Poll: The Bottom of this Recession

[Missourian]

How long do you believe this recession will last?

 

[Missourian]

If you believe it will be more than 4 years, feel free to vote We're Doomed and post your prediction.

 

[Neubarth]

The economy will recover eventually, but this fall is so sharp and steep (Is that redundant?) that I am afraid to buy into the stock market again. I am limited in what I can do because all my investment money is in a 401K that I can only switch between mutual funds. One buys treasuries and five buy stocks. I have been in treasuries for the past two years with only one day in stocks. That one day, I caught a Dead Cat bounce. My net return from the interest and the bounce has been 17% this year. I don't want to blow that by moving into stocks right now. I simply do not see a bottom in the coming year.

 

[Frolicking Dino]

I was torn between two years and three years... and I believe we may well see a full-on depression before it over.

 

[cunclusion]

I think our bottom will be longer than most others. It all depends on the value of our dollars if it stays stable then we should be ok but if it depreciates alot then we will be in trouble. Energy will shoot through the roof but hey thats just me rambling.

 

[NOBama]

3 years +

If we're lucky...

 

[Neubarth]

I think our bottom will be longer than most others. It all depends on the value of our dollars if it stays stable then we should be ok but if it depreciates alot then we will be in trouble. Energy will shoot through the roof but hey thats just me rambling.

We are the leading industrial country in the whole world. If the Dollar depreciates, THEN we will come out of a recession faster as our products will increase in sales around the world..

 

[Zoomie1980]

The economy will recover eventually, but this fall is so sharp and steep (Is that redundant?) that I am afraid to buy into the stock market again. I am limited in what I can do because all my investment money is in a 401K that I can only switch between mutual funds. One buys treasuries and five buy stocks. I have been in treasuries for the past two years with only one day in stocks. That one day, I caught a Dead Cat bounce. My net return from the interest and the bounce has been 17% this year. I don't want to blow that by moving into stocks right now. I simply do not see a bottom in the coming year.

Now's the time to be buying!!!!!! I gradually started switching my 401k 2 years months ago to treasuries and then last November starting moving an every higher percentage to stocks. Now almost 100% going into stocks and next month I am increasing my withholding to put even more.

Warren Buffet's CLASSIC adivice. Get scared when people are greedy, get greedy when people are scared. I am more "greedy" than any time since 1983....

 

[Zoomie1980]

I was torn between two years and three years... and I believe we may well see a full-on depression before it over.

I hope so....i will make a killing in a depression....

 

[Toro]

It will last until at least the second half of next year, perhaps into 2010.

 

[Zoomie1980]

How long do you believe this recession will last?

Realistically? The housing market was at the root of this latest bubble burst, so when housing has finally found it's REAL price and inventory stocks finally begin to go down, we will see the beginning of the end of it. A lot of things will start to free up then. But, unfortunately, we are in for another bout of inflation, mostly because more economic activity will wake up oil speculators and start running energy prices up again and all that money coming out of bank vaults has to go to buying something.... We'd best get some market limits in the oil market next year to keep runaway speculation at bay.... I'm banking on a good bit of that bailout money heading back into stocks, though, not oil and gold.

 

[Paulie]

You have to expect gold, at least. We're looking at close to 1 Trillion eventually hitting the street, besides foreign dollars that very well may come ashore.

Gold is a good play.

 

[Luissa]

Realistically? The housing market was at the root of this latest bubble burst, so when housing has finally found it's REAL price and inventory stocks finally begin to go down, we will see the beginning of the end of it. A lot of things will start to free up then. But, unfortunately, we are in for another bout of inflation, mostly because more economic activity will wake up oil speculators and start running energy prices up again and all that money coming out of bank vaults has to go to buying something.... We'd best get some market limits in the oil market next year to keep runaway speculation at bay.... I'm banking on a good bit of that bailout money heading back into stocks, though, not oil and gold.

One of the problems with the housing market is we built to many houses in the last five or so years and we have to many of them. I guess they should have gone back to high school ecnomics and learned about supply and demand!

