A Recession Or A Depression-You Be The Judge

[Marc Martyn]

They keep calling the economic situation a "Recession". I disagree. I call it a depression and here is why. According to Investopedia.com, they define the two as follows:
What Is a Recession?
First, let's take a look at recessions. There are two definitions of recession: one defines a recession as two consecutive quarters of negative economic growth, and the second (according to the National Bureau of Economic Research (NBER)) defines a recession as a significant decline in national economic activity that lasts more than just a few months.

How It Works
The growth of our economy rests upon the balance between the production and consumption of goods and services. As the economy grows, so do incomes and consumer spending, which continues the cycle of growth. However, because the world is not perfect, at some point, the economy has to slow. This slow down could be caused by something as simple as an oversupply, where producers manufacture too many goods. When this happens, the demand for those goods will drop. This causes earnings to slow, incomes to drop and the equity markets to fall.
Read more: http://www.investopedia.com/articles/ec ... z1Vgq3sjXN

What Is a Depression?
A depression is a severe economic catastrophe in which real gross domestic product (GDP) falls by at least 10%. A depression is much more severe than a recession and the effects of a depression can last for years. It is known to cause calamities in banking, trade and manufacturing, as well as falling prices, very tight credit, low investment, rising bankruptcies and high unemployment. As such, getting through a depression can be a challenge for consumers and businesses alike, given the overall economic backdrop. (To learn more, read The Importance Of Inflation and GDP.)

How It Works
Depressions occur when a number of factors come together at one time. These factors start off with overproduction and decreasing demand and are followed by fear that develops as businesses and investors panic. The combination of excess supply and fear causes business spending and investments to drop. As the economy starts to slow, unemployment rises and wages drop. These falling wages cause consumers to cut back spending even more, putting additional pressure on unemployment and wages. This begins a cycle in which the purchasing power of consumers is eroded severely making them unable to make their mortgage payments; this forces banks to tighten their lending standards, which eventually leads to bankruptcies.

Read more: http://www.investopedia.com/articles/ec ... z1VgqQ8DwQ

When are they going to stop sugar coating this and call it as it is.....a depression.

[MarkFromSea]

Well, definitions aside. Some individual folks and families, even communities, are experiencing a depression while at the same time some individuals are status quo or prospering. At the same time that unemployment went up, prices of every day items of usage sky rocketed, gas and groceries.

I'm an owner of a small residential heating and A/C company. Family run and operated, 7 1/2 years in the business now with zero complaints at the better business bureau. The summer of 08 hit and we were spending as though it was a typical summer slowdown, entertainment, advertising, equip upgrades, ect. Came out of that summer 20k in debt but paid it all off by Oct. We hadn't been in debt since we opened in 04. We drastically eliminated non essential spending AND advertising. We brought in less money for a couple of years but were able to pay ourselves a little more since we made these drastic cuts. You can easily guess what happened. We were living off of our good name and previous customers. No advertising, to speak of, to bring in fresh customers. We participated in some of this stimulus stuff at the city and county level. It worked well to begin with then the companies that participated kept cutting their prices, to win the contract, to the point that it just isn't worth doing the work just to keep the lights on at our company and put little to no money into our pockets. We had a nice run for a while. It's back to the boats for me! I'm looking forward to the new adventure of working for someone else whether it be in the Gulf of, AK or Mexico, or one job I'm looking at is in Samoa. All of it is petroleum related this time since we won't lose our thirst for it in my lifetime. Recession or Depression, doesn't matter to me, a company that I helped build looks like it's headed for the horizon.

PS..... It's ALL Good cause I caught a hell of a lot of fish this year!!!!!!!! LMAO

[knotabassturd]

Marc- I'm with depression.

Why?

I got home from work last night in the middle of a 12 day workweek. Started rummaging in the garage to put a couple fishing items in the trunk to jump out and go in the AM.

Then I go inside the house.

