Once in a lifetime
August 19, 2008 7:02 PM Subscribe
And you may find yourself behind the wheel of a large automobile | And you may find yourself in a beautiful house, with a beautiful wife | And you may ask yourself... Well...How did I get here?
On the other hand, it is a good survey of all of the different graphing software available.
posted by tkolar at 7:15 PM on August 19, 2008 [8 favorites]
posted by tkolar at 7:15 PM on August 19, 2008 [8 favorites]
Pile onto the gloom wagon, everybody, it's where we were headed anyway. If anyone is going the other direction, he must be wrong.
But then I'm one of those jerks with almost no debt. The house is owned free and clear and so are the cars, and the kid's through college. So I can thumb my nose at the panic. But really, it seems almost as silly to me as the way people kept insisting that real estate would always appreciate in value.
posted by Peach at 7:20 PM on August 19, 2008
But then I'm one of those jerks with almost no debt. The house is owned free and clear and so are the cars, and the kid's through college. So I can thumb my nose at the panic. But really, it seems almost as silly to me as the way people kept insisting that real estate would always appreciate in value.
posted by Peach at 7:20 PM on August 19, 2008
People haven't started to live forever yet, have they?
*whew*. Job security.
posted by ColdChef at 7:21 PM on August 19, 2008 [22 favorites]
*whew*. Job security.
posted by ColdChef at 7:21 PM on August 19, 2008 [22 favorites]
Oh my God. The world is ending. Again. I meant it this time, dammit.
Whatever.
The problem with this kind of article is that I'm just not a "6,000 sq ft McMansion buying, BMW leasing, $5 Starbucks latte drinking, granite countertop upgrading, home equity borrowing" consumer, so it's hard to get all worked up about this. In the past few years I've been paying down debt and increasing savings.
posted by Doohickie at 7:23 PM on August 19, 2008
Whatever.
The problem with this kind of article is that I'm just not a "6,000 sq ft McMansion buying, BMW leasing, $5 Starbucks latte drinking, granite countertop upgrading, home equity borrowing" consumer, so it's hard to get all worked up about this. In the past few years I've been paying down debt and increasing savings.
posted by Doohickie at 7:23 PM on August 19, 2008
I enjoy doom and gloom as much as the next person, but this article seems like a random compilation of the scariest factoids the author could find, crammed and ranted together for maximum bugbearishness.
The horrific grammar, mangled syntax and misspelled words complete the effect. Not to mention comical editorializing such as:
"By 2005 practically everyone had a large automobile and a beautiful house."
or
"I have been accused by many of my friends and family as someone who sees the glass as half empty. I disagree with their assessment. I see the glass as it is."
or
"In the true spirit of Winston Churchill, President Bush could have paraphrased Churchill by saying: I have nothing to offer but tax cuts, tax rebates, 0% auto financing, and no-doc mortgages."
Yes, much of what was so spirited about Winston Churchill was encapsulated in his penchant for self-paraphrasing!
posted by Dee Xtrovert at 7:24 PM on August 19, 2008 [11 favorites]
The horrific grammar, mangled syntax and misspelled words complete the effect. Not to mention comical editorializing such as:
"By 2005 practically everyone had a large automobile and a beautiful house."
or
"I have been accused by many of my friends and family as someone who sees the glass as half empty. I disagree with their assessment. I see the glass as it is."
or
"In the true spirit of Winston Churchill, President Bush could have paraphrased Churchill by saying: I have nothing to offer but tax cuts, tax rebates, 0% auto financing, and no-doc mortgages."
Yes, much of what was so spirited about Winston Churchill was encapsulated in his penchant for self-paraphrasing!
posted by Dee Xtrovert at 7:24 PM on August 19, 2008 [11 favorites]
In the "job security" vein as well, I have been getting a significant amount of my business in the last year from my friends and peer group.
I do estate planning and probate law. Amazingly enough, no matter how bad things get, people keep getting older and dieing.
posted by yhbc at 7:27 PM on August 19, 2008
I do estate planning and probate law. Amazingly enough, no matter how bad things get, people keep getting older and dieing.
posted by yhbc at 7:27 PM on August 19, 2008
Hey I have a nice house and a beautiful wife, and an '86 Buick–I guess I'm safe?
posted by Mister_A at 7:29 PM on August 19, 2008
posted by Mister_A at 7:29 PM on August 19, 2008
The horrific grammar, mangled syntax and misspelled words complete the effect
That's the first thing I noticed. I read a couple of dozen financial blogs daily, and though the message here is not all that different than the ones you can read pretty much everywhere else these days, and is a message worth paying attention to, this particular piece is really badly written, and the clumsiness of is distracting and offputting.
posted by stavrosthewonderchicken at 7:35 PM on August 19, 2008
That's the first thing I noticed. I read a couple of dozen financial blogs daily, and though the message here is not all that different than the ones you can read pretty much everywhere else these days, and is a message worth paying attention to, this particular piece is really badly written, and the clumsiness of is distracting and offputting.
posted by stavrosthewonderchicken at 7:35 PM on August 19, 2008
That said, it's nice to see grand-sweep overviews, or attempts at them, at least. The technical minutiae in the daily blogs can sometimes get a bit bewildering to dilettantes like me.
posted by stavrosthewonderchicken at 7:38 PM on August 19, 2008
posted by stavrosthewonderchicken at 7:38 PM on August 19, 2008
I don't want to pile on, except to note that how weird it is to assume that the world is coming to end as a result of road-to-hell behaviors which were themselves quick adaptations to new conditions, and then not to assume that the new challenges will meet quick and most likely successful adaptation.
posted by MattD at 7:38 PM on August 19, 2008 [4 favorites]
posted by MattD at 7:38 PM on August 19, 2008 [4 favorites]
SLOE
posted by LogicalDash at 7:45 PM on August 19, 2008 [1 favorite]
posted by LogicalDash at 7:45 PM on August 19, 2008 [1 favorite]
Dammit. DYING. Likewise, there is only one "e" in "judgment".
posted by yhbc at 7:49 PM on August 19, 2008
posted by yhbc at 7:49 PM on August 19, 2008
Oddly, I've recently had the exact opposite problem. I have, by choice, carried zero credit and zero debt for years, and now I'm treated like an unperson by banks and lenders.
I understand that having zero credit is worse than having bad credit, and I understand why, but it chaps my ass to no end that not owing my soul to crushing consumer debt makes me a financial pariah.
posted by lekvar at 7:51 PM on August 19, 2008 [4 favorites]
I understand that having zero credit is worse than having bad credit, and I understand why, but it chaps my ass to no end that not owing my soul to crushing consumer debt makes me a financial pariah.
posted by lekvar at 7:51 PM on August 19, 2008 [4 favorites]
I can't even get upset anymore...I think I'm going to go shopping.
posted by The Light Fantastic at 7:52 PM on August 19, 2008 [1 favorite]
posted by The Light Fantastic at 7:52 PM on August 19, 2008 [1 favorite]
It's interesting to see the response here and contrast it to the way my neighbours, friends, and family are being impacted by the downturn.
posted by batmonkey at 7:56 PM on August 19, 2008 [1 favorite]
posted by batmonkey at 7:56 PM on August 19, 2008 [1 favorite]
A+ for this not being another article about some fey little side project from the insufferable David Byrne.
posted by decoherence at 8:00 PM on August 19, 2008 [3 favorites]
posted by decoherence at 8:00 PM on August 19, 2008 [3 favorites]
It's interesting to see the response here and contrast it to the way my neighbours, friends, and family are being impacted by the downturn.
