Alarming News

September 26, 2008

Audience participation poll

Joseph Weisenthal, who does the awesome blog The Stalwart, asked on his facebook profile the other day: “Financial market gyrations aside, does anyone else just *feel* like the real economy is slowing. I can’t quite place my finger on it…”

The truth is, despite living in New York City, with a boyfriend who works in finance, I don’t actually feel the economic downturn yet. Please don’t get me wrong, I’m in panic mode just as much as anyone else because, well, there’s a panicked feeling in the air. But the reality? I don’t know anyone who has gotten laid-off (yet). It’s still hard to get a cab when it’s raining or rush hour. All the best restaurants are still booked up every Friday and Saturday night for weeks. Fifth Avenue is still filled with shoppers and Bergdorf and Saks are crowded. I stopped by the Hermes sample sale the other day and the line was down the block. All my freelance friends are currently employed. Again, the last thing I want is to sound flip. These are dark economic times, it’s true. But are y’all actually seeing this or just hearing about it on TV?

Posted by Karol at 02:13 PM |
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Cable is still on. Life is good.

Posted by: Casca at September 26, 2008 at 2:36 pm

, I’m in panic mode just as much as anyone else… Hmm…taking cabs, making reservations at the best retaurants, shopping on fifth ave and “stopping by the hermes sale” yep, that’s EXACTLY how America panics.

Posted by: Not Dawn Summers at September 26, 2008 at 2:50 pm

According to the Rooster, he has seen a slowdown in the restaurants in NYC. I don’t see it in the Midwest, but then again I think it is a case of people continuing to live beyond their means.

Posted by: StB at September 26, 2008 at 2:54 pm

Well, I’m panicked that my lifestyle will end (for the record, didn’t buy anything on Fifth or anywhere in a long time).

Posted by: Karol at September 26, 2008 at 2:55 pm

Phil Gramm was right, but many Americans are stupid enough to wring their hands and say, “Woe is me!” Couple that with the mainstream media loving to create an economic downturn during presidential elections, just like in 1992 when the recession had ended in March 1991.
Some 20-something idiot was on the Times Square shuttle yesterday, begging for handouts, saying she “just got laid off, and times are really hard right now.” She appeared decently dressed and had a purse slung across her shoulder, so why should I give her a goddamn dime? There are plenty of jobs out there — she just needs to swallow her pride, as I’ve had to do in the past, and take something less than her dream job.
Then she revealed her moonbattery: “We should fire Bush!” I had to catch my train, so I didn’t bother pointing out that, uh, Bush won’t be president much longer, notwithstanding he’s hardly responsible for this so-called “slowdown.” We should call it “Chris Dodd Syndrome” to call this a “second Bush recession” when, in fact, there still isn’t a second one now, and the first was inherited from Clinton.
Some months back, I read an AP article talking about Americans having to sell things “to make ends meet.” You know, designer jeans, luxury handbags, all sorts of things that they blew money on, rather than saving money for a rainy day. One woman said she had to part with her grandmother’s $6 teakettle. Couldn’t she have flipped burgers for a couple of hours, instead of eBaying it?
Well, there are certainly areas that have been really hit hard, but in that case, you have to move to a new place. It’s not a “right” to have taxpayers pay for “stimulus” programs so you can keep your place and stay in the job you want. After I got laid off from two consecutive dot-com jobs, I moved cross-country and made the best of it.

Posted by: Perry Eidelbus at September 26, 2008 at 3:03 pm

Try asking the same question in six months time or a year. The mess in the money markets will take time to trickle down. The hope of the U.S. government at the moment is that their action this weekend will prevent a full knock on effect for the rest of the economy. If it fails that’s when you see the boarded up shops, for sale signs and have unemployed friends fretting about where the next job is coming from. Unfortunately the economy is undisciminating and would not just punish those who created and fuelled the mess (from the low grade borrowers to the companies that rated the debt incorrectly).
Even if the rescue package suceeds a whole can of worms has been opened up. For example, how do the government back out if things start to stabilise when they have effectively just rewarded stupid levels of risk?
Given the U.S. Government’s reaction, the threat of almost unprecedented downturn is certainly a real one.
No need to panic. It’s just a different set of circumstances offering different opportunities!

