Tonight's "The Big Idea" - Lowered Expectations with Jim Cramer

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[quote author="no_vaseline" date=1224314725][quote author="skek" date=1224296118]I have faith in America, and frankly, I think the current economic crisis will probably go a long way to restore the good old-fashioned American work ethic that seems to have fallen out of favor lately.</blockquote>


I think you underestimate the corrosive nature of "lowered expectations".</blockquote>


FWIW (i.e., nothing), the hubs and I were discussing this the other night. We know a fair number of people right now who we would consider "affluent," and not just "mass affluent." That said, much of their net worth is in real estate, stocks, a small business, etc. Depending on how badly the economy tanks and in which sectors, they could fall to upper-middle or middle class. I don't wrap too much of myself around "stuff," so mentally for me it would suck seeing fewer zeros in my bank account, but be generally ok, as all I would compromise are a few dinners out. But these folks we know have varying degrees of the SoCal Pathology, and mentally, I think it will hit them hard.



The other people it will certainly hit hard are those who were at the margins to begin with: The Crate & Barrel delivery guys, the nail salon ladies, waiters and waitresses, baristas, retail workers, etc.



My other concern is where capital will come from for people who want to start their own business.
 
[quote author="annuitypro" date=1224324326]This is just a cycle, we American's are resilient and I guarantee you all, we will as a nation bounce back.</blockquote>


1969 was a cycle.



1973 was a cycle.



1981 was a cycle.



This will be, most certainly, not your average cycle.
 
[quote author="no_vaseline" date=1224236001]My least favorite program on CNBC - "The Big Idea with Donny Deutsch" - had my my second least favorite CNBC personality (although most entertaining) - Jim Cramer tonight.

</blockquote>


no vas and I have something in common.



I am hoping that the next generation will learn that credit is not capital. Creditalism caused the present mess, not capitalism.
 
[quote author="no_vaseline" date=1224327022][quote author="annuitypro" date=1224324326]This is just a cycle, we American's are resilient and I guarantee you all, we will as a nation bounce back.</blockquote>


1969 was a cycle.



1973 was a cycle.



1981 was a cycle.



This will be, most certainly, not your average cycle.</blockquote>


Concur with you both. While it is a cycle, I think the last down cycle that should have happened was suppressed, thus leading to a much larger downward cycle than we have seen lately. Will we bounce back? Of course. Do we have a choice? Will there be suffering? Yes. As a labor baby, I am well aware that there is pain and suffering even in normal down cycles.



And sorry for the somewhat O/T question: Who here was <em>not</em> brought up by parents in <a href="http://en.wikipedia.org/wiki/White_collar">white collar</a> professions?



<em>*Raises hand and shouts out, "<a href="http://en.wikipedia.org/wiki/Blue-collar_worker">blue</a> and <a href="http://en.wikipedia.org/wiki/Pink_collar">pink</a>!"*</em>



I'm not trying to be nosy, but I suspect our varying perceptions of this downturn might be based on our varying life experiences.
 
I'm taking a hiatus from this board. The Sky is Falling around this forum, as if the economy will never recover. It's getting a bit ridiculous.



I am not in denial of the dire straights we are in, and I acknowledge it will last well through 2009 and even 2010, but shit, some of you make it sound like we are turning into a 3rd world country. It will be tough for everyone, for sure, the rich, the not so rich. And it seems as if you all take pleasure (and for some reason still exhibit surprise) at all the listings in this market. What do you expect, that no one will be buying and selling in this market? People need to live, and people need to sell for whatever reason. I really do hope that many of you are millionaires here since you all have the crystal ball. If not, this is just another place of theoretical exercise.
 
[quote author="JLegend" date=1224379716]I'm taking a hiatus from this board. The Sky is Falling around this forum, as if the economy will never recover. It's getting a bit ridiculous.