Yeah, but the fact that you refer to it as a downturn instead of as an "economic apocalypse that will lead to world wide ruin and destruction" puts you pretty much in the same camp as everyone here.
I don't think anyone denies that people are hurting; It's the overblown panic of the article that people seem to be responding to.
posted by tkolar at 8:04 PM on August 19, 2008
Yeah, but the fact that you refer to it as a downturn instead of as an "economic apocalypse that will lead to world wide ruin and destruction" puts you pretty much in the same camp as everyone here.
I don't think anyone denies that people are hurting; It's the overblown panic of the article that people seem to be responding to.
posted by tkolar at 8:04 PM on August 19, 2008
And another thing - this is a US downturn, not a world one. Most people in most developed or rapidly developing countries are doing materially just fine thanks.
posted by wilful at 8:16 PM on August 19, 2008 [2 favorites]
posted by wilful at 8:16 PM on August 19, 2008 [2 favorites]
Does anyone know if those household savings rates for Germany and France hold up across other European countries?
That's a fascinating counterpoint to the sometimes argument about socialist Europe having higher unemployment and lower earnings...
posted by weston at 8:18 PM on August 19, 2008
That's a fascinating counterpoint to the sometimes argument about socialist Europe having higher unemployment and lower earnings...
posted by weston at 8:18 PM on August 19, 2008
I do have a beautiful wife, but I have a Prius, a moderately-sized house with 8 years left on a 15-year mortgage, no credit card debt, and save ~700/month. Also a very secure job with the government.
So yeah, where's the Talking Heads goodness?
posted by Huck500 at 8:19 PM on August 19, 2008 [1 favorite]
So yeah, where's the Talking Heads goodness?
posted by Huck500 at 8:19 PM on August 19, 2008 [1 favorite]
I understand that having zero credit is worse than having bad credit, and I understand why, but it chaps my ass to no end that not owing my soul to crushing consumer debt makes me a financial pariah.
You don't have to owe your soul to crushing consumer debt to get money from a bank. You just need to have it available and use it wisely. I spend very little on automobiles and only use my credit card for gasoline, some online purchases and vacations. My bill almost never climbs above $300 and yet I was able to walk into a bank and procure a zero-down fixed rate mortgage with no mortgage insurance at a reasonable rate in the midst of this ridiculous economic climate.
posted by TrialByMedia at 8:21 PM on August 19, 2008
You don't have to owe your soul to crushing consumer debt to get money from a bank. You just need to have it available and use it wisely. I spend very little on automobiles and only use my credit card for gasoline, some online purchases and vacations. My bill almost never climbs above $300 and yet I was able to walk into a bank and procure a zero-down fixed rate mortgage with no mortgage insurance at a reasonable rate in the midst of this ridiculous economic climate.
posted by TrialByMedia at 8:21 PM on August 19, 2008
I am a pedant of the first water, so it surprises me to hear complaints of "horrific grammar, mangled syntax and misspelled words." To pick on only the last point, Microsoft Word's spellchecker complains about only McMansion and bizzaro. I might have been reading too quickly for content to pick up grammatical and syntactic points, but that would be a first for me.
As for the point that, "This article is not about me" (I'm just not a "6,000 sq ft McMansion buying, BMW leasing, $5 Starbucks latte drinking...), how about if we throw in the premise that financial markets and the economy have a large trend-following/herd mentality component? How about if we posit that the dire effects may not be confined to the deserving?
For example, a friend of mine has been living in Phoenix in a home she bought. She has little debt. Now she wants to move back east. How easy is that going to be if several homes on her nice street are under foreclosure?
Fiasco da Gama: I'll stick with the original. 2:04 goes out to you.
posted by A-Train at 8:23 PM on August 19, 2008 [1 favorite]
As for the point that, "This article is not about me" (I'm just not a "6,000 sq ft McMansion buying, BMW leasing, $5 Starbucks latte drinking...), how about if we throw in the premise that financial markets and the economy have a large trend-following/herd mentality component? How about if we posit that the dire effects may not be confined to the deserving?
For example, a friend of mine has been living in Phoenix in a home she bought. She has little debt. Now she wants to move back east. How easy is that going to be if several homes on her nice street are under foreclosure?
Fiasco da Gama: I'll stick with the original. 2:04 goes out to you.
posted by A-Train at 8:23 PM on August 19, 2008 [1 favorite]
Economic good times come and go. So do the bad times.
Things were looking really apocalyptic in the 70s when the steel mill that much of my family worked for was getting killed by Japanese steel. They figured out how to live by other means.
In the early 90s I was laid off 4 times in 5 years. I scrambled and found something else.
It's like MattD says above: new challenges will meet quick and most likely successful adaptation.
posted by Doohickie at 8:24 PM on August 19, 2008
Things were looking really apocalyptic in the 70s when the steel mill that much of my family worked for was getting killed by Japanese steel. They figured out how to live by other means.
In the early 90s I was laid off 4 times in 5 years. I scrambled and found something else.
It's like MattD says above: new challenges will meet quick and most likely successful adaptation.
posted by Doohickie at 8:24 PM on August 19, 2008
Life During Wartime.
Beautiful World. (see what i did there?)
posted by schyler523 at 8:29 PM on August 19, 2008
Beautiful World. (see what i did there?)
posted by schyler523 at 8:29 PM on August 19, 2008
I am a pedant of the first water, so it surprises me to hear complaints of "horrific grammar, mangled syntax and misspelled words
My complaint is that it was badly written, not that there were spelling or grammar mistakes (although there were plenty of those).
And another thing - this is a US downturn, not a world one. Most people in most developed or rapidly developing countries are doing materially just fine thanks.
I think you're wrong about that, at least partly. The housing market at least, is collapsing in many first world countries, for example. Here in Korea things are certainly coupled more strongly to China, and it's now Korea's #1 trading partner, but being an economy based largely on exports and much of those to the US, the effects of the ongoing American Shitstorm are certainly being felt. It's complicated as all hell, though, and the second and third-order provenance of those effects can be pretty hard to trace. For me, at least.
Housing, though: that's not in much trouble here in Korea, at least in part because of the difference in mortgage systems, the tightening of credit regulations a few years ago, and the extremely high savings rate (on the order of 30% or more of net income for many), among many other factors. That said, the Manhattan (at least in terms of real estate) of Korea, Gangnam district in Seoul, and to a lesser extent Seoul in general, has seen real estate prices skyrocket, and just now are starting to turn. An easing rather than a crash seems pretty certain, though, and it's more a matter of timing coincidence than anything causal in terms of America's (and the UK's and Spain's and Australia's and...) real estate woes.
posted by stavrosthewonderchicken at 8:35 PM on August 19, 2008
My complaint is that it was badly written, not that there were spelling or grammar mistakes (although there were plenty of those).
And another thing - this is a US downturn, not a world one. Most people in most developed or rapidly developing countries are doing materially just fine thanks.
I think you're wrong about that, at least partly. The housing market at least, is collapsing in many first world countries, for example. Here in Korea things are certainly coupled more strongly to China, and it's now Korea's #1 trading partner, but being an economy based largely on exports and much of those to the US, the effects of the ongoing American Shitstorm are certainly being felt. It's complicated as all hell, though, and the second and third-order provenance of those effects can be pretty hard to trace. For me, at least.