The Mrs is up waiting for me, gives me a nice piece of smoked salmon. Then she says there's a change of plans. I can't fish in the AM cuz she's gotta go volunteer for a difft temple so has to leave early and I stay home with our daughter until work.

While I love hannging out with my daughter, going from a planned fishing excursion to becoming morning babysitter before work in the midst of a long work week is... Well... That's definitely depression sir when you are itching to get after fish like I am and in the midst of the pink run.

Went from coming home tired from work but totally happy and smiling thinking of the next morning's fishing and how fun it was a few days ago catching a few before work with nate on the river, fiddling around in the garage a few minutes with that perma grin even after work, then walk into a nice wife handing me a great tasting piece of smoked salmon. Perfect world. For a few seconds.
Then it was sudden depression.

Ahhh well, she says I can go out before work maybe tomorrow. My body is getting too old though for this sleepless stuff followed by let down followed by hope and constantly stuck in loooong work weeks.

As far as economy, I don't know about that stuff. But hey I am working plenty so guess that is good? Will probably end up thanking the Mrs if things do get that rough.

But for now I sure envy those guys living out of their cars with fishing equipment living the life fishing every day.
Well actually I think Matt lives out of his boat. That's even better. Maybe trade fish for fuel.

PS: on a serious note and on topic without "whining old man schtick" LOL- my parents were kids in the depression and my Dad remembered it pretty well (moved something like 20 times in a couple years drifting and getting booted from place to place). If you asked them (Mom passed a few years back), they'd say this is not a depression. My Mom talked about friends coming to stay at their house for extended time, converting the dirt crawl space into a liveable place to sleep people (California), inviting people off the street to sit down for a meal sometimes, etc.
At least around here and from what I'm seeing, this is NOTHING like the Depression they described but guess that is a bit anecdotal since it was just thru the eyes of 2 parents.

Hope all out there are doing well! I'll get my time on water and fish soon enough:cheers:

[Marc Martyn]

Ya, fishing is great. Been doing it for over 50 years. However, now I have come to the point that when my bills are paid, there isn't much left to spend on fishing, let alone gas to get there.

Yes in many ways the Great Depression was much worse. But, if you take away the systems we have in place today that we didn't have in 1929 (unemployment insurance, Medicaid, Medicare, welfare, state industrial insurance and disability insurance) what are you left with, a very large group of citizens who are in great need.

So, here are to different perspectives. Can't go fishing because you have to baby sit or can't go because of no work and can't afford it. Want to trade?

['OL GREY DOG]

yep.. nothing like "THE BIG DEPRESSION".... but it aint over yet!!!!...

in another thread i talked about "shoes drop'n" and such ... well suppose one did drop !!! .. or someone got hit in the head with some tackle or some such .... and things got REALLLYY BAD ??.. even for a few weeks/days ... how long would it be ya figure ? ... before the US looked like the streets of London ???...

[Marc Martyn]

There are some very eerie simularities between now and then.

http://www.pbs.org/wgbh/americanexperie ... -timeline/

[knotabassturd]

Good points Marc.

Part of my problem is trying to convince someone (that was born and raised thru her 20s in a country where it'd be stupid to waste time fishing unless it made money) that fishing is a great pastime.
So I don't get very far with the "it is entertainment" idea LOL.

Guess I should count the blessings to be able to get out some during peak runs. And it certainly aint bad spending time with the little one before work.

DOG- if those shoes start falling from the sky maybe I can sell fishing as a way to feed the family

['OL GREY DOG]

i'm dig'n out the 'ol hard hat and safety glasses... oh and buy'n some more exrta ammo

[natetreat]

Good points Marc.

Part of my problem is trying to convince someone (that was born and raised thru her 20s in a country where it'd be stupid to waste time fishing unless it made money) that fishing is a great pastime.
So I don't get very far with the "it is entertainment" idea LOL.

Guess I should count the blessings to be able to get out some during peak runs. And it certainly aint bad spending time with the little one before work.

