financial crisis

[ProPain]

Over here the news these days is dictated by the financial crisis we're facing and the impact it will have on 'real' economy. Personally it isn't affecting me very much in the short run (I own just a little stock and my mortgage interest rate is fixed for the next 2 decades) but I do wonder what the impact will be the upcoming months economy wise. I'm thinking this will not just blow over and recession will strike us all.

[akots]

The worst can happen here IMO, is quite devastating. But really, we must look positively. So, may be 2-3 years of 10% inflation with no salary increase?

[Beam]

As far as I have experienced in the past this usually leads to cuts in investment budgets, which in turn leads companies depending on those to cut costs. With investment I mean something as simple as a fridge up to something as big as a multi billion development.

Something we haven't seen since Bretton Woods however is that the financial system itself is shaking like hell. And imo only when that is settled (or not) one can give a true answer.

[Shabbaman]

A recession is still not a depression. If the GNP doesn't grow but shrink (i.e. recession) this doesn't mean that much in itself. With investment banks not creating money out of nowhere the GNP will shrink anyway. If this "new" money isn't invested, this can indeed have some influence in the "real" economy. This would affect me, as I'm advising on the (im)possibilities of new investments (changes, expansions, new buildings etc.). But a lot of investments are long term projects to begin with, so it'd have to be a really long recession before it'd affect the company.

I hope.

[romeothemonk]

The good thing about the "recession" and credit freeze here in America is that people that are broke can't get money. That is really awesome!!
Without people with no financial skills getting there hands on money, we as a people are blowing less money frivolously.
I will have some updated posts in my forum later this week with some thoughts on the matter, plus my own personal solution. It will just take some time to put together.

[digger760]

They'll join the amish (not sure if that is spelt right) and be self sufficient

[mauer]

Originally Posted by romeothemonk

The good thing about the "recession" and credit freeze here in America is that people that are broke can't get money. That is really awesome!!
Without people with no financial skills getting there hands on money, we as a people are blowing less money frivolously.
I will have some updated posts in my forum later this week with some thoughts on the matter, plus my own personal solution. It will just take some time to put together.

Not necessarily the people that are broke can't get money. I use myself as an example. We have a savings account. Not a large savings account, but 6-8 months worth of necessities saved up (ie mortgage, car payment, electric, groceries).

We also have about $40K worth of equity in our house. How this affected (effected?, whatever) us, is that we had a line of credit established with Wells Fargo against that equity. Not that we've borrowed against, but that is available to us to borrow against. Anyways, Wells Fargo, who was unscathed by this "crisis", canceled our line of credit. We also have an average, of the three major credit reporting agencies, of about 715.

Also, my 401K has lost about $12K in the past 10 months. That's huge, about $2K more than I've actually put in (including my companies 50% matching input).

All this basically means is that if I get hurt and can't work, or one of us loses our job for whatever reason, we've got a measly 6-8 months to get things together. Any longer than that and we'd be screwed.

On a side note, my wife also works for Wells Fargo. She said that she hasn't been able to approve one single loan in about the last three weeks. That's big as well, cause she says she normally processes about 50-60 a week normally.