Housing, though: that's not in much trouble here in Korea, at least in part because of the difference in mortgage systems, the tightening of credit regulations a few years ago, and the extremely high savings rate (on the order of 30% or more of net income for many), among many other factors. That said, the Manhattan (at least in terms of real estate) of Korea, Gangnam district in Seoul, and to a lesser extent Seoul in general, has seen real estate prices skyrocket, and just now are starting to turn. An easing rather than a crash seems pretty certain, though, and it's more a matter of timing coincidence than anything causal in terms of America's (and the UK's and Spain's and Australia's and...) real estate woes.
posted by stavrosthewonderchicken at 8:35 PM on August 19, 2008
My commas have been all fucked up the last few days. I think I've been saving them for a rainy day, and now they're spilling out of the goddamn cabinets. Sorry.
posted by stavrosthewonderchicken at 8:37 PM on August 19, 2008 [1 favorite]
posted by stavrosthewonderchicken at 8:37 PM on August 19, 2008 [1 favorite]
The savings rate in the UK is pretty crappy. In addition, the UK (and I believe France, Germany, Spain, and Italy) have some of the highest debt/capita rates (which rival, if not top the US rate). Wikipedia has some clarifications here, but if you don't trust that source, a quick google will find it. It's fairly well known that a combination of a shrinking population, stagnant productivity, and increasing debt is affecting most of Western Europe, which is partially why they've been in such a rush (and in such a predicament) about adding Eastern European countries to the euro system. Economically a good idea; politically a landmine.
I agree that "seekingalpha" is full of fundies, so this doesn't really add to the debate (of whether everything is going to hell), but for those who are just writing it off as just a bunch of nutcases who're trying to make money in gold and silver, there are some very, very intelligent people (asset managers, economists, CEOs, etc.) who are all saying the same thing: that this is very, very bad. And for those who cleverly think that because they have no debt that they'll escape, think again. Your retirement is in investments that are losing money, and if the predictions are true, no place is safe (not America, not Europe, not Asia) because the entire world is so tightly intertwined, that when the puppetmaster goes down (the US), the entire world will follow. The mistake people made last Fall was thinking the world was decoupled. Now the world index, the european index, chinese, indian, brazilian, and russian indexes are ALL down 20%. Think you can put your money in dollars and stuff it under your mattress? Think again. Think that your job is safe? Think again. Unemployment is creeping, and as businesses realize that this recession is going to take a few years to really get through the system, the real layoffs will begin.
It's not as simple as saying, "This is someone else's problem." That's not what this recession is all about. When banks fail, EVERYONE fails. Banks create money, and when they stop, money stops moving around. The only thing that keeps wealthy people wealthy is knowing that money is still being shuffled around, and that their pieces of paper are still good. When banks seize, and money stops shuffling around, everyone gets scared, and holds onto those dollars for dear life. And holding onto those dollars kills the economy faster than a speeding bullet. Ask Japan for most of the 90s. Or the US for most of the 30s. And Japan in the 90s was a modern, industrially sound, strong economy, whose risk models went out of whack, just like ours.
posted by SeizeTheDay at 8:38 PM on August 19, 2008
I agree that "seekingalpha" is full of fundies, so this doesn't really add to the debate (of whether everything is going to hell), but for those who are just writing it off as just a bunch of nutcases who're trying to make money in gold and silver, there are some very, very intelligent people (asset managers, economists, CEOs, etc.) who are all saying the same thing: that this is very, very bad. And for those who cleverly think that because they have no debt that they'll escape, think again. Your retirement is in investments that are losing money, and if the predictions are true, no place is safe (not America, not Europe, not Asia) because the entire world is so tightly intertwined, that when the puppetmaster goes down (the US), the entire world will follow. The mistake people made last Fall was thinking the world was decoupled. Now the world index, the european index, chinese, indian, brazilian, and russian indexes are ALL down 20%. Think you can put your money in dollars and stuff it under your mattress? Think again. Think that your job is safe? Think again. Unemployment is creeping, and as businesses realize that this recession is going to take a few years to really get through the system, the real layoffs will begin.
It's not as simple as saying, "This is someone else's problem." That's not what this recession is all about. When banks fail, EVERYONE fails. Banks create money, and when they stop, money stops moving around. The only thing that keeps wealthy people wealthy is knowing that money is still being shuffled around, and that their pieces of paper are still good. When banks seize, and money stops shuffling around, everyone gets scared, and holds onto those dollars for dear life. And holding onto those dollars kills the economy faster than a speeding bullet. Ask Japan for most of the 90s. Or the US for most of the 30s. And Japan in the 90s was a modern, industrially sound, strong economy, whose risk models went out of whack, just like ours.
posted by SeizeTheDay at 8:38 PM on August 19, 2008
de nile is jes' a river
posted by infini at 8:47 PM on August 19, 2008 [1 favorite]
posted by infini at 8:47 PM on August 19, 2008 [1 favorite]
stavros, I understand you've been in Australia in the past, however you might need to update your info a bit - we're sitting fairly pretty. And an easing is just part of the cycle, nothing like the crash the OP is declaiming.
posted by wilful at 8:51 PM on August 19, 2008
posted by wilful at 8:51 PM on August 19, 2008
Doomfilter.
posted by Mr. President Dr. Steve Elvis America at 8:52 PM on August 19, 2008
posted by Mr. President Dr. Steve Elvis America at 8:52 PM on August 19, 2008
I don't pretend to know a damn thing about macro economics, but I have never been happier than right now to know that we own our house outright, and that I got the bankruptcy out of the way last year, and have no credit. I have no savings for a bank to fail while holding, so I'm really in the perfect position for this. All we need is food -- it'll take the tax assessors at least three years to kick us out & seize the place if we can't make property taxes, and I think I can hold them off by selling all my garbage on ebay, even if I were to become unemployable tomorrow. I'm actually glad that I "invested" in crap instead of mutual funds or something, back when I was earning good money 5 years ago. I think my geegaws are appreciating faster than most mortgage backed securities.
posted by Devils Rancher at 8:52 PM on August 19, 2008 [1 favorite]
posted by Devils Rancher at 8:52 PM on August 19, 2008 [1 favorite]
Would it be a total derail to bring up Born Under Punches?
posted by pasici at 8:57 PM on August 19, 2008
posted by pasici at 8:57 PM on August 19, 2008
It's really amazing when you think about it.
Say an office administrator makes 50K. She gets a no-money-down mortgage (she thinks its ok because it's 8% fixed) for 425K. She buys a house in 2003. By 2005 it's "worth" 550K so she takes out a home equity loan, because every week at the bank the advertisements makes the loan as appealing as the Mercedes SL500, the $3000 Hermes purse, the Escalade for her daughter because Lauren on the Hills wouldn't be caught dead in a Honda.
Most of her take home was spent on Whole Foods, mortgage, and gasoline, while the credit cards she autopays all her bills with online are maxed out at 60K each, she has 4, and holy fuck the house is now only "worth" 300K. Anna's gone to live with Daddy because he still has a little bit left on his Citicard.