 

[Annie]

I think perhaps the larger problem is the baby boomers are starting to retire in substantial numbers and heading for condos in warmer climates. There is also the past 10 years or so, when the 'Greatest Generation' really started selling or dying, with homes they could afford to sell way below the 'current value.' Then there was the building rage of the mini-mansions, at least in my area.

 

[Againsheila]

I'm just glad to see I'm the only one to vote "we're doomed". I prefer to be off my rocker rather than correct in this case.

 

[roomy]

I voted 2 years but that would be a minimum it may take a lot longer.House prices are in free fall which is bad for me because my small portfolio is my pension planHaving said that anyone who can afford it should buy while the market is bottoming out then watch their investment reach new highs.IMO.

 

[Skull Pilot]

The Economic News Isn't All Bleak - WSJ.com

The recent economic news has been dismal, and it's now almost universally assumed things will get worse before they get better. Conventional wisdom also dictates that this recession will be longer, deeper and cause more long-term pain than any financial crisis since the Great Depression.
[Commentary] Chad Crowe

Yet, less than two years ago, conventional wisdom dictated that the housing bubble would be painful but that global economic growth would remain stable. That assertion was proved dramatically incorrect. Why then is there so much conviction in today's forecasts of a dire future?

Predictions about the rate of unemployment by the end of 2009 are based on how high that rate went during and after other recessions, and how steep those recessions were compared to today. Forecasts of GDP growth are grounded in the nature of past contractions and how long it took the system to begin expanding again. But none of these past patterns are necessarily a useful guide to the circumstances of today. The way events have unfolded over the past few months simply has no precedent.

It's common to hear comparisons to the Great Depression, when economies around the globe shrank precipitously, or to the 1970s, when an oil shock gave way to steep contraction of GDP growth in the developed world and a concomitant collapse in energy prices. But those occurred over the course of years. What happened since the collapse of Lehman on Sept. 15 was a global, synchronous cessation of all but nondiscretionary economic activity in the wake of the near-collapse of global credit markets. And it happened over the course of weeks, not years. Data from October and November show shrinkage of 10%, 20% and often considerably more in corporate earnings, car sales, home prices, commodities and a host of other areas. But analysts and strategists now take this as the "new normal" and are projecting into 2009 and beyond as if it were.
The Opinion Journal Widget

Download Opinion Journal's widget and link to the most important editorials and op-eds of the day from your blog or Web page.

True, this global halt is the dark side of the information technologies and globalization that have created so much wealth and generated so much activity in the past 20 years. The frictionless, instantaneous flow of capital is possible only because of the Internet and electronic exchanges. The supply chain for industrial metals, from copper to iron ore, has gone from being regional and fragmented to global and unified. Semiconductors have become one global industry with pricing and inventories determined based on aggregate world-wide demand. Few industries are local, and almost everything is linked.

In good times, that meant credit expanded and activity magnified geometrically. China for one has undergone more transformation in 20 years than most countries have seen in 100. But when the system was infected with toxic assets, the effects spread everywhere and fast. The collapse of Lehman led to fewer cars being sold in China in a matter of weeks, and the decline of Dubai real-estate prices to boot.

And yet, if things came to a halt more quickly than ever before, they could also restart more quickly than ever before. This is not to say they will, only that the possibility is more than marginal. And there are signs things are not everywhere as bad as conventional wisdom suggests.

First, we haven't seen war, revolution, the collapse of states and governments or massive demonstrations sweeping the globe. Crowds have demonstrated in China, Greece and Thailand -- for reasons sometimes related to the economic crunch and sometimes not. Pakistan is teetering for multiple reasons -- of which economics is only one. But major economic crises in the 20th century almost always led to those types of major breaks, especially during the 1930s. While no one can say whether they will come in the months ahead, for the time being we should be remarking on how relatively stable things are in light of what has happened.

Second, consumers in many parts of the world are in relatively good shape. That statement might strike many as absurd, given the mantra of "consumers have been living beyond their means." But it's not just the third of American households that have no mortgage, or the 50% savings rate in China, or the still massive wealth accumulation in the Gulf region, Brazil and Russia. It's that the credit system, even at its most promiscuous, didn't allow consumers to take on the obscene leverage that financial institutions did. Millions of people who shouldn't have been lent money were, either in mortgages or through credit cards. But they couldn't be levered 40-to-1 as investment banks and funds were.

