Economy improving?

[Richard in Smithville]

I think we are slowely improving but with a lot of sideways motion. I work in a steel offshoot industry and our "trough's" are getting lesser and the peaks are getting longer and stonger.

[vaking]

Heavy government intervention succeeded at stopping further decline of the economy; economy had been stabilized. Unfortunately government intervention came at a cost - a lot of new money had been pumped into economy. The new money came from 2 sources - some money government borrowed and some it simply printed. Borrowed money added to our debt, printed money will cause inflation. During the recession there is no concern about inflation - companies would not raise prices when lots of people are out of work and cannot afford even current level of spending. Raising prices at such moment would cause products to sit unsold. But the moment economy starts picking up prices will go up because of inflation - that's what Tommyt noticed. This inflation is beginning to show up now and it will make recovery from the recession painfully slow. So the economy is improving but at a rate comparable to raising water level in oceans because of global warming.

[germdoc]

Originally Posted by Hoover

I have a degree in business economics, B.S. 1969. The economy is moving sideways, the stimulus package has not yet released all its funds, but roadway repairs are picking up, and business construction has started to turn upward in the Puget Sound area. The job hiring is lagging, and probably be slower to get better until housing market gets rid of excess inventory. It will be a hard winter.

Interesting that the degree given in economics is a "BS"...

Things around here are picking up a little, about as many hirings as layoffs. A LOT of road construction between here and Chicago and here and Minneapolis, so some people have jobs!

[jackellis]

I read a lot of economic and financial news and the indicators seem to be headed up, if slowly. I just returned from a trip to Florida and three of the four flights (Reno-Chicago, Chicago-Ft. Lauderdale, Ft. Lauderdale-Las Vegas) were full.

We had ten years of abnormally fast growth fueled by cheap money. Now we have to grit our teeth and wait while conditions revert to the mean.

At least this wasn't a repeat of 1929.

[cwithboat]

After a severe dip last year my 401k has substantially improved, making me a little less edgy about spending money. If others (retired and living on SS with occasional dips into savings) are seeing the same thing, then improvement is here or near.

[cgallery]

Originally Posted by sparkeyjames

The commercial real estate market crash is still coming up.

This is interesting, and I think a lot of people are unaware of the fact that commercial real estate is refinanced every three to five years.

And commercial RE values have plummeted right along w/ residential.

Many have predicted that banks won't refinance many of these commercial properties, especially those that have taken large hits in market value.

But what is the alternative? A default, and the bank now owns a shopping mall or office building.

I have a feeling they're gonna write the paper. Doesn't mean they won't try to bend borrowers over (they will). But if I owned a shopping mall, my negotiating tactic would be: "Finance it or own it."

And if the cash flow wasn't there, I may just tell them, "you can go ahead and take it."

[docrowan]

Read an article in one of my trade magazines that had a great quote -

If you fall into a 10 foot deep hole and take a step up, you're still in a 9 foot hole.

[tseavoy]

I guess good news is that inflation is not happening -- my social security check will not increase due to increase in cost of living, even though we know food and fuel are still very volatile. Our 401 has been transferred to CD's which are not paying much, but at our age, we can't afford to gamble. In my home area in Upper Michigan (yes I am a Yooper, at least formerly) the county has the highest unemployment rate in the state. Terex pulled out, leaving 90 more unemployed.

I just don't know.

Tom on Marrowstone

[alpha]

You will know when the economy is improving simply by looking at 2 factors. One is consumer confidence, or when people start buying products at a higher rate than they were buying products. The second is when businesses start investing in their business again.

Companies lay off employees when their sales fall off. They hire when they have a demand for more products they can make. That is why employment is a trailing indicator.

Since more people are being laid off than being hired every week that would indicate to me that sales have not improved thus the economy continues in a downward spiral.

[drillman88]

Our work has flucuated pretty wildly at times because our customers are spending money when they absolutly have to. We have been steady lately but the customers are demanding unrealistic turn arounds due to putting the work off for so long. They are in dire straits by the time we get the job.

New home construction is at a standstill here and there are 5-6 homes for sale in my hood that have been on the market for 6-12 months. They generally sell in 1-3 months because of the location and condition of the houses.

Until the housing/real estate markets return our local economy is really going to sag.