There is a certain schadenfreude in all this, something to anchor the insulted barista or stiffed waitress. But maybe there's a word for the office administrator when she's alone, surrounded by artifacts and a life now emptied of meaning.
posted by plexi at 8:58 PM on August 19, 2008 [7 favorites]
Say an office administrator makes 50K. She gets a no-money-down mortgage (she thinks its ok because it's 8% fixed) for 425K. She buys a house in 2003. By 2005 it's "worth" 550K so she takes out a home equity loan, because every week at the bank the advertisements makes the loan as appealing as the Mercedes SL500, the $3000 Hermes purse, the Escalade for her daughter because Lauren on the Hills wouldn't be caught dead in a Honda.
Most of her take home was spent on Whole Foods, mortgage, and gasoline, while the credit cards she autopays all her bills with online are maxed out at 60K each, she has 4, and holy fuck the house is now only "worth" 300K. Anna's gone to live with Daddy because he still has a little bit left on his Citicard.
There is a certain schadenfreude in all this, something to anchor the insulted barista or stiffed waitress. But maybe there's a word for the office administrator when she's alone, surrounded by artifacts and a life now emptied of meaning.
posted by plexi at 8:58 PM on August 19, 2008 [7 favorites]
Another thing: I know everyone is all doom and gloom about the economy these days, but does anyone seriously believe that 10 years from now, things won't be pretty much as they are today, or a few years ago? I suppose some people do -- peak oilers and all that. IANAE, and perhaps I have irrational faith in the resiliency of the status quo, but I can't help but think that for most people, these sorts of "OH NOES END OF THE WORLD FINANCIAL CRISES!!!11" scares are in large part just things to read about in the papers and argue over on Metafilter. And everyone, deep down -- perhaps subconsciously -- knows that everything is going to work itself out in the end.
posted by decoherence at 9:00 PM on August 19, 2008
posted by decoherence at 9:00 PM on August 19, 2008
everything is going to work itself out in the end.
Or perhaps, the more things change, the more they stay the same.
posted by Hicksu at 9:08 PM on August 19, 2008
Or perhaps, the more things change, the more they stay the same.
posted by Hicksu at 9:08 PM on August 19, 2008
stavros, I understand you've been in Australia in the past, however you might need to update your info a bit - we're sitting fairly pretty.
Oh, I don't think Australia's in straits nearly as dire as some other 'western' economies, and I haven't paid much attention to prices there since I left 7 years back, but these things are relative, and there are some who disagree with you about how pretty you guys are sitting.
*shrug* Who knows for sure, though? We could just leave Australia off the pulled-out-of-my butt list I mentioned upthread, yeah? Replace it with Canada, which is just on the cusp of a major downturn in a whole host of its hottest RE markets (which I've been anticipating for three years or so, since it became clear what was in store in the US).
posted by stavrosthewonderchicken at 9:08 PM on August 19, 2008
Oh, I don't think Australia's in straits nearly as dire as some other 'western' economies, and I haven't paid much attention to prices there since I left 7 years back, but these things are relative, and there are some who disagree with you about how pretty you guys are sitting.
*shrug* Who knows for sure, though? We could just leave Australia off the pulled-out-of-my butt list I mentioned upthread, yeah? Replace it with Canada, which is just on the cusp of a major downturn in a whole host of its hottest RE markets (which I've been anticipating for three years or so, since it became clear what was in store in the US).
posted by stavrosthewonderchicken at 9:08 PM on August 19, 2008
everything is going to work itself out in the end
However, things can go to zero before they recover.
posted by unSane at 9:18 PM on August 19, 2008
However, things can go to zero before they recover.
posted by unSane at 9:18 PM on August 19, 2008
not to mention the fact that there's been an undeniable shift in the global economy unlike during any other downturn. will the status quo return? no, if only because the status quo itself has changed. a friend just flew in from beijing and all he can talk about is the optimistic confidence across the country. the entire landscape has changed, there never will be the 'status quo' again
posted by infini at 9:22 PM on August 19, 2008
posted by infini at 9:22 PM on August 19, 2008
And everyone, deep down -- perhaps subconsciously -- knows that everything is going to work itself out in the end.
That goes without saying. What's more, to "work out" usually means a return to status quo.
Historically, however, things occasionally don't work out to status quo. As much as people expect things to return to 'normal', I think a lot of us fantasize about being alive for the big change: A Once In A Lifetime event.
posted by tkolar at 9:35 PM on August 19, 2008
That goes without saying. What's more, to "work out" usually means a return to status quo.
Historically, however, things occasionally don't work out to status quo. As much as people expect things to return to 'normal', I think a lot of us fantasize about being alive for the big change: A Once In A Lifetime event.
posted by tkolar at 9:35 PM on August 19, 2008
I really question the basic premise of this post, but since enough people have already picked it apart in this thread, I think I may turn my attention to Stavros :)
First of all, three years is a long time to keep predicting a downturn. I doubt Canada is on the edge of a major downturn. In fact, I don't think you can even really make these assumption that there is one Canadian economy. Ontario may be suffering because no one wants to by GM or Ford automobiles, but Alberta is booming, and the Tar Sands seem to be supporting not only Alberta, but communities across Canada.
For example, in British Columbia, our forest sector has collapsed, due in part to the high Canadian dollar, export restrictions and a lack of demand for lumber (because of the American housing crisis). Four mills in the town of Mackenzie have closed in the past six months. In Prince George, a plywood mill burned to the ground and Canfor decided not to open it. Yet unemployment rose from 6% to perhaps 7% (and PG is also suffering from pine beetle and the forestry slowdown). If the same situation had occurred twenty years ago (and it did, minus pine beetle), unemployment would have rose to twenty percent.
It turns out that as soon as the mills closed down in Mackenzie, the worders were employed in the Tar Sands. The millwrights have no problems finding work in Fort Mac, and people are keeping their homes in places like Labrador and Mackenzie and simply commuting, for a month at a time, to Northern Alberta.
The booming market for other commodities means there is lots of jobs in mining, which, as a matter of government policy, is picking up the slack in British Columbia. High commodity prices have benefited Saskatchewan and Manitoba - both have robust service, mfg and technology sectors - where there is virtually no unemployment.
Borrowing rules in Canada are stricter than in the United States. Canada is not going to go through a housing meltdown. Sure, there has never been a better time to buy a house in the last five years, but it's not as though people are losing major amounts of equity. Housing prices have doubled in the past five years. What more do you want? It can be argued that there just isn't enough housing stock to go around in Canada, specifically in major urban centres where everyone wants to live. Housing prices still can be cheap in rural Canada, but there is a lot of money floating around that is buying up cheap property for summer homes - just ask anyone in the East Kootenays. Kelowna has the highest housing prices in North America. It's not just due to speculation and an overheated market - there is just not enough land (where people want to live) in most parts of Canada.
There may be some pain, but as long as penople need precious metals or food (or Canadian software products, or Blackberries, or hardware, or aircraft and trains), we should be fine.
But I wouldn't want to be a Grade 12 graduate trying to survive on the production line in Oshawa.
posted by KokuRyu at 9:49 PM on August 19, 2008 [2 favorites]
First of all, three years is a long time to keep predicting a downturn. I doubt Canada is on the edge of a major downturn. In fact, I don't think you can even really make these assumption that there is one Canadian economy. Ontario may be suffering because no one wants to by GM or Ford automobiles, but Alberta is booming, and the Tar Sands seem to be supporting not only Alberta, but communities across Canada.
