Is our economy REALLY in that bad a shape?

Discussion in 'After Hours Lounge (Off Topic)' started by LanceJ, May 26, 2003.

  1. LanceJ

    LanceJ Producer

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    Or is it because so many corporations & individuals have become so greedy that the tiniest (but actually irrelevant) reduction in profits causes all these gloom-n-doom announcements? I personally believe this theory.

    Your thoughts?

    LJ
     
  2. Jed M

    Jed M Cinematographer

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  3. Gavin_L

    Gavin_L Second Unit

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    I think its not doing to well, work wise a lot of industry's are slow, hours rise compared years past.
     
  4. Jeff Kleist

    Jeff Kleist Executive Producer

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    I think this is going to end really badly
     
  5. Karl_Luph

    Karl_Luph Supporting Actor

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    For the economy to be so bad off, there sure is alot of construction taking place down here.
     
  6. Charles J P

    Charles J P Cinematographer

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    Economics does not have to inherently political, especially the way the original poster phrased the question. Is it really bad? Yes. Whats the cause? Cant say here. Is the tone the media is taking ("doom and gloom") everytime something bad happens hurting matters? IMHO, Yes. Thats about all that can be said here.
     
  7. Nick Sievers

    Nick Sievers Producer

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  8. LanceJ

    LanceJ Producer

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    For clarity's sake, let's keep politics out of this. Everyone knows who is doing what to whatever.

    Jed: if you don't mind, what did the "personal assets" consist of?

    Karl: I agree, there is a lot of construction going on down here also. Together with many brand-new leather lined SUV's running around. And plasma TVs are supposed to be one of the best selling high-dollar consumer products right now. SOMEBODY ain't hurting!

    LJ
     
  9. Karl_Luph

    Karl_Luph Supporting Actor

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    Good point Lance, Houston is growing like crazy, alot of people I know have bought new vehicles this past year,plus major electronics purchases, and homes. Sure, some folks have gotten laid off, but the smart ones got back out there and found another job. Some probably paying more, some less, at least they are working. Somt times I think part of the problem is, people think they are too good to do a certain type of job so they sit back and do nothing.
     
  10. Holadem

    Holadem Lead Actor

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    I am in the economy sucks camp, but yeah, not everyone is hurtin'. Just this sat night in NY there seemed to be more luxury cars rolling around than ever. Things aren't rosy per say, we desperatly need another engineer in my group, yet we have a hiring freeze right now. In the end, I dunno...

    --
    Holadem
     
  11. JustinCleveland

    JustinCleveland Cinematographer

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    Personally, I blame the "economic forcast" on the media... it's amazing, how they just keep seeing the negatives. And I speak as a news anchor myself... we can't make news out of positives.
     
  12. Michael Pineo

    Michael Pineo Stunt Coordinator

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    I think the economy is bad, but it could be worse. Personally, I went through two periods of unemployment between the beginning of 2001 up to May of last year. It was a bit of a shock considering how rediculously good things had been up until that point in the IT business. I think that is part of what makes things seem so bad now is that they had gotten so good.

    It has been kind of a mixed blessing for me. I am making $18,000 less per year than I was 3 years ago, but I was just finally able to buy my first home because interest rates are so low and the economy has actually brought New England real estate prices somewhat under control(relatively speaking). I do miss my old paychecks, and the work isn't as interesting (went from being a network admin to answering phones on a helpdesk), but things could be worse.

    MikeP
     
  13. Jed M

    Jed M Cinematographer

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    Lance, I was not factoring lower wages (ie, not keeping up with inflation) or the job market, I was basing my statement only on the stock market. If somebody is heavily invested in the stock market they have significantly lost. In 4 years the DJIA has decreased about 40%; that is not a good sign. The scary thing is, 30% of that decrease happened in 4 short months last summer, starting in March and bottoming out in July. In the last 3 years the NASDAQ has dropped about 75%. That is why everybody is so on edge right now and paying extra attention to tiny reduction in profits because if it drops another 30% overnight like it did last summer, we will be seriously close to a depression. I am not a gloom and doom prophet, in fact, the DJIA is back to the mid 8,000's so it is getting better but perhaps if the economy was doing better they would be selling enough plasma's that they would cost under a grand by now? I did not say that I can't afford a plasma, or that I don't drive a nice car, its jut that regardless, the economy has suffered more than a tiny or irrelevant amount.

    The DJIA and NASDAQ are just averages, some people lost 2%, some people nearly lost it all, depending what you invested in. I happened to make out very well since the only tech stock I owned was Intel and thankfully didn't own Enron like my dad, but I was using 65% as an example of somebody who lost a lot. As you can see the number I chose is higher than the DJIA but its below the NASDAQ average, but if I was looking to be extremely accurate I should have said the average investor lost 50% in the last 3 and a half years, which I would consider a large chunk of change.