People have also reacted swiftly to the current problems, paying down debt and paring back purchases out of prudence or necessity. That's a short-term drag on economic activity, but it will leave consumer balance sheets in good shape going forward. Low energy prices and zero inflation will boost spending power. Even if unemployment reaches 9% or more, consumer reserves in the U.S. and world-wide are deeper than commentary would suggest. Household net worth in the U.S. is down from its highs but is still about $45 trillion. As the credit system eases, historically low interest rates also augur debt refinancing and constructive access to credit for those with good histories and for small business creation in the year ahead. Entrepreneurs often thrive when the system is cracking.

In addition, corporations generally have very clean balance sheets with little debt and lots of cash, unlike the downturns in 2002 and in the 1980s. And government has more creative ways to spend, which both the current Federal Reserve and the incoming Obama administration intend to do.

The last months of 2008 will go down as one of the most severe economic reversals to date, and on a global scale. But it is foolish to assume that this period provides a viable guide to what lies ahead.

The rush to declare the future bleak has obscured the fact that no one knows the outcome of an unprecedented event. No one. The worst course in the face of uncertainty is blind faith in conventional wisdom and past patterns. The best is to stay humble in the face of the unknown, creative and unideological about solutions, and open to the possibility that as quickly as things turned sour they can reverse.

 

[editec]

The rush to declare the future bleak has obscured the fact that no one knows the outcome of an unprecedented event. No one. The worst course in the face of uncertainty is blind faith in conventional wisdom and past patterns. The best is to stay humble in the face of the unknown, creative and unideological about solutions, and open to the possibility that as quickly as things turned sour they can reverse.

Yeah, there you go.

The above is, I think, the wisest thing anyone has posted on this topic

Nobody really knows what the economy will be doing because this economy is unlike any other economy we have ever had.

Some people will predict correctly (either up or down, doesn't matter) and they'll be hailed as economic genuses, naturally.

But if we haven't learned yet that NOBODY is an economic genius, then I guess we're never learn that.

What will the market do?

Well, who cares, if you're not a player in the market?

The stock market is NOT the American economy.

The stock market was booming even while most Americans were under water.

What I want to know is not what the economy will do, since the way they measure the "health" of the economy doesn't seem to bear any relationship to how we;ll the American people are doing.

So what I want o know is when does the quality of life for most Americans stop going DOWN?

I'm looking at 40 years of decline in the quality of life for most Americans and counting.

So in the editecian school of economics most of America has been in a depression for the 40 years.

 

[Paulie]

The Economic News Isn't All Bleak - WSJ.com

The recent economic news has been dismal, and it's now almost universally assumed things will get worse before they get better. Conventional wisdom also dictates that this recession will be longer, deeper and cause more long-term pain than any financial crisis since the Great Depression.
[Commentary] Chad Crowe

Yet, less than two years ago, conventional wisdom dictated that the housing bubble would be painful but that global economic growth would remain stable. That assertion was proved dramatically incorrect. Why then is there so much conviction in today's forecasts of a dire future?

Predictions about the rate of unemployment by the end of 2009 are based on how high that rate went during and after other recessions, and how steep those recessions were compared to today. Forecasts of GDP growth are grounded in the nature of past contractions and how long it took the system to begin expanding again. But none of these past patterns are necessarily a useful guide to the circumstances of today. The way events have unfolded over the past few months simply has no precedent.

It's common to hear comparisons to the Great Depression, when economies around the globe shrank precipitously, or to the 1970s, when an oil shock gave way to steep contraction of GDP growth in the developed world and a concomitant collapse in energy prices. But those occurred over the course of years. What happened since the collapse of Lehman on Sept. 15 was a global, synchronous cessation of all but nondiscretionary economic activity in the wake of the near-collapse of global credit markets. And it happened over the course of weeks, not years. Data from October and November show shrinkage of 10%, 20% and often considerably more in corporate earnings, car sales, home prices, commodities and a host of other areas. But analysts and strategists now take this as the "new normal" and are projecting into 2009 and beyond as if it were.
The Opinion Journal Widget

Download Opinion Journal's widget and link to the most important editorials and op-eds of the day from your blog or Web page.