For example, in British Columbia, our forest sector has collapsed, due in part to the high Canadian dollar, export restrictions and a lack of demand for lumber (because of the American housing crisis). Four mills in the town of Mackenzie have closed in the past six months. In Prince George, a plywood mill burned to the ground and Canfor decided not to open it. Yet unemployment rose from 6% to perhaps 7% (and PG is also suffering from pine beetle and the forestry slowdown). If the same situation had occurred twenty years ago (and it did, minus pine beetle), unemployment would have rose to twenty percent.
It turns out that as soon as the mills closed down in Mackenzie, the worders were employed in the Tar Sands. The millwrights have no problems finding work in Fort Mac, and people are keeping their homes in places like Labrador and Mackenzie and simply commuting, for a month at a time, to Northern Alberta.
The booming market for other commodities means there is lots of jobs in mining, which, as a matter of government policy, is picking up the slack in British Columbia. High commodity prices have benefited Saskatchewan and Manitoba - both have robust service, mfg and technology sectors - where there is virtually no unemployment.
Borrowing rules in Canada are stricter than in the United States. Canada is not going to go through a housing meltdown. Sure, there has never been a better time to buy a house in the last five years, but it's not as though people are losing major amounts of equity. Housing prices have doubled in the past five years. What more do you want? It can be argued that there just isn't enough housing stock to go around in Canada, specifically in major urban centres where everyone wants to live. Housing prices still can be cheap in rural Canada, but there is a lot of money floating around that is buying up cheap property for summer homes - just ask anyone in the East Kootenays. Kelowna has the highest housing prices in North America. It's not just due to speculation and an overheated market - there is just not enough land (where people want to live) in most parts of Canada.
There may be some pain, but as long as penople need precious metals or food (or Canadian software products, or Blackberries, or hardware, or aircraft and trains), we should be fine.
But I wouldn't want to be a Grade 12 graduate trying to survive on the production line in Oshawa.
posted by KokuRyu at 9:49 PM on August 19, 2008 [2 favorites]
Cassandra was not popular in Troy, either.
The American real estate bubble is simply one manifestation of the corrosive influence of world-wide debt-fueled economics. Imaginary wealth was created by borrowed money and the piper is now seeking payment in hard currency. The import of the FPP article is simply that. When the imaginary wealth disappears, as it is surely doing right now, there will be real pain for the folks who pretended they could have it all via HELOC and MasterCard. Life may take VISA, as the debt merchants assure us on TV, but only until the Gnomes of Zurich cut off the credit facility--and that is happening right now, in spades. No measure of "I'm allright, Jack-ism" will inoculate folks from the consequences of the collapse of the "no money down" economy, micro and macro.
I have seen this day of reckoning on the horizon. I didn't buy a McMansion. My mortgage is very small because I've been paying it off for 15 years. I never took a home equity loan. I carry no credit card balances. But I'm still going to be fucked as inflation--fueled by the US government's feckless spending on Mesopotamian conquest, inter alia--steals the value of my retirement savings. When the decision is made--as it surely is being made--to bail out those who stupidly contracted for McMansions they couldn't afford, the inflation will only increase the pain for grasshopper and ant alike.
posted by rdone at 10:29 PM on August 19, 2008 [2 favorites]
The American real estate bubble is simply one manifestation of the corrosive influence of world-wide debt-fueled economics. Imaginary wealth was created by borrowed money and the piper is now seeking payment in hard currency. The import of the FPP article is simply that. When the imaginary wealth disappears, as it is surely doing right now, there will be real pain for the folks who pretended they could have it all via HELOC and MasterCard. Life may take VISA, as the debt merchants assure us on TV, but only until the Gnomes of Zurich cut off the credit facility--and that is happening right now, in spades. No measure of "I'm allright, Jack-ism" will inoculate folks from the consequences of the collapse of the "no money down" economy, micro and macro.
I have seen this day of reckoning on the horizon. I didn't buy a McMansion. My mortgage is very small because I've been paying it off for 15 years. I never took a home equity loan. I carry no credit card balances. But I'm still going to be fucked as inflation--fueled by the US government's feckless spending on Mesopotamian conquest, inter alia--steals the value of my retirement savings. When the decision is made--as it surely is being made--to bail out those who stupidly contracted for McMansions they couldn't afford, the inflation will only increase the pain for grasshopper and ant alike.
posted by rdone at 10:29 PM on August 19, 2008 [2 favorites]
First of all, three years is a long time to keep predicting a downturn.
Why on earth would you say that? In 2005, I was suggesting that the real estate tide would turn in markets like Vancouver and the even frothier markets in Alberta in 2008 or 2009, with a bottom in 2010 or 2011. In 2006, I was saying the same thing. In 2007, same. This year, same. My expectations were never about 'next week'. Real estate moves slowly, and although only fools like me make predictions, only greater fools make short-term predictions in the RE market.
I doubt Canada is on the edge of a major downturn. In fact, I don't think you can even really make these assumption that there is one Canadian economy. Ontario may be suffering because no one wants to by GM or Ford automobiles, but Alberta is booming, and the Tar Sands seem to be supporting not only Alberta, but communities across Canada.
I was speaking strictly about real estate above. Other segments of the economy are another thing, and, in Canada, very regional. People also say 'all real estate is local' -- I don't entirely agree, these days, although there is some truth to it.
Borrowing rules in Canada are stricter than in the United States.
Not by much. Forty-year mortgages were introduced by Harper's govt in 2006, and were madness (and have since been restricted again, because the government, unlike you, it seems, good sir, sees how precarious the situation has become) -- like the subprime ARMy bullshit mortgages in the US, the long amortizations sucked in people who could not afford to service the debt on the properties they were trying to buy. Mortgage costs have increased 9% in the past year in Canada. That's pain for variable-rate holders of long-term mortgages. Zero-down financing was approved by the Canada Housing and Mortgage Corporation and qualified for mortgage insurance coverage, which means a multitude of homes and condos were built and sold to people (and flippers) without the money to pay for them. I'm not saying things got as stupid as they did in the US, but they certainly haven't been all good in the last few years' run-up to this peak, over which many RE markets are just cresting in the past few months.
Canada is not going to go through a housing meltdown.
Sure, keep saying that in a confident voice, cap'n, but first tell me what you mean by 'meltdown', and then do have a look around. Will the predicted 35% drop in Victoria RE prices (to pick a market in which I know you're interested) that has been bruited in the mainstream media, from Merrill Lunch analysts, in the last couple weeks mean a 'meltdown'? It sure as hell isn't going to be happy hoopla days!
Here's the money quote from that article:
David Wolf, another Merrill Lynch Canada economist, points out that the average house in Canada is now four times average household income. During the last boom market in 1989 which ended in bust, as these runups inevitably do, that ratio peaked just over three times income. In the US the ratio at the peak before the slide began was less than it is in Canada now.
Sure, there has never been a better time to buy a house in the last five years, but it's not as though people are losing major amounts of equity. Housing prices have doubled in the past five years. What more do you want?
I'm not sure if there are typos here, or you're just, well, wildly wrong. There hasn't been a worse time to buy (in terms of price trends) than the last, say, 3 years or so, other than the peaks of the last two runups in the last 3 decades. The exceptions being investors who bought in 2003 and sold before the beginning of this year, of course. They made a tidy sum.
People aren't losing major equity yet, but they're starting to, and a cursory glance at the numbers show the pain is going to get worse. If people don't care that their house is going to lose value because it's their long term home, it won't matter much. The ground will eventually be clawed back, and history shows it'll probably take 10-15 years to do so after the bottom is reached. For those who are going to go underwater because property values in many major markets are going to decline further, well, they'll be feeling some pain, especially if the meet any income-limiting misfortunes. Don't take my word for it about all this, though.
