Roubini predicted the current mess more accurately than anybody

[I have WHAT in my yard?]

Out there. This is his current prediction.

http://www.forbes.com/2008/11/12/recession-global-economy-oped-cx_nr_1113roubini_print.html

Seems dire, but not the end of the world....... just the end of the world as we know it.

 

[DuckyBoys]

Time to get creative people...gotta buckle down and do your best.

 

[Sequin]

Interesting read. However this is what I learned "the recession will get worse before getting better and it will effect everyone". Ummm, am I the only one thinking "I could've told you that." ??? It seemed, to me, to be repetitive and written over and over in different ways. By the time I got to the end of the article I was going "ok, you already said that in the previous paragraphs."

My take? If people concentrate on supporting local businesses, ignore the bulk of the 'doom and gloom' media, and work/spend smart, then everything will work out fine. We are quite a materialistic country in general, and there are many things we have come to consider Needs when they really are luxuries. Humans can actually survive, and even be Happy, with much less than what most of us have. We just don't Want to. Doing with less and budgeting and all that to make a go of it - look what good it does us? We get creative about making our dollar go further, we cook at home and are with our families more, what is so bad about that? We turn off the t.v. we save the planet by using less gas, less electricity, less packaged goods, is that so horrible?

There is always a bright side, and a positive way of looking at things. If you allow yourself to get spooked by this media hype about how everything is crashing down around our ears then it Will seem pretty awful. But if you shrug at it and look for ways to improve your family and daily living I think you will find a greater happiness. And to me, happiness doesn't sound all that horrible. Look at the birds in the field, and the flowers growing, - they don't have a fraction of what we have, and yet they live and are beautiful and wouldn't you even say 'happy'? There is a lesson to be learned there.

Sorry if I got carried away. I just don't think the whole recession bit is as bad as people make it out to be. Why not be content with the things you have, and even with less if need be? Sorry, but that is how I look at this whole issue.

 

[I have WHAT in my yard?]

I agree with you sequin. What's torquing my panties are the people who keep insisting that the worst is over and we should all run out and shop shop shop!

We needed to have this contraction and we American's need to learn how to save and live within our means again. So I say bring on the harbingers of doom if they'll scare a few high flyers into living more like many BYCers do!

 

[birdnutz]

I don't think it's us that you need to convince. The government needs to read BYC. They're the main ones that seem to have borrowing and spending issues.

 

[Rosalind]

I don't think I believe any economists anymore. They're all making it up as they go along. Agree it seems likely we have not hit bottom yet and probably won't for a few years.

The mathematics economists do to model the economy and make all their predictions are, quite frankly, a joke. Scientists and engineers have long abandoned such simplistic ideas in favor of Bayesian modeling, which accounts for things you might not know about and can explain feedback loops and generalized risk. When the economic models that led to the current mess were explained to a community of scientists (I subscribe to one of their publications), we reacted in horrified bemusement. Their ideas of who is really running the economy and who gets paid how much are apparently derived from Fantasy-Land. Just this week, they had a Harvard economist on NPR saying something similar about not yet hitting bottom, and he got all het up about the notion of taxing rich people, because he felt rich people make jobs with their money (despite mountains of evidence that in fact rich people put their money in Swiss bank accounts and move American jobs to Ecuador or China). He thought that the term "rich people" should be replaced with "scientists, engineers, and other researchers who make the products we buy."

Can I just tell you guys, the average salary of most scientists is about $40,000. The vast majority of scientists are post-docs or industrial bench scientists. Engineers make about $60,000-100,000, depending on what type of engineering they do, chemical engineers making the most. Yes, you read that correctly--we make a lot of complicated, expensive products people buy, we build bridges and oil refineries and computers, and we make about 5% of what a Wall Street MBA makes, when the apparent function of a Wall Street MBA is to drink coffee and run the economy into the ground. Likewise, farmers who make the food we eat, water and sewage workers who keep us from dying of cholera, and textile workers who make the clothes we wear are drastically underpaid in relation to the economic importance of their work. Even doctors don't make all that much money, unless they happen to be neurosurgeons or CT surgeons--your GP or your kids' pediatrician probably makes considerably less than six figures. The people who make the big bucks are NOT the people who actually create new jobs or keep society fed, clothed, healthy and housed; they are the people who got MBAs and plush jobs from Daddy's connections.