I am not in denial of the dire straights we are in, and I acknowledge it will last well through 2009 and even 2010, but shit, some of you make it sound like we are turning into a 3rd world country. It will be tough for everyone, for sure, the rich, the not so rich. And it seems as if you all take pleasure (and for some reason still exhibit surprise) at all the listings in this market. What do you expect, that no one will be buying and selling in this market? People need to live, and people need to sell for whatever reason. I really do hope that many of you are millionaires here since you all have the crystal ball. If not, this is just another place of theoretical exercise.</blockquote>


Don't leave, I'm still sane. I agree, theres a little too much "The End of the World is coming" from certain posters. I can feel a lot of bitterness towards the excesses of capitalism. A lot of people on the forum are angry of how things went, so they think the best way for them to feel vindicated is if everyone is punished.



Will it be bad? I don't know. In 2001-2002, I was just starting to get into the world of programming. I had plenty of work for a decent wage during the last big popped bubble. My family seemed to do fine too. To me it seems like the people who are going to get hit ard are the ones living beyond their means. I don't see the dollar becoming worthless and america becoming a third world country.
 
I started my new job in Huntington Beach three weeks ago and the most common thing people have spoke to me about, as well as the hallway chatter, is housing and have I bought a house yet. I agree with IR that the general public does not have a grasp of what is to come.



I would guess 70% of my co-worker?s opinions are that local real estate has already fallen as much as it is going to and I had better buy before the imminent rise in prices. I truly don?t know how to respond to this and not alienate my new coworkers. I have gently asked a couple of people what they think about paying $700k+ for a house and both responded that you <em>?don?t really pay for the house, you just need to get a loan, that is the difficult part?</em> ?? Does anyone in OC actually plan on paying for their house?



I was well prepared for the price, or sticker shock if you will, of housing in OC. However, I seem to have little in common philosophically with my coworkers as I learn their perspectives. I wonder how their attitudes will change over the next two years.
 
I work in an automotive related industry.



Last year they sold 18 million cars in the US. This year is on pace for 12. Next year the expectation is for 11 - and keeps getting revised downward. These folks weren't making a killing to begin with.



The only logical conclusion I can come to is I expect 1/3 of my customers to be busto in the next 12 months. This is not new territory for me (see the 1980s Farm Bust comment I made earlier, where 1/3 of my neighbors went out, and they weren't living beyond thier means).



The mortgage brokers, realtors, and other high flyers blew out 12 months ago. Now the working class drones are the ones who are going to get pounded.
 
[quote author="ConsiderAgain" date=1224381185] I truly don?t know how to respond to this and not alienate my new coworkers. </blockquote>


Lie to them and tell them you've been looking, but it's hard to find a home that has your:



- specs (single story, five story, whatever)

- location (santa ana is ok, parts of Tustin, two zip codes in Orange, but that shithole Villages of Columbus NEVER)

- features (if it's got a pool, I don't want it, 7000 sf lot)

- condition (personally, I hate pergranteel and the shit quality 'shave and a haircut' remodels that were so prevelent over the past 5 years or so)



and then comment how you are frustrated because prices are so attractive these days.



It's what I do. It makes it easier, plus they likely won't get the scarcasm.
 
[quote author="no_vaseline" date=1224381820][quote author="ConsiderAgain" date=1224381185] I truly don?t know how to respond to this and not alienate my new coworkers. </blockquote>


Lie to them and tell them you've been looking, but it's hard to find a home that has your:



- specs (single story, five story, whatever)

- location (santa ana is ok, parts of Tustin, two zip codes in Orange, but that shithole Villages of Columbus NEVER)

- features (if it's got a pool, I don't want it, 7000 sf lot)

- condition (personally, I hate pergranteel and the shit quality 'shave and a haircut' remodels that were so prevelent over the past 5 years or so)



and then comment how you are frustrated because prices are so attractive these days.



It's what I do. It makes it easier, plus they likely won't get the scarcasm.</blockquote>


That made me smile. I will try this to the degree I am capable of lying.
 