Look here. And here. And here. And here. And here. And here.
posted by stavrosthewonderchicken at 10:33 PM on August 19, 2008 [2 favorites]
Why on earth would you say that? In 2005, I was suggesting that the real estate tide would turn in markets like Vancouver and the even frothier markets in Alberta in 2008 or 2009, with a bottom in 2010 or 2011. In 2006, I was saying the same thing. In 2007, same. This year, same. My expectations were never about 'next week'. Real estate moves slowly, and although only fools like me make predictions, only greater fools make short-term predictions in the RE market.
I doubt Canada is on the edge of a major downturn. In fact, I don't think you can even really make these assumption that there is one Canadian economy. Ontario may be suffering because no one wants to by GM or Ford automobiles, but Alberta is booming, and the Tar Sands seem to be supporting not only Alberta, but communities across Canada.
I was speaking strictly about real estate above. Other segments of the economy are another thing, and, in Canada, very regional. People also say 'all real estate is local' -- I don't entirely agree, these days, although there is some truth to it.
Borrowing rules in Canada are stricter than in the United States.
Not by much. Forty-year mortgages were introduced by Harper's govt in 2006, and were madness (and have since been restricted again, because the government, unlike you, it seems, good sir, sees how precarious the situation has become) -- like the subprime ARMy bullshit mortgages in the US, the long amortizations sucked in people who could not afford to service the debt on the properties they were trying to buy. Mortgage costs have increased 9% in the past year in Canada. That's pain for variable-rate holders of long-term mortgages. Zero-down financing was approved by the Canada Housing and Mortgage Corporation and qualified for mortgage insurance coverage, which means a multitude of homes and condos were built and sold to people (and flippers) without the money to pay for them. I'm not saying things got as stupid as they did in the US, but they certainly haven't been all good in the last few years' run-up to this peak, over which many RE markets are just cresting in the past few months.
Canada is not going to go through a housing meltdown.
Sure, keep saying that in a confident voice, cap'n, but first tell me what you mean by 'meltdown', and then do have a look around. Will the predicted 35% drop in Victoria RE prices (to pick a market in which I know you're interested) that has been bruited in the mainstream media, from Merrill Lunch analysts, in the last couple weeks mean a 'meltdown'? It sure as hell isn't going to be happy hoopla days!
Here's the money quote from that article:
The Merrill economists are most concerned about Saskatchewan, where the doubling of house prices in Regina and Saskatoon over the past two years means, they estimate, these markets are almost 50 per cent overvalued.Sorry, mate, but I'm inclined to take the word of Merrill Lynch economists over yours.
In B.C., Vancouver's and Victoria's housing markets are now as much as 35 per cent overvalued, they believe. Markets in Alberta, meantime, have become slightly less overvalued in the past year.
The rest of the country looks “better balanced,” they said, with housing in Toronto essentially at fair value.
David Wolf, another Merrill Lynch Canada economist, points out that the average house in Canada is now four times average household income. During the last boom market in 1989 which ended in bust, as these runups inevitably do, that ratio peaked just over three times income. In the US the ratio at the peak before the slide began was less than it is in Canada now.
Sure, there has never been a better time to buy a house in the last five years, but it's not as though people are losing major amounts of equity. Housing prices have doubled in the past five years. What more do you want?
I'm not sure if there are typos here, or you're just, well, wildly wrong. There hasn't been a worse time to buy (in terms of price trends) than the last, say, 3 years or so, other than the peaks of the last two runups in the last 3 decades. The exceptions being investors who bought in 2003 and sold before the beginning of this year, of course. They made a tidy sum.
People aren't losing major equity yet, but they're starting to, and a cursory glance at the numbers show the pain is going to get worse. If people don't care that their house is going to lose value because it's their long term home, it won't matter much. The ground will eventually be clawed back, and history shows it'll probably take 10-15 years to do so after the bottom is reached. For those who are going to go underwater because property values in many major markets are going to decline further, well, they'll be feeling some pain, especially if the meet any income-limiting misfortunes. Don't take my word for it about all this, though.
Look here. And here. And here. And here. And here. And here.
posted by stavrosthewonderchicken at 10:33 PM on August 19, 2008 [2 favorites]
One awesome thing about the tanking economy is that if you haven't been piling debt onto yourself for the last few years, your credit can easily be good enough to get a really sweet deal on a house.
posted by agress at 10:38 PM on August 19, 2008
posted by agress at 10:38 PM on August 19, 2008
Stavros:
From the GM article:
“Are prices going to fall 20 per cent the way they did in the U.S.? Probably not,” he said. “But it's pretty clear that things are weakening and they're going to continue weakening for some time.”
Look, I agree with you that perhaps housing markets in places like Saskatoon and Regina (where housing prices increased much later, and much faster than the rest of Canada) are probably pretty precarious, but Victoria? I'm not sure how many actual houses are bought by speculators here, but I would still say that it's a good investment. It's just that access to capital has dried up, which is affecting prices. I really don't know how many people in Victoria or Vancouver are buying houses as investment vehicles, but I suspect that most people are buying homes here and in Vancouver and Kelowna to live in or use on the holidays.
Is there going to be a major correction? I don't think so. Are a lot of construction workers going to be out of work (BC's economy has really been driven by construction for the past few years) because people are building fewer houses? I don't think so, because there is just a ton of infrastructure/commercial projects going up all over the province.
When I say there has never been a better time to buy a house in the last five years, I mean it's because prices are falling, or are not increasing as much as they have over the past five years. So why not buy now?
If you're talking about buying a condominium as an investment here in Victoria or Vancouver, well, yeah, terrible investment. Prices will probably drop.
But I also tend to think that the newspapers you linked to are suffering from the summer silly season. They need something to hype. And CTV/G&M doesn't really understand western Canada anyway.
posted by KokuRyu at 11:41 PM on August 19, 2008
From the GM article:
“Are prices going to fall 20 per cent the way they did in the U.S.? Probably not,” he said. “But it's pretty clear that things are weakening and they're going to continue weakening for some time.”
Look, I agree with you that perhaps housing markets in places like Saskatoon and Regina (where housing prices increased much later, and much faster than the rest of Canada) are probably pretty precarious, but Victoria? I'm not sure how many actual houses are bought by speculators here, but I would still say that it's a good investment. It's just that access to capital has dried up, which is affecting prices. I really don't know how many people in Victoria or Vancouver are buying houses as investment vehicles, but I suspect that most people are buying homes here and in Vancouver and Kelowna to live in or use on the holidays.
Is there going to be a major correction? I don't think so. Are a lot of construction workers going to be out of work (BC's economy has really been driven by construction for the past few years) because people are building fewer houses? I don't think so, because there is just a ton of infrastructure/commercial projects going up all over the province.
When I say there has never been a better time to buy a house in the last five years, I mean it's because prices are falling, or are not increasing as much as they have over the past five years. So why not buy now?
If you're talking about buying a condominium as an investment here in Victoria or Vancouver, well, yeah, terrible investment. Prices will probably drop.
