Another Great Depression?

[Crankin]

Well, why do people put more than the insured $100 K in a bank account?? I want to say the Dr. Phil line, "What were you thinking?" I mean, who would invest all of that money in an account getting 3% interest? Then they get mad when their savings over the $100K amount may be in jeopardy! I am not one who is super well versed in all things financial, but that message is clearly on the all of the doors and windows of all banks. It seems to me, the more people stand in line and yank their money out, the worse things will get.
I remember thinking the same thing with the Lincoln Thrift debacle. At the time, I lived in Phx and these were on every corner. But it was clear that they were not traditional banks and the accounts weren't insured. Sure, the Keating 5 were real sleazeballs, but again, who would put their money in an institution like that? It was bad enough that I bought my first house from Mr. Keating (Continental Homes), but at least the city of Chandler changed the name of Keating Drive after the scandal.
It wouldn't hurt for everyone to look at their finances and see where things can be tightened up. But I guess I am one of the few who sees the glass as half full. This is a cycle that has happened at least 3 times since I graduated from college.

[GLC1968]

The worst thing people can do right now is panic.

The best thing people can do right now is pay down their debt as much as possible.

True, on both counts.

The difference between now and the 1930's though is that today's economy is so extremely oil dependent. In addition, our world population is larger and our food supply is very centralized and also oil dependent. Personally, I think things have the potential to be MUCH worse than they were in the first Great Depression. Will it happen? Hard to say. Back then, most people knew how to do things by hand and how to grow their own food. Our nation still had many small and family farmers and our city populations were much less dense. Today, not so much. Financial problems and unemployment aside, I think that food is going to get ridiculously expensive and sparse in the very near future. As it is, people are already starting to have to choose between gas in the car and food on the table. What happens when they have to figure 'heat in the house' into that equation?

Yep, count me in the 'worried' group.

[BleeckerSt_Girl]

Things actually have the potential for being much worse this time around.

[Blueberry]

GLC-

Are you guys moved? Have you ridden into work yet? Just curious as to how it's going

CA

[GLC1968]

CA - I just posted about it in the commuting forum! We moved on Saturday. My first commute is tomorrow!

[Katie.Marie]

Very discouraging coming out of college with a social work degree that took 5 years! Starting at $30,000 it just not enough for working with social services and anyone in general!

[Mr. SR500]

I really wonder how much is media driven. If your told the economy is bad enough, eventually you'll start changing your habits and then things will really turn. My business is SLOW, but it's off-season so I'm hoping for a recovery this fall, but I've had to make changes to account for the lower income and higher expenses we now have. Gas is still cheaper then in Europe, but with coal and natural gas recently going up, we will get hit again this heating season. Who knows, but I'm hoping things will turn around soon.

[Crankin]

Yes, people have been routinely paying 7-10 dollars a gallon for gas in Europe for a long time. Guess what? They have cars that get good gas mileage, they have good public transportation, and they ride their bikes. When are we going to wake up?
I am still an optimist, even if banks keep giving mortgages to people who can't afford them...

[Paradox]

I really wonder how much is media driven. If your told the economy is bad enough, eventually you'll start changing your habits and then things will really turn.

I think a lot of the anxiety is media-driven, now that we have access to 24/7 constant (bad) news. In prior economic downturns, it didn't seem like all media outlets were competing for the most depressing story. Now, I work in the mortgage/finance industry, so I'm pretty up to date on what's going on in the economy, and no, it is not pretty. But is it any worse than anything the U.S. has been through before? Probably not. Things go in cycles. The dot-com bust hurt a lot of people too.

I found these two things humorous for anyone who wants a less-depressing take on things from the media:

http://www.theonion.com/content/news...nation_demands

http://calculatedrisk.blogspot.com/2...d-economy.html

[pll]

Liquidity for a small business? Liquidity for a big purchase in the near term?

Well, why do people put more than the insured $100 K in a bank account?? I want to say the Dr. Phil line, "What were you thinking?" I mean, who would invest all of that money in an account getting 3% interest?

[tulip]

I'm buying a house, as some of you know. This is my third house purchase. It's quite a simple house, and quite a low price, well within my means. My credit is great, and I'm a good catch for a lender! The mortgage payments will be several hundred dollars less than my current rent.

It's been quite a ride to get approved this time around. Yesterday I got official notice of approval by the lender. Part of it may be that it's an FHA loan, but I think that lenders are being super careful and scrutinizing everything. Jeez, when I bought my house in DC (double this house!) it was practically automatic. I was biting my nails over this one...and will continue to do so until they give me the key.

Once I get the key, however, I'm putting in a veggie garden and putting up a clothes line. Oh, and I also have to build a kitchen. Details, details.

[Fredwina]

with IndyMac, they were giving cashiers check to people who pulled their money out. Some bank were slapping 8 week hold when they were deposited, though.

[Pax]

I'm buying a house, as some of you know. This is my third house purchase. It's quite a simple house, and quite a low price, well within my means. My credit is great, and I'm a good catch for a lender! The mortgage payments will be several hundred dollars less than my current rent...

We're a few weeks ahead of you (we already closed) but our situations are really similar. We could have bought a much bigger house that was further from work but we decided that a smaller/less expensive house that is bikeable/walkable to work, groceries, shopping was a truly sensible choice. It's nice to know that if the economy crashes and burns we'll be able to afford our little house and can leave our cars parked as long as necessary.

[smilingcat]

The new trend in house purchases is toward smaller and more reasonable sized home and away from McMansions. I think this is a wonderful trend. My house is 1600sq feet. It's a beach bugalow built in 1939. 2 bedroom/1bath...with detached garage. if you've got two small cars it will fit but not todays midsized cars.

Well heck growing up in Utah, with many of my friends coming from a rather large family (6 or more kids), they seemed to have managed just fine with 3bedroom one bath or one-and-half bath sized house. typical square footage was around 1600 sq. feet. And if you grew up in a house with over 2,000 sq feet that was a luxury. BTW, I did ask my friends about the bathroom situation in the morning... My friends said forget about makeup in the bathroom! or doing your hair! 10min/kid and its still one solid hour of bathroom usage in the morning.

smilingcat

[Trek420]

I'm several years behind both of you. I chose a small place near public transportation options, it was waaaaaay the heck below market value of similar units at the time. Messy, cluttered, crowded, unpainted ... the sellers had done nothing to stage the joint. Their agent was a moron not to tell them what to do (at least de'clutter, fix, clean and paint).

So here I am.

:::sigh::: I missed the housing bubble. I coulda done this remodel and sold the joint for over twice what I paid. Silly me. I did back to back to back to back CA AIDS rides, recovered my health and fitness, met Knott and had some great rides. No regrets.

Meanwhile to my peers/coworkers who chose bigger places in Vacaville, Sacto, Modesto ... with matching huge commutes .... I <3 my tiny 1.5 miles to BART condo.

I think people will always want to live in CA, the housing market will recover slightly somehow at some time. All I need is one person or family who's learned the lesson of living closer to work/transit.