The Economy

[Rothko]

I don't know about you guys but it seems like all business has stopped entirely! I don't know what many of you do professionally but retail seems to be suffering a great deal!

Is everyone broke or what!? It reminds me of how business fell after 9/11!

Just curious to see how you guys are doing during this "recession!"

[dananderson32]

Originally Posted by Rothko

I don't know about you guys but it seems like all business has stopped entirely! I don't know what many of you do professionally but retail seems to be suffering a great deal!

Is everyone broke or what!? It reminds me of how business fell after 9/11!

Just curious to see how you guys are doing during this "recession!"

consumer confidence at its lowest in the last 17yrs but bush will just tell you its a "rough spot" in the economy and those "stimulus package" checks are on their way for a whopping $1,200

[homedawg]

Internet sales.

[Kevin]

Unfortunately I think it's going to continue to be horrible until Christmas.

Lots of BIG companies are in trouble as well.

Real estate is going to dive this year even more too or at least thats the way its looking.

[Rothko]

Originally Posted by dananderson32

consumer confidence at its lowest in the last 17yrs but bush will just tell you its a "rough spot" in the economy and those "stimulus package" checks are on their way for a whopping $1,200

Am I naive in thinking that lowering the gas prices would eliminate this consumer fear? It's seems like everyone's just buying gas and milk! Can someone explain why we are paying this much for gas? I'm not trying to start some heated debate...but who the fuck is to blame over this ass rape? It's just frustrating that there seems to be no relief in sight!

[Rothko]

Originally Posted by Kevin

Unfortunately I think it's going to continue to be horrible until Christmas.

Lots of BIG companies are in trouble as well.

Real estate is going to dive this year even more too or at least thats the way its looking.

Amen brother! My best freiend is in developing and he's starving right now! Why lower interests rates when we can't afford transportation to our jobs!

Oh and thanks for the sweet av Kevin!

[Skinsfan]

Originally Posted by Rothko

Am I naive in thinking that lowering the gas prices would eliminate this consumer fear? It's seems like everyone's just buying gas and milk! Can someone explain why we are paying this much for gas? I'm not trying to start some heated debate...but who the fuck is to blame over this ass rape? It's just frustrating that there seems to be no relief in sight!

yes you are naive

what we really need is much higher gas prices to force people and the government to change their habits.... lower gas will just encourage more spending on oil, which will bring the prices back up, and we'll be caught in a cycle (only no one will change their habits and change will be delayed).

in other words, it would only be a quick fix

the real problem is not us, but the indrustrialization of China... they're deman for natural resources is skyrocketing

[Rothko]

Originally Posted by Skinsfan

yes you are naive

what we really need is much higher gas prices to force people and the government to change their habits.... lower gas will just encourage more spending on oil, which will bring the prices back up, and we'll be caught in a cycle (only no one will change their habits and change will be delayed).

in other words, it would only be a quick fix

the real problem is not us, but the indrustrialization of China... they're deman for natural resources is skyrocketing

I see your point Skins but why all of a sudden now this crunch on oil? Is 2008 the inevitable brick wall some have predicted because of our dependancy on oil? Are we really at the end of line where gas is going to be $4 and the blame is squarely on the shoulders of the people!? Why couldn't it have been regulated years ago so something like this could never happen? It's hard to put all the blame on the people without thinking the govt dropped the ball from the beginning!

[Skinsfan]

Roth, a couple of points....

1) the run-up in oil really began about 5 years ago....

2) no one is blaming the people... it is just a fact of life... supply/demand

3) $4 gas is not terribly expensive when you compare it to other developed nations

4) what can the govt do? This is not a USA issue.... if anything the US government should have taxed the heck out of it 5 years ago so that our pump expenses would stay in house instead of exported to the middle east


The "crunch" you are experiencing is not because of gas..... people are still buying it, so it is obviously not priced too high... the crunch is from this country living well beyond its means for the past 25 years.... just take a look at the current account deficit.... Now that credit has dried up, people are less able to mortgage their futures to buy crap today.

In my opinion, we need $10 gas. I live in Northern virginia, which last time i check was ranked as the second worst traffic are in the country (behind LA). And it is STILL growing like crazy.... yet the HOV lanes are still relatively empty, and i swear half the vehicles on the road are SUVs.... people are not changing their habits... they aren't carpooling or taking public transportation.... Until we as a country start changing our oil consumption habits, nothing is going to change. There is minimal incentive to research and develop alternative energy sources in a reasonably quick fashion when people are not being economically displaced.

[NevadaJay]

Well, for starters, they could start drilling for oil in places they know it exists IN THIS COUNTRY.

And let's stop feeding and providing healthcare for illegal immigrants.

And while we're at it, let's expose this whole ethanol thing (it's more of a crush on resources than just producing gas for christ' sake).