But I also tend to think that the newspapers you linked to are suffering from the summer silly season. They need something to hype. And CTV/G&M doesn't really understand western Canada anyway.
posted by KokuRyu at 11:41 PM on August 19, 2008
Well, let's meet back here in a year and see. I expect the end game will be somewhere between our positions on it, but closer to mine. ;-)
posted by stavrosthewonderchicken at 11:42 PM on August 19, 2008
posted by stavrosthewonderchicken at 11:42 PM on August 19, 2008
I suppose this NYT article contradicts my argument (it says we're headed for a global recession), but it will be interesting to see if Canada has truly "decoupled" from the American economy and can weather a declining market for commodities.
The general assumption in government here in BC is that, post 2010 and the Olympics, we're in for a hangover.
posted by KokuRyu at 11:58 PM on August 19, 2008
The general assumption in government here in BC is that, post 2010 and the Olympics, we're in for a hangover.
posted by KokuRyu at 11:58 PM on August 19, 2008
I think the pine beetle problem is certainly going to have a decelerating effect on the overall BC economy too, so post-2010 is going to be a bit of a perfect storm. With employment so low there at the moment in large part thanks to construction, when that goes away (post-Olympics and as lower-mainland oversupply of housing kicks in), coupled with job losses in forestry, well, yeah. Hangover.
posted by stavrosthewonderchicken at 12:12 AM on August 20, 2008
posted by stavrosthewonderchicken at 12:12 AM on August 20, 2008
And everyone, deep down -- perhaps subconsciously -- knows that everything is going to work itself out in the end.
Yes, when the magic energy fairy refills the oilfields? That NYT article scares me - I assume we're going to be paying high prices just as Americans are.
posted by sebastienbailard at 12:13 AM on August 20, 2008
Yes, when the magic energy fairy refills the oilfields? That NYT article scares me - I assume we're going to be paying high prices just as Americans are.
posted by sebastienbailard at 12:13 AM on August 20, 2008
Gee. Yet another article aimed at blaming consumers for the coming darkness. The article seems to completely ignore the economic issues that have pushed many families to incur high debt...like stagnating income, loss of benefits, healthcare costs, etc.
posted by Thorzdad at 5:02 AM on August 20, 2008 [2 favorites]
posted by Thorzdad at 5:02 AM on August 20, 2008 [2 favorites]
I just wish the fucking crash would happen already and shut these "pundits" up.
Crashes are things that happen all of a sudden, there is no crash coming, what is happening is more like grandpa slowly reversing into the neighbour's letterbox after family lunch.
posted by mattoxic at 5:15 AM on August 20, 2008
Crashes are things that happen all of a sudden, there is no crash coming, what is happening is more like grandpa slowly reversing into the neighbour's letterbox after family lunch.
posted by mattoxic at 5:15 AM on August 20, 2008
I saw the movie Crash, hopefully the sequel will have better effects.
posted by Vindaloo at 5:37 AM on August 20, 2008
posted by Vindaloo at 5:37 AM on August 20, 2008
mattoxic, the stock market took three years after the Black Tuesday of 1929 to hit rock bottom. Crashes are often a sign of things that happen slowly. Like Aunt Bunny falling down the stairs.
posted by anthill at 5:42 AM on August 20, 2008
posted by anthill at 5:42 AM on August 20, 2008
Also, I bet the forestry sector downturn in British Columbia would hurt more if marijuana agriculture wasn't bringing in more money
posted by anthill at 5:45 AM on August 20, 2008
posted by anthill at 5:45 AM on August 20, 2008
I don't want to pile on, except to note that how weird it is to assume that the world is coming to end as a result of road-to-hell behaviors which were themselves quick adaptations to new conditions, and then not to assume that the new challenges will meet quick and most likely successful adaptation.
Huh? "Quick"? Isn't a big part of the issue the trade deficit? In 2007 we had an $815 B deficit. This is close to a 30 year trend. Here's a couple of quotes from Volcker:
2001: "We are a debtor nation with nil personal savings and are absorbing a significant portion of other countries savings. These huge and growing external deficits are symptoms of imbalances in the national economy and the world economy that cannot be sustained."
2005: "The difficulty is that this seemingly comfortable pattern can't go on indefinitely. I don't know of any country that has managed to consume and invest 6 percent more than it produces for long. The United States is absorbing about 80 percent of the net flow of international capital. And at some point, both central banks and private institutions will have their fill of dollars."
Sure, there will be an adaptation. But, quick? I doubt it. The weakened dollar certainly helps our exports but we have a long road in front of us.
The article may have been a bit breathless, but I certainly wouldn't argue against it. One key point that he barely touched on is that the economic statistics released by the government have been rather strenuously "massaged".
does anyone seriously believe that 10 years from now, things won't be pretty much as they are today, or a few years ago?
What does this mean? We can always find points of similarity, the question is how broadly will we have to look. I can give you a snarky answer and say I expect the borders of the country to be in the same place, but that's not saying much. Thing is, you aren't stating what you think will be the same. What numbers, what measurements? Well, here's what I think will be different. Ten years from now, either taxes will have gone up substantially (and therefore prosperity, down) or our social safety net for the poor and the elderly will have shrunk. Probably the former, maybe both. Education and medical care will take up an increasing share of salary. The recently retired who actually put some savings away will have less to work with than they anticipated due to the poor performance of the stock market. But since those trends are already in existence now, perhaps you're right and it's same as it ever was.
posted by BigSky at 5:49 AM on August 20, 2008
Huh? "Quick"? Isn't a big part of the issue the trade deficit? In 2007 we had an $815 B deficit. This is close to a 30 year trend. Here's a couple of quotes from Volcker:
2001: "We are a debtor nation with nil personal savings and are absorbing a significant portion of other countries savings. These huge and growing external deficits are symptoms of imbalances in the national economy and the world economy that cannot be sustained."
2005: "The difficulty is that this seemingly comfortable pattern can't go on indefinitely. I don't know of any country that has managed to consume and invest 6 percent more than it produces for long. The United States is absorbing about 80 percent of the net flow of international capital. And at some point, both central banks and private institutions will have their fill of dollars."
Sure, there will be an adaptation. But, quick? I doubt it. The weakened dollar certainly helps our exports but we have a long road in front of us.
The article may have been a bit breathless, but I certainly wouldn't argue against it. One key point that he barely touched on is that the economic statistics released by the government have been rather strenuously "massaged".
does anyone seriously believe that 10 years from now, things won't be pretty much as they are today, or a few years ago?
What does this mean? We can always find points of similarity, the question is how broadly will we have to look. I can give you a snarky answer and say I expect the borders of the country to be in the same place, but that's not saying much. Thing is, you aren't stating what you think will be the same. What numbers, what measurements? Well, here's what I think will be different. Ten years from now, either taxes will have gone up substantially (and therefore prosperity, down) or our social safety net for the poor and the elderly will have shrunk. Probably the former, maybe both. Education and medical care will take up an increasing share of salary. The recently retired who actually put some savings away will have less to work with than they anticipated due to the poor performance of the stock market. But since those trends are already in existence now, perhaps you're right and it's same as it ever was.
posted by BigSky at 5:49 AM on August 20, 2008
does anyone seriously believe that 10 years from now, things won't be pretty much as they are today, or a few years ago?
Climate change, a dramatic rise in energy costs, increasing pressure on agriculture globally coupled with increased competition for resources, the demographic shift resulting in aging, less productive societies in Europe, North America, Japan and even China, and fallout from the past decade of war and the erosion of the core values of human rights will probably make our world (the world of the average MeFite user) much different than it is today.