DOG- if those shoes start falling from the sky maybe I can sell fishing as a way to feed the family

Yea, that's a shame that you're not going to get to go out before work as much, but time spent with the the little ones is good too! They grow up fast.

I'm in the middle of the road here, we are trying to make ends meet, but I can go out close to home enough to keep me busy.

Back on topic, It's a recession headed for a precipice. If things don't turn around we will lose more jobs, GDP will plummet, credit is already tight and foreclosures and bad business is leaving a lot of empty buildings and abandoned lots in my neighborhood. Coming from the bottom, I know we'll be okay with what we have, but a lot of pepole are not so lucky. As the rich start hording, the rest of us will struggle and jobs are gonna be hard to come by, especially for those in service and production fields. It's not looking good and we're already pulling our belts tighter at home. We eat fish half the week because for the price of a few leaders and corkies we have food for a month. My wife just took a pay cut at one of her jobs, and it's been harder for me to find clients so I'm taking up portraits and photography gigs. For people without other skills to fall back on like me, and those that haven't saved any money it's going to be really tough.

[natetreat]

Oh and Knot - If you can't make it out enough to get your fish, just let me know and I'll send some your way.

[Marc Martyn]

It is a very difficult situation to wade through. I believe that the underlying problem with much of what is going on is FEAR. Banks are afraid to lend, businesses are afraid to hire or expand and the consumer is afraid to spend. People who have jobs are afraid that they may lose it. I am just as guilty of this as everyone else is. I have postponed trips to see my daughter in Boise because I am afraid to spend the extra money. Not having steady contracts coming in, I have tightened up my belt and spending as little as I can. This includes gas for fishing trips.

I think what we are hearing now is a gigantic sucking sound of people and businesses pulling money out of the economic system. For instance, Skipper Bill's in Spokane. Bill was a respected and successful business man for over 3 decades. As people refrained from recreational boating, his business dropped off. He weathered it for a couple of years and finally decided to close his business. This left his employees without jobs, who themselves cut back on their spending. It is a vicious circle and the ripple effects reach out very far.

So, what will it take for someone to walk out on that ice and take a chance. To stand out there and say to the people on the shore "It's o.k., you can come out". Once businesses do that, then maybe more will follow. Then maybe we will see some confidence and things will start to turn in the opposite direction. But then again, that is a risk not many businesses want to take.

[returnofthefish]

Recession or not, Im glad people are willing to pay more to have thier car serviced at a dealership. Im working on 80-100 cars a week just in my stall alone. Im glad to have a job.

[Marc Martyn]

Recession or not, Im glad people are willing to pay more to have thier car serviced at a dealership. Im working on 80-100 cars a week just in my stall alone. Im glad to have a job.

That brings up an interesting point. Are people keeping their cars longer and doing the repairs on them? It doesn't take a high credit score to repair a car, but it does to buy a new vehicle.

[knotabassturd]

Beyond people going 'Gee lets spend more money', we sure could use something to improve worker productivity and such like the internet did.
If overseas consumers that are enjoying higher paying jobs can get to more leverage (thru loans) then their spending could help too. But it is still mostly US consumers with the govt chipping in a chunk.
Problem with more US consumers going let's spend more is most consumers are middle class. These are in large part consumers that have seen their equity cushion plummet in terms of home value (those that owned). When you dry up that much money across that many people/homeowners you HAVE to cut back spending unless you want to swim in debt. Oh ya, we already are. Guess that's what happens when TV markets to kids and we get into the merry go round system of chasing the Joneses and don't offer common sense investing/saving classes as requirements in our Jr High and High schools.