^^I hope you all realize we need the ignorance of the masses so that the housing market doesn't utterly collapse. If everyone read this board and realize they shouldn't be buying and selling, #1 we won't have new episodes of "House Hunters" on HGTV, and #2 things would be much, much worse. I think the tightened lending standards will weed out those who try to live beyond their means in this climate. If people buy now at higher prices, who cares. They lose money. Just as long as you're smart enough to avoid a similar fate. Nothing we can do about what happened in the past. I blame it on Bush. It's easier that way.
 
After reading some of the thoughts here I don't know if I should go bowling or kill myself. (Just joking)



If people really do believe that things will get so bad what are they doing as a fallback in the way of emergency stores and survival gear to be able to sustain life.



I am relieved not to be in an urban enviornment if things go down hill.



Maybe we should start a thread about preparedness for a minor or major breakdown of services such as cash, alternate ways to cook, water, food, transportation, and of course self defense.



Yea, I know, here comes the tin-foil hat and camo dude!!



Enjoy!
 
[quote author="xsocal land merchant" date=1224386434]After reading some of the thoughts here I don't know if I should go bowling or kill myself. (Just joking)



If people really do believe that things will get so bad what are they doing as a fallback in the way of emergency stores and survival gear to be able to sustain life.



I am relieved not to be in an urban enviornment if things go down hill.



Maybe we should start a thread about preparedness for a minor or major breakdown of services such as cash, alternate ways to cook, water, food, transportation, and of course self defense.



Yea, I know, here comes the tin-foil hat and camo dude!!



Enjoy!</blockquote>


<a href="http://www.cnn.com/2008/LIVING/10/13/depression.irpt/index.html?eref=rss_topstories">http://www.cnn.com/2008/LIVING/10/13/depression.irpt/index.html?eref=rss_topstories</a>
 
[quote author="ConsiderAgain" date=1224382278][quote author="no_vaseline" date=1224381820][quote author="ConsiderAgain" date=1224381185] I truly don?t know how to respond to this and not alienate my new coworkers. </blockquote>


Lie to them and tell them you've been looking, but it's hard to find a home that has your:



- specs (single story, five story, whatever)

- location (santa ana is ok, parts of Tustin, two zip codes in Orange, but that shithole Villages of Columbus NEVER)

- features (if it's got a pool, I don't want it, 7000 sf lot)

- condition (personally, I hate pergranteel and the shit quality 'shave and a haircut' remodels that were so prevelent over the past 5 years or so)



and then comment how you are frustrated because prices are so attractive these days.



It's what I do. It makes it easier, plus they likely won't get the scarcasm.</blockquote>


That made me smile. I will try this to the degree I am capable of lying.</blockquote>


You're not lying persay (I shouldn't of used the word), rather, you are giving them an answer they want to hear that doesn't necessarily contain the whole truth, particularly if the other party is in no condition to hear it.
 
It wasn't that long ago that myself and a couple others had predicted much of the present situation and we were called many condescending names.
 
[quote author="ConsiderAgain" date=1224381185]I started my new job in Huntington Beach three weeks ago and the most common thing people have spoke to me about, as well as the hallway chatter, is housing and have I bought a house yet. I agree with IR that the general public does not have a grasp of what is to come.



I would guess 70% of my co-worker?s opinions are that local real estate has already fallen as much as it is going to and I had better buy before the imminent rise in prices. I truly don?t know how to respond to this and not alienate my new coworkers. I have gently asked a couple of people what they think about paying $700k+ for a house and both responded that you <em>?don?t really pay for the house, you just need to get a loan, that is the difficult part?</em> ?? Does anyone in OC actually plan on paying for their house?



