If we're in/going into a recession, how bad will it get?

Not to mention the panics of the 19th century.

 

Fewer cars, rumple. Sorry, it's a pet peeve. But you're right on everything else.

 

In my uninformed economic opinion, I'd say what we're in right now is a Panic. It may lead to a recession, it might not. Odds are, it will.

Then again, I only took one semester of economics back in 1993.

 

Yeah, once I looked over it again, I found that. You're right.

 

My first job, at age 11, was delivering the Muskegon Chronicle in 1981, and I could see how the recession was ripping people from house to house. It seemed like half my route, in desperation, was studying to be a real estate agent or an insurance agent, as if those were surefire routes to financial success. The paper I delivered had stories about the number of people fleeing, especially to Houston, which thanks to the oil crisis of that time was having good, good times. (This was when gas stations put their prices up by the liter so they wouldn't look so bad. Also, five years later, when energy prices fell and the rest of the country was doing well, Texas was in the deep, deep shit everybody else suffered previously).

My family moved to Fort Wayne in 1982, and my father's company told him not to bother to buy a house, which was a good thing. The subdivisions we lived in (two in nine months in the Fort) had little roads to nowhere were houses had been platted, but weren't built because of the declining industrial economy. I think people were still moving to Houston.

Like what is going on now, the recession of the late 70s/early 80s represented a fundamental change in the American economy, in that a lot of industrial jobs were starting to disappear. In a way, it seems like the pop in the housing bubble is a fundamental change in that year upon year of real stagnanation or decline in middle-class American wages can't be covered up with credit forever. People lost their homes in the previous big recessions because they didn't have a job -- while that is happening now, people had access to far more credit than they did then. However, I remember at that time hearing about banks who were in deep, deep shit because they were lending to hyperinflation-racked South American juntas and were losing their shirts, so there's always idiotic, greedy bankers who are ready to ignore reality if they think it gets them millions in bonuses in the short term.

If there's an upside to recessions, it's that it the music is better during those periods.

The hard thing to remember is that recessions can and do end. But this isn't going to be one of those short hiccups. Not until a lot of this bad debt is wrung out, and not until credit is available. It doesn't have to be like it was in the housing runup, but nobody's getting loans for anything at the moment, which is just as dangerous.

 

Don't worry... Newspapers will be fine... :

 

Can't believe nobody's mentioned the oil market yet. Until it straightens out — or, better yet, we take all of the speculators and put them on a one-way rocket trip into the sun — things are going to keep getting tight on a lot of fronts. The price of diesel goes up, so does the price of everything else to pay for shipping.
The scary thing about that, though, is what happens when the oil bubble does burst? Eventually, it'll reach a point where it can't sustain itself. Will it take our whole economy with it? And what kind of ripple effect will it have on the world?
We're such big consumers, if our economy goes into the toilet then so does China's and India's. Europe might be all right for a time because they can sustain themselves. But they've shown (especially in France) that economic woes there aren't good for political stability. And, of course, you have the power vacuum that goes along with declining U.S. influence.
Without a doubt, this has got to be THE No. 1 issue in this year's election. What will, or what can, you do to get the economy back on track. And the first candidate to suggest dumping more cash into the system or further massaging interest rates gets a kidney punch.

 

Somehow bringing down the price of education seems like it would be a huge, huge step in helping the U.S. economy. New workers pump no money into the economy because they owe so much in loans.

 

Pretty fucking bad, according to one guy who's supposed to know.
http://www.cnbc.com/id/23629967

 

Bring back Glass-Steagall!

http://www.prospect.org/cs/articles?article=the_bubble_economy

Seriously, if Obama's people want to really hit Clinton's campaign -- not that this would necessarily be fair, but what is at this point in the campaign? -- it could bring up that her husband signed the bill that deregulated the financial markets to the point that an economic implosion is the only way we're finding out about some of the worst shit going on.

At the least, I hope the financial sector enjoys the regulatory handcuffs that are going to be re-locked. Politics aside, those folks get the first finger of blame pointed in their direction for their fate.

 

Can you provide a link? I do the biz page here a couple times a week, and I haven't seen anything about subprime car loans.

My god, if that is true, we're really and truly fucked.

 

Well, offering crazy loans like that is what put Mitsubishi (the car company) into the shitter. People could just essentially walk in, walk out with a car, not make any payments, and by the time they gave it up/got repo'd, the car was generally trashed and Mitsubishi really couldn't put it on the resale market.

Fuck all the lenders who gave crazy credit terms to everyone who had no business being able to buy a home.

The government floats bonds to offset debt. And who's been buying them? China. In a matter of years-God knows how many-we're all gonna be China's bitches whether we like it or not.