. Buffett, speaking in the German weekly Der Spiegel, said that the recession "will be deeper and longer than what many think" while Greenspan said to the FT that "the probability of a severe recession has come down markedly."

    So how can two financial legends have diametrically opposed views on the economic outlook? Well, these are confusing economic times. Even the Federal Reserve seems to be uncertain of what's next.

    On the one hand, the credit crunch that paralyzed financial institutions late last year and earlier this year seems to be ebbing.

    Wall Street has been responding well to this development: the S&P 500 is up about 7% since mid-March, when investor fears were greatest. That's right around the time that JPMorgan Chase (JPM, Fortune 500) agreed to "rescue" Bear Stearns (BSC, Fortune 500).

    And the Fed also seems to think the worst may be over on Wall Street. It has indicated that it probably won't cut further its benchmark federal funds rate, which currently sits at a relatively low 2%.

    That should be good news for investors. In a note to clients Tuesday morning, Harris Private Bank chief investment officer Jack Ablin pointed out that since 1984, the S&P 500 has gained, on average, 21.5% in the 12 months following a final Fed rate cut in a cycle. "History suggests that the S&P 500 enjoys strong gains once the Fed puts their interest rate ax away," Ablin wrote.

    A sustained upswing in stocks could go a long way toward lifting consumer sentiment, especially since many consumers have seen the value of another key asset, housing, fall in the past few months.

    But the central bank is also growing increasingly worried about inflation in food and energy dragging down the economy. The Fed's series of rate cuts have weakened the dollar and some economists suggest that the greenback's sluggishness is the main culprit behind the spike in commodity prices.

    Even one of the Fed's policymakers shares that view.

    According to the minutes of the Fed's April policy meeting, released last week, Dallas Federal Reserve president Richard Fisher suggested he "was concerned that...lowering the funds rate had been pushing down...the dollar, contributing to higher commodity and import prices, cutting real spending by businesses and households, and therefore ultimately impairing economic activity."

    The Fed also updated its economic forecasts for 2008 last week and the picture isn't pretty: the central bank reduced its growth target for the year while also boosting its forecast for both inflation and unemployment.

    So which is it? Is the downturn almost over because banks are recovering their footing? Or is the recession only beginning thanks to runaway price increases at the supermarket and pump?

    Personally, I think it's an encouraging sign that, despite many economic problems, consumer spending has held up relatively well during the past few months. In addition, the government reported today that new home sales, while still at a historically weak level, rose unexpectedly in April. Any signs of life in the moribund housing market has to be viewed as a positive

    And as I've argued in several recent columns, the fact that many big corporations have ample amounts of cash that they are using on mergers as well as to buyback stock and increase dividends is a good thing. Unlike prior recessions, Corporate America may help to keep the economy afloat even if consumers pull back.
     
  2. PackOne

    PackOne Cheesehead

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    I just got laid off thirty minutes ago. I am terribly terribly screwed.
     
  3. Pack93z

    Pack93z You retired too? .... Not me. I'm in my prime

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    That completely sucks.. many of the folks working in the factories around here haven't had a full paycheck in almost 7 months.. anyone thinking this country is in anything but a recession is ignorant as hell.

    Hopefully though through all of this this country stops and takes account of its priorities as a nation..
     
  4. Heatherthepackgirl

    Heatherthepackgirl Cheesehead

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    So sorry to hear about your lay off Packone!! How long did you work for your company? There is so much of layoffs going on right now, we are in a recession no matter what anyone says IMO. Its just so bad, I wonder how long it will take to recover.
     
  5. PackOne

    PackOne Cheesehead

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    I worked there since the day it opened. I am a student so it is difficult to find employment that will work around a schedule. I walked in this morning and all my available hours were given to a new employee that was more flexible. They said if I didn't like it I could leave. With one scheduled day a week, there was really no reason to stay.

    It is perhaps the most arrogant move I have ever seen.