I was well prepared for the price, or sticker shock if you will, of housing in OC. However, I seem to have little in common philosophically with my coworkers as I learn their perspectives. I wonder how their attitudes will change over the next two years.</blockquote>


Just tell them that you are watching the foreclosures increase month after month, and you will be more interested in buying once you see a sign that they are on their way down. I have been told this usually shuts them up and their face shows signs of fear. The last down cycle proved this stat to be the bottom and I am confident it will again.
 
WestparkRenter



Very interesting article. I used to live in San Clemente near the San Onofre Power Plant and realized that there was only one way out if something happened to I-5.



I lived south of access to PCH.



I had found an escape route thru Camp Pendleton that would allow a 4 wheel drive vehicle to go thru the base and exit near Temecula.(yes I tresspassed on government property)



If there was an earthquake or mass exodus due to a problem at San Onofre I wanted an alternate way out of South County especially if I-5 was jammed.



The ability to survive for several days in ones home is not unrealistic. What if there was a problem that caused the power grid to fail and you couldn't get money from the ATM, gas, and your freezer/refidge was off for several days.



Densely populated areas like Mission Viejo, Irvine, Laguna Niguel, and NB would become very interesting, to say the least.



Bix would survive with his Thompson.



Enjoy!
 
[quote author="xsocal land merchant" date=1224403853]WestparkRenter



Very interesting article. I used to live in San Clemente near the San Onofre Power Plant and realized that there was only one way out if something happened to I-5.



I lived south of access to PCH.



I had found an escape route thru Camp Pendleton that would allow a 4 wheel drive vehicle to go thru the base and exit near Temecula.(yes I tresspassed on government property)



If there was an earthquake or mass exodus due to a problem at San Onofre I wanted an alternate way out of South County especially if I-5 was jammed.



The ability to survive for several days in ones home is not unrealistic. What if there was a problem that caused the power grid to fail and you couldn't get money from the ATM, gas, and your freezer/refidge was off for several days.



Densely populated areas like Mission Viejo, Irvine, Laguna Niguel, and NB would become very interesting, to say the least.



Bix would survive with his Thompson.



Enjoy!</blockquote>


I would be friend with a Mormon family. I've heard they have a year worth of food supply. :lol:
 
[quote author="xsocal land merchant" date=1224403853]WestparkRenter



Very interesting article. I used to live in San Clemente near the San Onofre Power Plant and realized that there was only one way out if something happened to I-5.



I lived south of access to PCH.



I had found an escape route thru Camp Pendleton that would allow a 4 wheel drive vehicle to go thru the base and exit near Temecula.(yes I tresspassed on government property)



If there was an earthquake or mass exodus due to a problem at San Onofre I wanted an alternate way out of South County especially if I-5 was jammed.



The ability to survive for several days in ones home is not unrealistic. What if there was a problem that caused the power grid to fail and you couldn't get money from the ATM, gas, and your freezer/refidge was off for several days.



Densely populated areas like Mission Viejo, Irvine, Laguna Niguel, and NB would become very interesting, to say the least.



Bix would survive with his Thompson.



Enjoy!</blockquote>


Heh. Been there - the natural disaster (Loma Prieta earthquake) and the road as well.



If you keep in your home the goods that you would need to camp for a week (e.g., tent, sleeping bag, propane stove, cast iron cookware (pan, dutch oven), canned goods, and water), you will likely be fine. Most people were so shell shocked by the experience that order didn't break down where I was at, and, in fact, it brought the neighbors (few of whom knew each other) together to get through the mess collectively.



On a different note, there might be some similarities between the continuing financial crisis and the Great Depression, but one thing that will make a huge difference is the FDIC. During the Depression (and beforehand), depositors assumed the risk of bank failures. In other words, if you were excellent saver, but Joe the town banker was speculative in his lending, you were screwed when the bank went belly up because your savings (and any other deposits) were long gone and you had no recourse. At least with FDIC insurance, the savings and other deposits of most people are guaranteed. (With the caveat that, yes, Congress could choose to not appropriate more money to the FDIC. While possible, I don't think it is probable.)
 
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