Posted by: Urbane McMeercat at September 26, 2008 at 3:15 pm

I’m still waiting for the housing crisis to hit New York so I can find an affordable place to live.

Posted by: Marco at September 26, 2008 at 4:00 pm


It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.


My favorite opening line from my favorite book. It fits what I see perfectly.

Posted by: Eric at September 26, 2008 at 4:11 pm

I agree with the above commenter: “Cable is still on. Life is good.”

Posted by: Joseph Weisenthal at September 26, 2008 at 4:43 pm

Try asking the same question in six months time or a year. The mess in the money markets will take time to trickle down

Gee, I thought trickle down was a reich whinge myth?
FASCIST!!!!!!!111111 ;-)
I think most of what you wrote is right though. The key is to make as much of this lein money interest bearing loans with as much collateral as realistically possible.
One thing this whole mess has shined an enormous light on which will benefit us in the long run – political correctness is an insidious disaster which has infected us and has the potential to destroy us. There were many culprits in this disaster but none more than the mindless edict that a big percentage of loans HAVE to go to people almost certainly unable to pay back. These freaks put us in huge danger just to give the illusion of not being racist of classist.
Absolute insanity.

Posted by: Radical Redneck at September 26, 2008 at 6:25 pm

“I’m still waiting for the housing crisis to hit New York so I can find an affordable place to live.”
Waiting for the same thing in a different city.
While housing prices may fall I don’t think that they will crash.
Every day I excrete from my arse a substance. A substance every bit as valuable now as some investments that Moodys and the like where rating AAA not much more than a year ago. Whilst metaphorically speaking I do shit the odd brick, alas, I can’t perform the same trick with real estate.

Posted by: Urbane McMeercat at September 26, 2008 at 6:31 pm

“I’m still waiting for the housing crisis to hit New York so I can find an affordable place to live.”
Waiting for the same thing in a different city.
While housing prices may fall I don’t think that they will crash.
Every day I excrete from my arse a substance. A substance every bit as valuable now as some investments that Moodys and the like where rating AAA not much more than a year ago. Whilst metaphorically speaking I do shit the odd brick, alas, I can’t perform the same trick with real estate.

Posted by: Urbane McMeercat at September 26, 2008 at 6:32 pm

New York so I can find an affordable place to live.”
Waiting for the same thing in a different city.
While housing prices may fall I don’t think that they will crash.
Every day I excrete from my arse a substance. A substance every bit as valuable now as some investments that Moodys and the like where rating AAA not much more than a year ago. Whilst metaphorically speaking I do shit the odd brick, alas, I can’t perform the same trick with real estate.

Posted by: Urbane McMeercat at September 26, 2008 at 6:35 pm

Well, I’m seeing the downturn when I look at the value of my investments. Gas prices have fallen a lot recently, but everyone I know was talking about the price of gas when it was over $4 a gallon, and people were deciding not to drive or to stay close to home. On the other hand, Dodger games are sold out. People still have money for entertainment.

Posted by: KS at September 26, 2008 at 8:11 pm

I was laid off from Citi in 2007. I was out for 4 months before I found a new gig. Last month I had lunch with a former Citi colleague who still hasn’t found something after almost a year. Just yesterday I had lunch with a friend who got laid off from Bear Stearns in the spring and is still looking. I know a handful of other former colleagues from various past jobs who have lost their jobs over the past year or so, although most of them found something else. So yeah, it’s real to me. Still against the bailout.