    Bye Bye well being.
     
  6. Zombieslayer

    Zombieslayer Cheesehead

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    Oh man!
    Sorry to hear that. I hope you can get something else.

    My job went to India in '02. We still don't have the net worth we did in '02. So I feel anyone's pain who has been laid off. Been there.
     
  7. PackOne

    PackOne Cheesehead

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    Wow, that is a loaded and perhaps not that smart paragraph there.

    *Edited by AADP
     
  8. PackOne

    PackOne Cheesehead

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    Thanks man.
     
  9. cheesey

    cheesey Cheesehead

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    I would run if i thought i'd have a chance to win! But i'm sure i'm way to conservative for alot of people.
    Anyway.......it always amazes me how people blame whoever is in office for the economy. Like Bush pushed a button, and the economy went to hell. I didn't like Clinton or what he stood for, but he had no more control over the economy then any other president did.
    If you are looking for blame, look to the oil companies, and to factories that try to push their profits up at the cost of employees and consumers. Also look to employees that take no pride in their jobs. They want LOTS of money, but don't want to have to actually work for it.
    Back in the "old days", companies were owned by a person, that most likely was on site all day. They had their name on the company, and took pride in that fact. They hired people that wanted to work, and if they didn't work, they were fired. They treated their employees with respect, and they were like family. If you had a loss in your family, they genuinely cared about you and helped you through it. They had company picnics, bonuses for when you did a good job, and holiday parties for their workers.
    But today, most companies are owned by big corporations, and they have no personal touch with whats going on there. I worked at a place that was owned by a man. He treated his employees well, and did the types of things i listed. Then he retired and sold the place. It went down hill immediatly. All the little extras, that made the place special, were gone in 3 months. It went from a fun place to work, where employees were happy and worked hard, to a place where someone was always looking over your shoulder, and the workers learned to hate management very quickly.

    I think what it all boils down to is greed. By owners and workers.
    Thats my opinion on what has caused the downward spiral of our economy.
    Look at what Packone just went through. I bet even though he had only a small window when he could work, i bet that when he was working he EARNED his money. Yet the place he worked for says "If you don't like what we did to you, too bad". Now, if i owned a place and had a hard worker, i'd do whatever i could to keep him/her. They give his hours to some newbie, who might be more "flexible" hours wise, but will this person be a good worker? Most (not all) companies don't care a lick about their workers. Thats from my own expierience. I always worked hard, and only rarely was it appreciated. I was pretty much treated the same as the lazy people.

    *Edited by AADP
     
  10. PackOne

    PackOne Cheesehead

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    I agree with alot of what you have to say cheesey. I do 'earn' my money when I am at work, even if this just was a day bartender gig. I showed up early everyday and worked sometimes an hour for free, knowing that the extra work needed to be done. Yes, my availability was limited, but I showed up and worked. I have the utmost respect for those that have worked hard, and find themselves at the top of the food chain. It is quite commendable. I also agree that many of those people don't realize how lucky they are, or for that matter, could care.

    This year, no Christmas party, no bonus, not a single free drink was ever handed out. Employee discounts on food were dropped as well. I understand the need to tighten up, but remember who brung ya.
     
  11. digsthepack

    digsthepack Cheesehead

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    A recession, by definition, in any other time, is 2 quarters of economic contraction. We have not had that.

    And, for what it is worth, there are jobs out there. Unfortunately people are under the false belief that they are entitled to work in the same industry their entire lives, and live in a preferred area for their entire lives. The reality is that there are MANY higher end manufacturing jobs out there that will probably require people to "invest in themselves" with continued education....and perhaps relocate to where the work is. I mean, if you will not invest in yourself, why should anybody else. Plants in the "rust belt" are not going overseas....most are relocating to the south where taxes are low, open shops do not cripple employers with unions and all they bring, and operating expenses are lower. For what it is worth, I have been downsized twice, and had to relocate once to maintain my standard of living. Would I have liked to spend more years at my remodeled 109 year old home 6 blocks off of Lake Michigan versus living in the Twin Cities? Sure, but at what cost?