And let's stop strangling small business (you f'ing can't smoke in a bar or restaurant any more - let's let the CONSUMER decide...if they don't want smoke, they won't show up...period.). And I'm not a smoker.

That's a pretty good start in my opinion...

[Skinsfan]

some good points, especially re: healthcare and ethanol.... but my question "what can the gov't do" was directed towards Rothko's point of high gas prices...

This is not Russia or Venezuala... the state doesn't own the oil companies, and they can not directly force them to drill for more oil. Even if they did, the increase in supply would be marginal and ineffective in changing the price of oil for any meaningful length of time, imho.

[homedawg]

Originally Posted by NevadaJay

And let's stop strangling small business (you f'ing can't smoke in a bar or restaurant any more - let's let the CONSUMER decide...if they don't want smoke, they won't show up...period.). And I'm not a smoker...

Haven't spent a cent in a bar or restaurant in a year!

[Fish2006]

Originally Posted by Skinsfan

some good points, especially re: healthcare and ethanol.... but my question "what can the gov't do" was directed towards Rothko's point of high gas prices...

This is not Russia or Venezuala... the state doesn't own the oil companies, and they can not directly force them to drill for more oil. Even if they did, the increase in supply would be marginal and ineffective in changing the price of oil for any meaningful length of time, imho.

One of my favorite things about predictem is how the debate here seems to be vastly more intelligent than on places like slate.com where supposed "political" people hang out.

Its true though. You don't add 1 billion Indians and Chinese suddenly driving to the world oil market and expect the price of oil, and therefore gas, to not triple. If you want to see why your gas is expensive, Google for "china and construction".

Last year I spent 2 weeks in India, and the most striking thing wasn't the cows on the road, or a family of seven plus the family goat riding on a single motor scooter, or even the smell of rancid curry and garbage everywhere, but it was the utter pace of construction of new skyscrapers, freeways, malls, and everything else that goes along with suburban life going up there. It is really breathtaking.

We need to find a way to power things like cars on something other than decaying dinosaurs.... I mean oil. Higher prices for oil get us there, because the alternatives go from comparatively price prohibitive to viable. $4 gas gets you hybrid cars, Chevy Volt, the Telsa, and other new cars coming to the market that use less of it. I think $10 gas gets you a viable hydrogen infrastructure.

One of the funny things about politics is "be careful what you wish for". It is interesting how "pro-environmentalism" (i.e. desire to use less gas) - comes at the price of increased poverty for people who can't afford gas. What sucks is that if you are struggling, you are the people least able to adjust to the new reality and least able to pay for it. Don't know the answer to that one, but I dare say that whether you like it or not, thats the new reality.

That all said, gas isn't why we are in a recession. Bear Stearns borrowing money at 100-1 leverage from China and issuing mortgages (through brokers) to homeless people, flippers, and people 2 months out of bankruptcy with 100% loan to value at 6 percent is why we suddenly have chaos in the financial system.

Lets put it in these terms, for someone that drives a lot, $5 gas means you might pay $500 per month rather than $200 at $2 dollar gas. That is a $300 hit, but compare that to what happens when someone who is in a subprime mortgage for a $500k house has a rate adjustment after a 3 year fixed period from 5% to 10%. Thousands more mortgage hitting at once. That is basically the equivalent of suddenly having $18/gallon gas.

THAT, is why there is a slowdown. And it will take some time to adjust through the crappy mortgages to recover from it.

[NevadaJay]

Very good points, skins, fish.

Re: the mortgage mess. I for one am about personal responsibility and accountability. Those folks who had no business getting themselves into an ARM that was set to adjust and either didn't care or didn't bother to actually understand what they were signing are now having to pay the consequences. That's just a fact and they'll have to deal with it.

Thanks to all of these people, the middle class looking to buy a single family home are priced out of the market. I actually hope the market corrects another 30% or so downward. The run up was ridiculous.

I'm flabbergasted that more folks don't stand up and say that - all we hear now is how the government is going to step in and bail these people out. Why? Because they were either greedy (buy and flip mentality) or asleep at the wheel for not understanding what they were doing? I think that's garbage, and leave my taxes out of a bailout, please.

Life is all about choices....and then dealing with the consequences of those choices.

[homedawg]

Originally Posted by Skinsfan

In my opinion, we need $10 gas.

I am retired, and every time I go out, I run into "rush hour" type traffic. I am referring to late morning early afternoon times. Wtf I ask myself? Dont these people work? Are they retired too? Are they the people bitching about the fuel prices? Fuck that, get out of the SUV, get a hybrid, ride the bus, or plan ahead and get your goods for the week.
Everytime you fire that vehicle up, it burns fuel.
Stop making those useless trips for bread, milk, or whatever, stock up! Same goes when you buy gas, Fill it up!!! The more unecessary trips you make, the more fuel you will use!
Drive less, the price increase wont affect you, so you can stop Bitching!