    The economy definitely is not hurting out here as well. We are still the fastest growing city, not to mention State, in the U.S., so the job market is prosperous. Besides, the way people throw money around in this city the DJIA could go into the negatives and I doubt this place would notice. [​IMG]
     
  14. Brian Perry

    Brian Perry Cinematographer

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    In my opinion, if you have a job, the economy is in good shape. (If not, it sucks.) If you were smart/lucky enough to avoid the stock market bubble collapse, you're in good shape. (If not, hopefully you're not close to retirement.)

    Mortgage rates are at their lowest point in forty years. Short-term rates are getting close to zero. Inflation is non-existent. Gas prices, adjusted for inflation, are ridiculously low.
     
  15. Ashley Seymour

    Ashley Seymour Supporting Actor

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    Sounds like one of those questions you ask around the frat house so you and your brothers have something to do - and drink - before you have to gover to the sority house to pick up your dates.

    You much emphasis do you place on REALLY bad? We are in a mild recession and may have already come out of it. Unemployment is around 6% which is not good, but not as bad as several recessions over the past 100 years.

    What do economists think of the rest of the decade? One thinks we are in a muddle through economy. Steady, but unspectacular growth under 3%.

    The stock market? Still overvalued. Even after the bid decline from 11,000 or so on the DOW to 8,500 now, the PE ratio of stocks is still in the 20's. High even for the type of bubble market we hit in the late 90's. PE ratios tend to come back to a norm of around 15. When they are way down to 8 or 9, then stocks are a great buy, even though the mood is so bad no one thinks stocks will ever rebound- like during the Depression. If earnings continue to muddle along over the next ten years and the PE Ratio of stocks trends town to 15, then the DOW, S&P, NASDAQ could still be where it is today, in the mid 8,000 range. It won't, because it will bounce around quite widly over this time.

    Your investment advisors will tell you not to do this, but over the next ten years, you had better get good at stock picking. Holding an index of stocks will give a pretty crappy return. Better to look at real estate, gold, some quality stocks. Bonds might be ok, but if interest rates go up, these will get hammered.

    Investors who bought a basket of stock ten or twenty years ago are not so bad off. If you invested at the top of the market four years ago, of course you are about wiped out. That has more to do with the individual making a poor investment decision than with the economy.

    One fear the FED has for the next 10 years is deflation. We get used to it when that HD tv we were looking at a few years ago for $7,500, came down to $4,500, then $2,500 and now below $2,000. For the overall economy, the prospects are more ominous though. Not only can prices go down, but also wages. Plus even though home interest rates have fallen, how would you like it if your home went down 1% a year? On the plus side, some economists predict that even with a muddle through economy, that home values will still trend up at 2% or so a year. With the FED agressively trying to stimulate the economy and affecting money growth, that cash has to go somewhere. If not in stocks, then in to housing value.
     
  16. AjayM

    AjayM Screenwriter

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    The economic indicators actually don't show a decline, it also doesn't show much of an increase as well. I think the general population thinks we are much worse off than we are, mostly thanks to the media.

    If you factor out the "bubble" that happened for a few years we are right about where we should be considering post 9/11. The bad side is that it's hard to take that out of the equation when basically we were all doing very well.

    Andrew
     
  17. Malcolm R

    Malcolm R Executive Producer

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  18. Jason L.

    Jason L. Second Unit

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    Some points:

    1. The primary goal of a business is to maximize profits. Greed has nothing to do with it. This is nothing compared to the robber barons. Businesses have to be more cut-throat today becuase the global environment is more competitive.

    2. The performance of the economy and the performance of the stock market do not always correlate.

    3. The unemployment rate is only 6.0 %. In 1982, it got as high as 10.8 %. When I was in college [early 90's], we were taught that there would always be a segment of the population that would be unemployed due to certian factors, and that an unemployment rate of 5 % would be "full employment". We're only a blip above that.

    4. If you think the U.S. stock market has had a rough time, check out Japan. The Nikkei was at 39,000 back in 1990. It closed yesterday at 8,167.

    5. Let's face it - there were a LOT of people who were very, very, overpaid during the boom. Help Desk people making 50K a year, layers of management with no real function, excess capacity in markets chasing too few customers, $1000 office chairs, foosball tables, maseusses on staff, catered lunches, etc.

    As Americans, we love to whine about everything. That just shows how good we have it.
     
  19. MikeAlletto

    MikeAlletto Cinematographer

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    Economies do these kinds of things. The economy was out of control and really good years ago but then everyone woke up and realized all those dotcom businesses without any kind of business plan really weren't that good of investments. So companies started disappearing. They tried to expand so quickly they burned through so much money so quickly and didn't make any money that they killed themselves. Now that the dust has cleared (and I believe it has cleared somewhat), things will slowly return to normal.

     
  20. Allen_Appel

    Allen_Appel Second Unit

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    I need something explained. When investors say they lost "X%" of their investments, how is that measured? Is that a loss on the highest price the stock commanded, or is it a loss on the price originally paid for the stock?
     

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