The recession isn’t ending…

Views

133

Share

Four years ago the world felt a shock wave similar to doing a polar bear run into the ocean on New Year’s Day. Lots of people and companies were in trouble and could not swim to safety. However, some were able to make it back to shore and have been muddling along the beach ever since.

At this point, however, the beach has turned into a sinkhole of mud. I am seeing more desperation garage sales and many middle class people who have finally spent all of their reserves.

It seems like big companies have shifted to maintaining cash reserves and will not be faced with the desperation financings of 2008 again, but at the same time the average household is losing its grip and going under. This is all anecdotal of course.

 

It seems very hard to separate data from the pre-2008 mess to the post-2008 mess. All the data seems to have a significant political slant to it, either in support of a recovery or a double-dip recession.

It is not all bad news. With record-low interest rates, some people are buying homes, but they tend to be the people who have good jobs and the recession has side stepped. The unemployment rate is improving, but it does not take into account the underemployed or the number of people who have stopped looking.

Globally, the same mud sinkhole seems to have caught all of Europe off guard, and China is starting to run on empty. China can probably prop up its economy for another few years, but Europe is a basket case with no plan to ever balance a budget again.

In my view, we’re going to face another event this fall. It will likely happen after Obama is re-elected and will not be as bad as 2008. However, most of us have already spent our reserves, so another event will be much more difficult to handle since we’re still trying to recover from 2008.

I am working on balancing budgets right now, and I am battering down the hatches. I think I will come out of the other end OK, but I worry about the guy on the corner who just had a garage sale. You could feel the stress in his handshake as he debated his mortgage payments in terms of what he could sell. He did sell me a nice bike for $50. It needs a bit of work, but I ride it every day.

Close

Newsletter Sign up






    Close

    Become in our Sponsor

      We will contact you to present our sponsor plans and pricing