For one thing, is it still going to be possible to fly as much as we used to? How will a 0.5 degree Celsius rise in average temperature affect city living in the summer? Will there be any commercial finfish fisheries left - will you still be able to by wild fish in the supermarket? Will there be anything like personal privacy left?
I'm sure things will be mostly the same (I don't think Europe or North America will resemble Escape from New York, but things are already dire for Africans right now), but we're in for an accelerated raft of drastic changes.
posted by KokuRyu at 6:33 AM on August 20, 2008 [2 favorites]
Climate change, a dramatic rise in energy costs, increasing pressure on agriculture globally coupled with increased competition for resources, the demographic shift resulting in aging, less productive societies in Europe, North America, Japan and even China, and fallout from the past decade of war and the erosion of the core values of human rights will probably make our world (the world of the average MeFite user) much different than it is today.
For one thing, is it still going to be possible to fly as much as we used to? How will a 0.5 degree Celsius rise in average temperature affect city living in the summer? Will there be any commercial finfish fisheries left - will you still be able to by wild fish in the supermarket? Will there be anything like personal privacy left?
I'm sure things will be mostly the same (I don't think Europe or North America will resemble Escape from New York, but things are already dire for Africans right now), but we're in for an accelerated raft of drastic changes.
posted by KokuRyu at 6:33 AM on August 20, 2008 [2 favorites]
The cure for the common economical dooms day prediction is.....
Pay your debts on time and don't bite off more than you can chew!
Another little tidbit of help would be always save something from each paycheck no matter how small, and pay a little extra on your payments. I have done this from day one and I do not have any luxury debt only student loans and house.
posted by Mastercheddaar at 7:41 AM on August 20, 2008
Pay your debts on time and don't bite off more than you can chew!
Another little tidbit of help would be always save something from each paycheck no matter how small, and pay a little extra on your payments. I have done this from day one and I do not have any luxury debt only student loans and house.
posted by Mastercheddaar at 7:41 AM on August 20, 2008
A rising tide lifts all bloats.
posted by blue_beetle at 8:23 AM on August 20, 2008
posted by blue_beetle at 8:23 AM on August 20, 2008
I really don't know how many people in Victoria or Vancouver are buying houses as investment vehicles, but I suspect that most people are buying homes here and in Vancouver and Kelowna to live in or use on the holidays
Homes in Vancouver/Victoria are definitely being bought as investments. I speak from personnel experience with several of my real estate agent friends.
As for condos, I'm looking forward to picking something up in Coal Harbor in about 3 years, when everyone else besides BC Hydro realizes that neighborhood has a 40% "uninhabited" rate and the owners realize, hey, all those Olympic visitors really didn't want to live here after all.
posted by concreteforest at 9:39 AM on August 20, 2008
Homes in Vancouver/Victoria are definitely being bought as investments. I speak from personnel experience with several of my real estate agent friends.
As for condos, I'm looking forward to picking something up in Coal Harbor in about 3 years, when everyone else besides BC Hydro realizes that neighborhood has a 40% "uninhabited" rate and the owners realize, hey, all those Olympic visitors really didn't want to live here after all.
posted by concreteforest at 9:39 AM on August 20, 2008
I have a question.
The housing bubble was mostly an influx of monopoly play-money into the economy - ficticious value invented on paper via unrealistic price evaluations of assets. Now that that play-money is evaporating back into the thin air from whence it came, whoever paid real assets for the play-money-valued assets, has lost... lots, and is in trouble.
Who made off with the real assets?
We know (sort of) who is left holding bag. Who made off with the gold that bought the bag?
posted by -harlequin- at 11:42 AM on August 20, 2008
The housing bubble was mostly an influx of monopoly play-money into the economy - ficticious value invented on paper via unrealistic price evaluations of assets. Now that that play-money is evaporating back into the thin air from whence it came, whoever paid real assets for the play-money-valued assets, has lost... lots, and is in trouble.
Who made off with the real assets?
We know (sort of) who is left holding bag. Who made off with the gold that bought the bag?
posted by -harlequin- at 11:42 AM on August 20, 2008
Who made off with the real assets?
There wasn't all that much in real assets to make off with. If you want to cast blame on individuals who made a profit then you can point at home flippers, or those who sold at the peak and moved into a rental. I'm not convinced they did anything unethical. Those who sold their equity in housing when it was overvalued acted appropriately for the given circumstances.
As for institutions, any financial institution that knowingly under estimated the risk of subprime loans and then packaged them up for sale to a bank went way beyond looking after their own best interests. There's a difference between banks under estimating the risks of the loans they hold, and selling the loans knowing that the banks are taking on more risk than they are aware of. Here's an article describing how an investment bank could set up a hedge fund doing exactly that. I don't if there were any institutions that both pulled this off and were out of the real estate market as it crashed. If there were, I suspect that sooner or later they'll get a fair bit of attention. My guess is that there wasn't all that much malice, just a lot of greed and that plus hopes of a bailout should the worst case come to pass, is enough for many to abandon prudence.
And on a related subject, here's an interesting discussion of the $500 B in ARM option mortgages that are resetting over the next six months. Good times ahead.
posted by BigSky at 2:21 PM on August 20, 2008
There wasn't all that much in real assets to make off with. If you want to cast blame on individuals who made a profit then you can point at home flippers, or those who sold at the peak and moved into a rental. I'm not convinced they did anything unethical. Those who sold their equity in housing when it was overvalued acted appropriately for the given circumstances.
As for institutions, any financial institution that knowingly under estimated the risk of subprime loans and then packaged them up for sale to a bank went way beyond looking after their own best interests. There's a difference between banks under estimating the risks of the loans they hold, and selling the loans knowing that the banks are taking on more risk than they are aware of. Here's an article describing how an investment bank could set up a hedge fund doing exactly that. I don't if there were any institutions that both pulled this off and were out of the real estate market as it crashed. If there were, I suspect that sooner or later they'll get a fair bit of attention. My guess is that there wasn't all that much malice, just a lot of greed and that plus hopes of a bailout should the worst case come to pass, is enough for many to abandon prudence.
And on a related subject, here's an interesting discussion of the $500 B in ARM option mortgages that are resetting over the next six months. Good times ahead.
posted by BigSky at 2:21 PM on August 20, 2008
Thanks pasici. That 1980 Rome stuff is the bees knees. What an amazing music machine.
-j
posted by jetsetsc at 6:35 PM on August 20, 2008
-j
posted by jetsetsc at 6:35 PM on August 20, 2008
In Prince George, a plywood mill burned to the ground and Canfor decided not to open it. Yet unemployment rose from 6% to perhaps 7% (and PG is also suffering from pine beetle and the forestry slowdown).
And the Columbus Hotel burnt down today. This is a terrible cultural loss for the city, leaving the various D-grade strippers and dollar crack whores without a place to do their trade. One can only hope the Hell's Angels rebuild their facility promptly, minimizing this shocking turn of events.
posted by five fresh fish at 9:16 PM on August 20, 2008
And the Columbus Hotel burnt down today. This is a terrible cultural loss for the city, leaving the various D-grade strippers and dollar crack whores without a place to do their trade. One can only hope the Hell's Angels rebuild their facility promptly, minimizing this shocking turn of events.
posted by five fresh fish at 9:16 PM on August 20, 2008
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image tag :p
posted by cavalier at 7:12 PM on August 19, 2008 [2 favorites]