Posted by: Jim Lesczynski at September 27, 2008 at 12:48 am

The only thing I’ve really noticed, is that apples have gotten really expensive. I buy five apples every weekend, like clockwork, and they cost $8 now. That’s over $1.50 per apple. Madness.
But otherwise, yeah, the internet still works. Whatever.

Posted by: Tanya at September 27, 2008 at 12:04 pm

I’m in SoCal, a housing bubble hotspot. Things have been weird for a while. In July:

Eerie, isn’t it? You can sense that something’s wrong. You’re starting to see signs of desperation in a few coal-mine canaries: realtors, distance commuters, levaraged business owners, underwater home buyers. Yet most of us are still going about our daily routines as if nothing has changed. It’s like the opening scene in a zombie movie before all hell breaks loose.
I wonder if this is what it felt like in 1930.

Posted by: W.C. Varones at September 27, 2008 at 4:25 pm

Things were a lot worse in the 1930s IMO.

Posted by: bryan at September 27, 2008 at 6:15 pm

“I’m still waiting for the housing crisis to hit New York so I can find an affordable place to live.”
The real estate market has been hit. I know a couple of dozen people who have been hit and cant find new jobs in the industry – real estate brokers, mortgage brokers, title insurance people etc. The benefits havent trickled down to would be purchasers or renters because the market is frozen – banks wont loan to prospective purchasers, so homes cant be sold. The market is essentially comatose.
The only ones who have benefited are foreclosing attorneys and homeowners, who should have never gotten mortgage loans in the first place, and have new protections under NY law.
The government will end up rewarding Wall Street schmucks who made 6 figure bonuses by hawkin bad paper and people who bought homes they had no bidness living in bc they couldnt afford.
Who pays? The prudent, taxpaying person who didnt want to buy a house with absolutely no money down, didnt overextend themselves with a payment on a new Lexus.
More perverse incentives from Uncle Sam.

Posted by: Joey Almost Anonymous at September 28, 2008 at 1:02 am

Karol – you sound awfully like the pompous Manhattanites who in 1972 said (something to the effect of) ‘I didn’t think Nixon could win, bc I dont know anyone who voted for Nixon’.

Posted by: Joey Almost Anonymous at September 28, 2008 at 1:07 am

bryan, you couldn’t be more right. My father was 11 when things crashed in 1929, and what he experienced was nothing like what lazy Americans complain about today. Show me the American children who must sell fruit on street corners, not because their parents are worthless and lazy, but because there isn’t any work for them to find.
Hiring functions under the same principle of price as anything else: if no one is buying what you’re offering (an apple, a dress, a computer, or your labor), then you’re asking too high a price, or there isn’t enough demand for what you’re offering. There is work out there, maybe just not what people want. Should Congress have rescued dotcoms, two of which laid me off in 2000? Certainly not: the industry overextended itself, and the collapse was simply a correction of misaligned supply and demand curves.
Joey: not sure where you get that Karol sounds pompous. But I’ll tell you that this “bailout” is the biggest money grab in American history. I fail to see why MY tax dollars should “rescue” the executives and bankers who made bad investment decisions, pay for the homes of irresponsible borrowers who likewise don’t want to accept the consequences of their bad decisions, or hire the services of “community activists” who will reap untold $$$ in “counseling” subprime homeowners.

Posted by: Perry Eidelbus at September 28, 2008 at 3:43 pm

How an unemployed black man in Alabama sitting on crumbling porch becomes a High Grade Structured Enhanced Investment Fund.
http://www.youtube.com/watch?v=mzJmTCYmo9g
Perry, I think that Joey was eluding to the fact that the experience in NY is different from the rest of the U.S. and doesn’t make an accurate barometer for the whole country
“The only thing I’ve really noticed, is that apples have gotten really expensive. I buy five apples every weekend, like clockwork, and they cost $8 now. That’s over $1.50 per apple. Madness.”
That’ll be the price of oil causing the rise – relegated to a secondary concern at the moment.

Posted by: Urbane McMeercat at September 28, 2008 at 6:19 pm
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