[quote=livinincali][quote=CA renter][quote=AN]DOW to 5K will mean recession worse than what we saw recently. Which means we’ll see housing price < than what we saw this last bottom and unemployment >10%. Yeah, that’ll be fun.[/quote]
Not fun, but entirely possible, IMHO. This is why the reflation of the credit bubble was such a bad idea. They encouraged even more speculation, which was the problem in the first place.
Should have let things settle back to normal after 2008, save for some real jobs programs, infrastructure, and energy-related spending. We were almost there, but then they goosed everything back to bubble levels again. Now, we have even more debt than we would have if they had let things fall, and we are in an even weaker position because people have been dealing with declining wages and using up their savings for so many years. Best to get bad things over with quickly instead of prolonging them for years or decades.
IMHO, we are going to be in a deep recession by 2016/2017.[/quote]
I tend to agree but I personally think the main street sector of the economy won’t be much worse off than if currently is if the stock market bubble pops. This time around the bubble isn’t employing many people (i.e. why the recovery has been so weak so far).[/quote]
I understand where you’re coming from, but the credit bubble is what triggered the crisis in 2007, and it’s still the main problem (basically, too much unproductive, speculative money sloshing around the globe looking for yield). IMO, that is the trigger, and while Joe Sixpack has been dealing with a recession since 2007, I think it could get much worse…for everybody.
Some would argue it’s been decades of recession for J6 as wages and/or purchasing power have been declining for vast swaths of the U.S. population since the 80s. It’s only credit, not wages, that has enabled many to sustain their standard of living, and it’s created the facade that all is well in our economy.