True, this global halt is the dark side of the information technologies and globalization that have created so much wealth and generated so much activity in the past 20 years. The frictionless, instantaneous flow of capital is possible only because of the Internet and electronic exchanges. The supply chain for industrial metals, from copper to iron ore, has gone from being regional and fragmented to global and unified. Semiconductors have become one global industry with pricing and inventories determined based on aggregate world-wide demand. Few industries are local, and almost everything is linked.

In good times, that meant credit expanded and activity magnified geometrically. China for one has undergone more transformation in 20 years than most countries have seen in 100. But when the system was infected with toxic assets, the effects spread everywhere and fast. The collapse of Lehman led to fewer cars being sold in China in a matter of weeks, and the decline of Dubai real-estate prices to boot.

And yet, if things came to a halt more quickly than ever before, they could also restart more quickly than ever before. This is not to say they will, only that the possibility is more than marginal. And there are signs things are not everywhere as bad as conventional wisdom suggests.

First, we haven't seen war, revolution, the collapse of states and governments or massive demonstrations sweeping the globe. Crowds have demonstrated in China, Greece and Thailand -- for reasons sometimes related to the economic crunch and sometimes not. Pakistan is teetering for multiple reasons -- of which economics is only one. But major economic crises in the 20th century almost always led to those types of major breaks, especially during the 1930s. While no one can say whether they will come in the months ahead, for the time being we should be remarking on how relatively stable things are in light of what has happened.

Second, consumers in many parts of the world are in relatively good shape. That statement might strike many as absurd, given the mantra of "consumers have been living beyond their means." But it's not just the third of American households that have no mortgage, or the 50% savings rate in China, or the still massive wealth accumulation in the Gulf region, Brazil and Russia. It's that the credit system, even at its most promiscuous, didn't allow consumers to take on the obscene leverage that financial institutions did. Millions of people who shouldn't have been lent money were, either in mortgages or through credit cards. But they couldn't be levered 40-to-1 as investment banks and funds were.

People have also reacted swiftly to the current problems, paying down debt and paring back purchases out of prudence or necessity. That's a short-term drag on economic activity, but it will leave consumer balance sheets in good shape going forward. Low energy prices and zero inflation will boost spending power. Even if unemployment reaches 9% or more, consumer reserves in the U.S. and world-wide are deeper than commentary would suggest. Household net worth in the U.S. is down from its highs but is still about $45 trillion. As the credit system eases, historically low interest rates also augur debt refinancing and constructive access to credit for those with good histories and for small business creation in the year ahead. Entrepreneurs often thrive when the system is cracking.

In addition, corporations generally have very clean balance sheets with little debt and lots of cash, unlike the downturns in 2002 and in the 1980s. And government has more creative ways to spend, which both the current Federal Reserve and the incoming Obama administration intend to do.

The last months of 2008 will go down as one of the most severe economic reversals to date, and on a global scale. But it is foolish to assume that this period provides a viable guide to what lies ahead.

The rush to declare the future bleak has obscured the fact that no one knows the outcome of an unprecedented event. No one. The worst course in the face of uncertainty is blind faith in conventional wisdom and past patterns. The best is to stay humble in the face of the unknown, creative and unideological about solutions, and open to the possibility that as quickly as things turned sour they can reverse.

There's enormous obstacles that we need to overcome, mostly political. Unless our economic policy shifts to real fiscal responsibility, we'll never really be on the path to TRUE recovery. We might continue to have the 5/10 year boom/bust cycles, but those aren't exactly healthy for us. They're literally KILLING the middle class. Only the ones with a lot of money can really profit from these cycles. Everyone else loses more and more each time.

Right now is our opportunity. We're re-living the humble lifestyle again. We're once again realizing what it means to be responsible with our money. The problem is, we never learn from it because the first chance we get to blow some extra dough, we buy CRAP. If we can become savers again, and STICK to it, we have a chance. If we take the next bout of inflation (and it IS COMING) and burn the extra dough on bullshit, we're going to screw ourselves.

I'm not saying it's ALL we need to do, but there's so much we can learn from this currect crisis.

 

[Neubarth]

Any conflict could spook the market to new lows. Pray for global peace.