I live in the Nothwest where the economy has been better than many areas in the country, but things are not good for those of us on social security or on disability. Prices have skyrocketed on everything and our income has changed very little. I share housing with another disabled lady and we can’t even afford to shop at the thrift stores any more. We can’t afford to own a car and so depend on our caregiver to take me to the store and have medical transportation through the state government. Now all sorts of government programs are being cut or threatened with being cut. It’s very scary and we don’t know what we’re going to do as this recession gets worse. We are not able to buy anything beyond the bare necessities and those are being rethought- can we do without them. We saw this website on Charlie Rose last night and are thrilled to have this forum available. Thanks to you for having come up with the idea.

My annuity left me when my husband died thirty years ago is getting very thin because I have to use more and more just to survive. Most of my dollars go to endless insurance, property taxes and rising utility costs. Food costs are unreal I need a file clerk to keep track of the just ordinary bills. There’s nothing left for any frills. I don’t know how families can survive. We need price controls and gas rationing. My grandkids, with multi degrees can’t find a future in their chosen fields. I’m planning on a mini garden in order to eat. And I grew up in the depression and have lived through too many wars—but this economy is scarey. Young couples can’t afford homes and it takes two paychecks to keep going. That’s without having a family. Help!

Call me lucky….I live in Canada. I don’t worry about my healthcare because here we are all covered. I have Canada Pension as well as a small pension from work both are indexed to inflation. Only drive one car, live in a small mortgage free house, don’t eat out much and the kids are all out of the house and on their own. I really have empathy for the young families who are feeling the crunch right now but I feel priorities have all gone askew. Maybe we have to learn that we do not need a huge house, the latest expensive clothes, two cars, a boat and cottage..and every kid doesn’t need a cell phone.

I am a collector of antique French dolls. Prices are down at auctions. I saw a big drop from January Auctions 2008 to March Auctions 2008. Dealers are not getting the high prices they did just a few months ago. Merchandise does not sell nearly so fast.

We live in a suburb or Baltimore, MD. A small town when we moved here that has been growing, but slowly. We have a Main Street with many unique and lovely shops. We’re watching while that little bit of Americana disappears. The little shops that were here for so many years, can no longer afford to remain and have, one by one, been closing.