The people who come up with new ideas and new products, the people who build the factories to make them, the people who make the factories more efficient, the people who make our world a better place to live, the people who grow our food and refine it and package it and ship it, the people who keep us healthy, the people who make the clothes on our backs, and even their managers who keep the factory running smoothly, the HR folks who hire and fire and keep the factory staffed, the people who run the retail store, the people who are, in fact, creating jobs, are not making six figures. The folks who are making the big bucks, the "rich" people who supposedly have a hand in creating these jobs, are punching numbers into an Excel spreadsheet that tells them they can move the factory to China, cut R&D by 10%, keep prices exactly the same as they were when the factory was in the US, and earn a $500,000 bonus. It bloody astounds me that American economists do not grasp this reality. I know Indian and Chinese economists understand it full well, as they have witnessed the enormous growth in their manufacturing sectors and know exactly whence it comes.

Moreover, I have heard, honestly, the following notions from Ivy League economists, sometimes in the same darn breath:

"The market is efficient, things are worth whatever someone is willing to pay for them...and we think prices are below their actual value as goods." Translation: Up is down, except when we say it's not.

"Inflation is good, but deflation is bad." Price corrections are price corrections, they will always be bad for some people and good for some people. The only difference is, which people.

"Prices always reflect what the market can sustain...except in the case of consumer goods where the prices are set by the retailer and usually never go down once they've gone up." Why is retail a special case? Answer: It's not, but economists don't do purchasing as part of their job description, so they don't know any better.

I'm convinced that ignoring everything economists say and simply giving out mandatory Ativan for all overwrought stock traders will go a long way towards stabilizing the market.

 

[Rhett&SarahsMom]

actually. A friend of mine was saying that we were "in for a rough ride" nearly 4 years ago. All it takes is keeping your eyes open and watching what is happening in your own city/town/area. I saw it all coming the end of 2000. 9/11 accelerated it.
It was all the rose colored glasses wearing folks that kept on buying on credit and spending more than they had coming in. I watched, listened and made changes. I suggested that my fmaily make changes. we all did.

I believe that things will get better, but that we have a LONG road ahead of us. I do not think that it will be "fixed" in one term of a new President. There is just no way that is going to happen. but so many people are not going to get that. And those are the people that scare me the most. well them and the ones that are still out there living like there is no tomorrow and listening to the crap on the TVs.
one local station here did a special report on how the $$ of trucks and large SUVs was down. And since gas prices are lower, then why not go out and get a BIG truck if you want it. I can tell you why. because fuel is not always going to be this low. It is going to go up again. and seriously. I dont know of too many people in my area that NEED a large SUV or a new pick up truck. so many people are loosing thier jobs. And so many more are in danger of loosing their jobs. even if they dont see it right now. Those rose colored glasses seem to be flying off the shelves still.

 

[I have WHAT in my yard?]

That's what is getting me! I was talking to a professor of economics he other day and I was simply baffled by her world view. All economists who cling to the belief that the "market" is logical are delusional. Anyone who has ever stood on the floor of the NYSE can SE and HEAR the overwhelming emotion involved.

I was one of the people that actually published a treatise four years ago saying the economy was based on nothing and was bound to fail and fail hard. I **** near lost my job. People kept telling me that i didn't "really understand" economics. I said perhaps I don't understand economics, but I do understand math!

But, I worry about the fact that the there are still so many rose colored glasses and so much of the future is being borrowed to prevent the pain we should be experiencing now!

 

[Sequin]

Just a random idea, but maybe we should get rid of money altogether and do like they used to do long long ago - work and trade. You help me build my house, I will help clothe your family... etc etc. Why not? I think that would build much more character - if nothing else.

Plus it would do away with who is rich and who is poor.

 

[CarriBrown]

Quote:
Sorry. I believe in Capitalism.
Why on earth would you want to get rid of the rich, middle class, and poor? You get what you put in and that's fair to me. Take opportunity away from people and give them everything and they lose their drive to become better. "Better" is a personal thing. Some people are happy with less, others with more. But to take away someone's drive to become rich or successful (whatever that is to you personally) is just plain stupid.