I for one fish like a homeless man and am doing my part to be frugal and stay out of debt $5 rod from Gringo Pescador, using the OLD mono line off those gross old rods 'n reels I bought last year for $10 (must be 20-30 year old line and 25 pound test LOL, just ask nate how it casts with the 1/8 ounce egg weight the drift required for a 'good' drift). The reel has good drag system, have to have that to get fish in. Although the bail clicks shut when in a certain position so get a few "%^&$" comin' from me on the river. With that mono I figure if'n I accidentally lip a king or worse tailhook it, I can still avoid having it spool 50 feet of line on me[blink] before I tell that fish 'uh-uh, gimme my line back'.

I need to fish!

Tomorrow AM me thinks. Hoping for LOTS of blood and guts. With 4 dead bodies to hand and skinless fish:pirat:

LORDY (uh sorry DOG)! Where'd I get this rant from? LOL apologies in advance for making some skilled people shriek in horror there.

Should be better tomorrow if I bring something back home.

What was the topic again? Sorry Marc ;) I nall sincerity it is very tough out there for a lot of people so I mucho appreciate the life I have.


PS- Marc VERY true on the fear thing and potential spiral. The big companies and people with all the cash are hording it and not wanting to put it out into the system with all the uncertainty of so many consumers/much of the economy up in the air (unemployment, debt, losing house, credit scores deteriorating, etc). And the govt ids pretty tapped out too with all its debt. Hard to figure a way to find gorwth with all that...

[returnofthefish]

Recession or not, Im glad people are willing to pay more to have thier car serviced at a dealership. Im working on 80-100 cars a week just in my stall alone. Im glad to have a job.

That brings up an interesting point. Are people keeping their cars longer and doing the repairs on them? It doesn't take a high credit score to repair a car, but it does to buy a new vehicle.

Overall,car sales have been slow compared to pre recession/depression times. The only time car sales was hot was when we had the cash for clunkers program. people are definitely keeping thier cars longer. Who wants to make payments for five years on a loan and not know it thier job is safe.

[Marc Martyn]

On what might be a bright side, Tripoli is in the process of falling to the rebels. I was reading earlier that if Gaddafi falls, oil prices may start to go down. Of course, this depends on if there is civil stability in all of Libya. I wouldn't put a lot of faith in that. We'll see.

http://online.wsj.com/article/SB1000142 ... 23086.html

[Toni]

I was thinking just the other day, before this thread, that we were in a depression and not recession. I know not to believe what the news says. You never hear about the % of people who are on unemployment that has expired. No, they say unemployment decreased.

I was just looking at where I am. I make more money than I ever have but have less to spend. In fact it is worst than the last so called recession when I had children to take care of.

[knotabassturd]

I'm sticking with recession for now.

Marc you bring up good points about systems put in place to avoid some of the drifting and homelessnees, etc that caught up so many back in the late 20s/30s. And maybe that is part of why things don't quite look as glum. The leverage allowed during that time period though even outstrips what many homeowners are/were allowed today. Think they allowed 95% leverage (borrow against) equity back then or something insane like that? Not sure, just going off what I thought I'd heard. You can do that kind of leverage on a home (getting tougher these days tho) but we don't have overnight shock drops like we can have in the equity markets.

The deleveraging of the housing market is more drawn out in part from the inherent illiquidity of the market (at least housing prices don't plummet 10% in one day LOL) and may be one way showing how things are 'different this time' compared to that tragic meltdown period.

Personally I think now is not a bad time to shop for property.

PS- I spilled salmon blood today so feel a bit more in control (whoo).

[Marc Martyn]

I'm sticking with recession for now. Personally I think now is not a bad time to shop for property.

Granted, it is a good time to be shopping for property, if you have cash:money: , a stellar credit rating:king: AND if the banks are willing to lend.

[knotabassturd]

Not like this is an investment thread LOL but I have been looking at Motorcar Parts America (MPAA) just a little bit with the whole DIY (do it yourself) idea supporting sales of some of their refurbished alternators. Might drop just a little of the IRA in it.


Not like the S&P 500 is going gangbusters. hmmm, I feel a potential DOG lesson coming on putting money in individual companies/stocks LOL. Maybe I should buy a little of the bling gold stuff instead.