someone explain this economy shit

[IgnoreMe 5,000+ posts]

ok, supposedly we have a pretty shitty economy right now. my question is...how exaclty does it get this way?

i work on cars for a living and love it. of course ive noticed how slow it has gotten around the shop due to the "economy". what i dont understand is, how does it happen?

1) people are getting fired because companies are not profiting enough

2) people are not buying, because they are loosing jobs, so less profits for the companies

so my question is, if everything was ok 6 months (or whatever, this is just me talking here) how is it that all of a sudden people are simultaneously loosing their jobs and companies profits are dropping out of no where? when i compare my spending habbits from a while back...im spending the same amount of cash.

does my question make any sense? i dont know how else to explain it.

btw: no idiots please. im hoping flip or someone else makes a stop here to explain the shenanigans

Click to read more...

 

[mbaoo]

I dont get it either.

I dont get the stock market even more. How the hell does that work? How could it spontaneously crash?

 

[IgnoreMe 5,000+ posts]

I dont get it either.
I dont get the stock market even more. How the hell does that work? How could it spontaneously crash?

maybe its because we're both from SD? maybe all people from SD are retards?

 

[mbaoo]

Are you blonde hair and blue eye'd like me? lol

What part are you from?

 

[duece212 5,000+ posts]

When x percent of consumer spending is on credit and credit goes away, x percent of consumer spending goes away.

When housing prices inflate way above where they should be, it will eventually hit a peak and drop. The people that bought at the peak are now fukd and owe more than their house is worth, this is usually alot of people's main asset. Add in all the idiots that took mortgages they couldnt afford and got foreclosed on, now home prices drop even more, nobody has an "asset" in their home anymore. Banks now own a bunch of houses that aren't worth shit compared to the funds they loaned out on them, now they gots no moneys to give people credit to make the purchases mentioned above.

The market took big shits, Flip knows more about that, I just know that my 401k is eating dick right now, doesn't make me feel good.

Don't forget 4 dollar gas, people reeled in spending big time when they saw that rise. Luckily its gone back down but I don't think people are really driving anymore.

The global economy has been draining us of manufacturing, tech, etc jobs for sometime adding to unemployment figures.

I'm sure there are a million other things that brought us to the **** we are at right now...

 

[rippinitup7 10+ year member]

i've wondered the same thing. from what i know with my friends and family it seemed like gas prices had a heavy impact on their lifestyles. when prices got over $4.50 a gallon that's all everyone talked about. people were saying how broke they were because of it and how they can't afford their car anymore, didn't want to shop as much and so on. was it the cause? i dunno, but it surely didn't help things.

 

[DBfan187 5,000+ posts]

It's all Mannyb18's fault!

 

[duece212 5,000+ posts]

It's all Mannyb18's fault!

Fuk that guy!

 

[bamaboy 5,000+ posts]

i still do the same i have been doing

my southern *** idea is: with all the talk of economic downfall, people spend less on stuff they dont need, dont buy as much stuff therefore companies dont make as much profit, less demand causes them to downsize to stay alive, those workers lose thier jobs so now they especially have no income to purchase things, so with more people losing jobs, less spending on items, less profit for comapnies

with no idea of job security for alot of people, they dont invest in new cars or new houses etc

just a big loop of complicated stuff i imagine

need someone with more background in how economies work to explain

 

[DBfan187 5,000+ posts]

he can get you a cheaper house payment

 

[duece212 5,000+ posts]

he can get you a cheaper house payment

he's a super stuntin mortgage master

 

[mcsoul 10+ year member]

Basically a this was caused by a series of events.

The 2 primary events where the unsustainable gas prices

of a few months ago and the Sub prime mortgage crisis.

Both of which are brought to you by the democrats in Congress.

 

[alvitae 10+ year member]

I think Deuce got it about right from what I've seen. Earlier we had a tech stock bubble and it burst. Now we are suffering from the effects of a housing/credit bubble burst.

What has me worried is that in hard times earlier investors could flee to overseas investments and rebound.

Now thanx to the wisdom of our politicians, ie Bush, we have a global economy. If one sinks we all go down. Global recession ftl.

 

[James Bang 5,000+ posts]

macro micro.

 

[IgnoreMe 5,000+ posts]

When x percent of consumer spending is on credit and credit goes away, x percent of consumer spending goes away.
but how does credit go away? nothing has changed in the last 5 years for me. unless im misunderstanding you, which i probably am cause im tired as shit

When housing prices inflate way above where they should be, it will eventually hit a peak and drop. The people that bought at the peak are now fukd and owe more than their house is worth, this is usually alot of people's main asset.

i dont get this either. so what if the house is worth less? i would like to buy a house to have a house. i dont care what its worth. i care that i have a place that i "own" and would continue to make payments on it. i would think its like a car. your car is worthless in 10 years, but you still payed $35k on a $25k car with no complaints.

Add in all the idiots that took mortgages they couldnt afford and got foreclosed on, now home prices drop even more, nobody has an "asset" in their home anymore. Banks now own a bunch of houses that aren't worth shit compared to the funds they loaned out on them, now they gots no moneys to give people credit to make the purchases mentioned above.

i can understand this

The market took big shits, Flip knows more about that, I just know that my 401k is eating dick right now, doesn't make me feel good.

yea but how? why does it just "take a shit"?

Don't forget 4 dollar gas, people reeled in spending big time when they saw that rise. Luckily its gone back down but I don't think people are really driving anymore.

trust me, i wont forget spending $4.89 a gallon here in CA...but that didnt really change my driving habits to tell you the truth

The global economy has been draining us of manufacturing, tech, etc jobs for sometime adding to unemployment figures.

this i understand

I'm sure there are a million other things that brought us to the **** we are at right now...

^^^^