Hi Gloop....While I'm far from an expert on the economic situation...(I do have a son whose major was Econ and Business, who says "Never Trust an Economist") He's a Bob Brinker believer, but with some modifications, and my hubby is a Warren Buffet investor type.
First, if you want to know what is really going on, check with 2 or 3 really good Exec Recruiters whom you trust and that will tell you the truth. See what their Corp job base is....and how it compares to the 1989-91 time frame... Also how it compares to the bigger problem of 1999-2001 and then after 9-11.... So many people who didn't know better thought the 'recession' was GWB's doing, but really it started back there in the mid-to-late 90's when the bubble was just about to explode. The charts today now tell us that May of 2000, before the election was when the public noticed the situation IF they were paying attention.
Those were really rough times, and the general public didn't realize it, because the "outside world" looked healthy. We knew it wasn't, ESPECIALLY in the March 2000 until Sept 2001....It was terrible then. Then we had 9-11. We all remember how tough that was.
Where I think people should start to worry is when commercial real estate goes down. Not the general housing market. When commercial stops, it means they are overbuilt, and companies aren't growing.
The housing market is overbuilt, by a lot, IMO. Builders wanted to put their money in something that would get more than 6% ....so speculated on houses.
Young folks overbought what they could afford, largely because with 10% or less down payments they thought it was a good deal, so they bought a larger place. Then most of them proceeded to fill up that brand new big house with things that were as nice, or nicer, than their folks had. The folks might have taken 25-40 years to collect their things, but IMO too many younger people want everything NOW. And aren't willing to save to get it. So, many of them have credit cards (plural) maxed.
And yes, many of them re-fi'd their new home like they bought clothes....Lots and often. I agree with much you said in this regard. Also in regard to many young folks being "payment buyers"..... Leasing is so bad for so many, especially if they drive more than 12000 to 15000 miles a year. Many of these folks never looked at the contracts to see what would happen if they had to cancel the contracts....(one of ours did that...son needed a car....now-former wife wanted a new one too even if it wasn't a "need" situation....then a divorce, a have to sell the contracts, and lots of money down the drain.....)
I doubt that these two were the only ones this happened to...
You're right. Most of us have not gone through a depression. Although the 1999-2002 years were fairly tough on many people. PhD's were having a tough time even finding any job in that time, and in the 1989-1991 time frame as well.
And yet, many people haven't still read and understood compound interest. If a person saves 10% of every pay check from their first one out of college, when they retire, they will retire as a multi-millionaire.
I had a 60+ hour seminar years ago on Money. Not necessarily how to make more. But really understanding it is our ATTITUDE about Money/Life that is what we need to understand. Most of have built in baggage about money ("there isn't enough," "spend it now because tomorrow we may not be here"...."I WANT it now...." etc) We also have to realize that a "bill" is just money owed for something we want/need...nothing more, nothing less. Advance credit, in other words.
If we paid cash for everything, we would never have to worry about bills.
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