    To blame an emerging middle-class in China and India.....and all the consumption of goods that go with it.... on Bush is rather foolish. What do you not understand about supply and demand....and the fact that OPEC sets the prices on the world oil supply...which is what is driving many of the problems we currently face?

    In summary, while all politicians have been screwing us raw...*


    *Edited by AADP - Sorry digs, I respect your opinion and right to have an opinion, but forum rules are no politics.
     
  12. PackOne

    PackOne Cheesehead

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    Although I can't argue with your logic, as I am far from an economics guru, the above statement is a very easy one to make, but extremely difficult and at times unrealistic to accomplish.

    As a pushing forty year old student, in the middle of continuing education, I feel qualified to make that argument.
     
  13. wischeez

    wischeez Cheesehead

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    Sorry to hear about your job loss PackOne. Hang in there and keep an eye out for something else.I know it's going to be rough.
     
  14. cheesey

    cheesey Cheesehead

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    :yeah:
    I couldn't have said it better.


    *Edited by AADP - Took political part out of quote
     
  15. PackOne

    PackOne Cheesehead

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    Thanks. I got invited to go fill in on a baseball team tonight. Lots of aggression just waiting to turn into homers. I'll find something. I always do. Having a bartenders license certainly helps.
     
  16. wischeez

    wischeez Cheesehead

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    If you're a licensed bartender, check out bowling alleys too. My ex was a bartender and worked in one.
     
  17. Zombieslayer

    Zombieslayer Cheesehead

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    Uh oh.
    Politics have been mentioned.

    Now just waiting for the obligatory Nazi/Hitler reference then the Lock soon after that.

    :pop:
     
  18. longtimefan

    longtimefan Super Moderator Staff Member Super Moderator

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    Bartend at a packer bar!
     
  19. PackOne

    PackOne Cheesehead

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    How about start a Packer bar? Who wants to be owner?
     
  20. Zombieslayer

    Zombieslayer Cheesehead

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    Not me. Too much work.

    But I'll hang out there.

    Let's see...

    A bar, where people talk about booze and the Packers all day long. I'm soooo there.
     
  21. Pack93z

    Pack93z You retired too? .... Not me. I'm in my prime

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    I thought long and hard about buying a bar a couple years back.. decided to take a pass on it.. long hours, long weeks.. like a farm, a bar never seems to shut down or take a day off.. would miss too much of my kids life to do it.

    And in this part of the country.. it just won't be profitable enough if you didn't run most of it yourself.

    But I think there would be some fun parts to owning a sports bar and grille..
     
  22. Tiger

    Tiger Cheesehead

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    thats pretty much true, a big buzzword in Ireland during the Celtic Tiger economic boom here was "UpSkill" whereby everyone including those all ready in the workforce were encouraged to improve their education and qualifications. Having free university tuition to all citizens sure helped but its a neccessary requirement to keep a nation competitive for outside investors. Whether we like it or not we live in a Post Industrial Society.
     
  23. PackOne

    PackOne Cheesehead

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    I went out and banged on doors the last few days begging to mow lawns. It seems people are more than willing to pay ten bucks or so to mow. So, anyone who complains about not having work, use your two feet and get by till you find a job. It can work.
     
  24. Zombieslayer

    Zombieslayer Cheesehead

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    Oh, fo shizzle.

    The thing I used to do as a teenager was go door-to-door with two spray cans (white and black) and a stencil set and ask to paint curbs.

    Having a blue collar skill always helps too. You can always join a work crew.
     
  25. PackOne

    PackOne Cheesehead

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    In six more years when everyone calls me Dr. PackOne I shall look back at it all and laugh, as I relax in my large home, on a small lake, with large fish.
     

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