The dollar is down! Unemployment is up! The housing market is collapsing! The stock market is in the tank! Nobody can get a loan! We’re bailing out brokerage firms! Who wouldn’t be nervous? I was teaching a Securities Analysis class at UCLA when nearby Orange County declared bankruptcy. A student asked me to explain why. Another student quipped, “It’s too complicated.” I explained it within ten minutes, and not one student failed to understand it. The one who thought it would be too complicated said, “It that it?” Yes. This stuff is easy to understand when it’s explained in English. The Dollar The value of the dollar is down. The value is measured against other currencies, though. That’s good news and bad news. Good news is other countries can buy more of our stuff. It used to be that a Euro was worth about a dollar. Now one Euro buys about $1.50. The stuff we sell overseas is half off. Winner? US companies who sell a lot of stuff overseas. Bad news is we have to spend more of our dollars to buy their stuff. Like oil. You might have noticed that oil’s gone up. I can bore you to death with a myriad of other causes, but one very big one is that our dollar is worth less. We have to spend more of them to buy imported stuff. Winner? Overseas companies who sell us a lot of stuff. Unemployment Unemployment is up. This statistic is as important as whether you have a job. If you do, it’s just a signal of a slowing economy. If you don’t, it’s the end of the world. Either way, the question is, why have businesses let people go? The answer is maddening. If you own a business, and everybody is saying that people have stopped spending, you are unlikely to expand your business. The data say that spending is holding, though. We may be buying at WalMart rather than Macy’s, but spending is not down. It’s a fear thing – everybody’s talking about bad times, so we act like times are bad. That includes business owners, who decide whether to hire or not. Housing Market The housing market situation is a correction. Housing prices, like stocks, gold, cars and taxes, go up and down. These corrections happen about every decade or so. Some are mild – sometimes prices are just stagnant for a few years, then begin normal appreciation. Some are severe. This one’s severe. The severity was caused by lenders making “zero down” and “no doc” loans. Zero down means what it sounds like. No money down. Well, if housing prices go down at all, people who put no money down will owe more that the property is worth. No doc loans are loans that require no documentation to prove things like how much you make and how much you’ve saved. If housing prices always go up, there’s no problem. There will be equity in the price appreciation. But nothing always goes up. Some of these zero down people now owe more than their property is worth. And there are lots of them. They probably wouldn’t have qualified for a conventional (20% down, 30 year mortgage, with payment no more that 30% of gross income) loan. Now we know why. So, they lose their homes, and a lot of these homes go on the market. When there are more sellers than buyers, sellers lower prices until buyers start buying. That happened to internet stocks and now it’s happening, to a much lesser degree, to houses. The last time it happened in housing was the early 1990’s. We lived through that, and we’ll live through this, too. By 2012, this will be forgotten by all except those who lost their homes. Stock Market In a normal (20%) correction. Companies that get most of their income from overseas (see Dollar) are doing best. Housing stocks and housing lenders (see Housing) are doing worst. The reason no one knows for sure whether we’re in a correction, is that a correction is two consecutive quarters of contraction (negative growth). We won’t know until July whether that’s true. We do know that people feel less rich because they don’t have oodles of equity in their house, and while spending is not Decreasing, it’s not likely to go up a lot. And consumer spending is 2/3 of US Gross Domestic Product. Corrections happen about every ten years or so, and the last one was in 2001. Since the stock market tends to ‘discount’ prices six months in the future, most of the smarter people I listen to think that the economy will improve in the second half of this year, so the stock market is probably about finished correcting. Nobody Can Get a Loan Banks have to keep a percentage of their assets (which are loans) in cash. That is called capitalization. When loans are bad, an extra amount, called ‘reserves’ is put aside to cover people who don’t pay them back. Right now, a lot of people aren’t paying back mortgages (see Housing). Because banks have to put this extra amount aside, they don’t have as much to lend out. So, they only lend to people with really good credit and lots of assets. If you’re not one of those people, banks don’t want to lend to you right now. They have enough problem loans. If your credit is good and you have lots of assets, you’ll have no problem getting a loan. Bailing Out Brokerages J.P Morgan bought Bear Stearns for a song. Sort of. Bear put lots of investors in mortgages. Not regular mortgages, but little slices of mortgages. Here’s how it works. Banks make home loans and bundle them into packages. Here are a bunch of loans, sliced into pieces – some with only the interest part of the mortgage payments, some with only the principal part. Because mortgages were very highly rated by bond insurers, little old ladies bought them for income. Some of these loans, though, were ‘no down’ and ‘no doc’ loans. Some weren’t. When these loans started to be problems, they weren’t owned by the banks that made them. They were owned by hedge funds, mutual funds, and lots of little old ladies who bought little pieces of them from brokers. Bear had a lot of these things. No one knows how many, or what they’re worth. Before they were bought by J.P Morgan, Bear’s book value (my favorite way of valuing a financial company) was about $74/share. On the following Monday, there stock was selling for $2 and change/share. That’s because nobody, not the Fed, not J.P. Morgan, not Bear, nobody knew how many of these things were on their books. They just knew there were a lot. The Fed knows how nervous people are, and didn’t want to have a brokerage failure, with people panicking about their money market accounts and thinking their security accounts were worthless. So they were very, very persuasive with J.P. Morgan about buying Bear. They made lots of promises to help if things went wrong, because they thought it would be cheaper than a panic. The Sky is Not Falling This is a rough patch. In the next president’s mid-term, these stories won’t make the first five pages of the paper.

I’ve been staying away from my favorite stores. There are so many articles in the newspaper and on TV about whether we are in a recession - some giving reasons that we might be. The increased cost of gasoline and so many people loosing their homes, are other indications that we are in a recession. I have seem some small businesses in my neighborhood close also. Even Starbucks, which we call $5 Bucks, has started a new marketing strategy introducing a new everyday coffee blend. They mailed a card to our home offering a free cup of coffee every Wednesday for several months. I enjoyed my first free coffee today.

Many more people sleeping on the streets. That’s always the way. Subways too. Traveling to work at 6:30am you see more and more people.

My grocery budget was $60/mo. (really!!!) for 5 years until about 1-1/2 years ago, progressively increasing to about $350/mo now for one. The prices increased so rapidly that I don’t know exactly what I spend now. That increase includes substituting dried beans & corn instead of meat or fish. I will not give up fresh veggies. My milk bill alone is now $40/mo. The movie theaters are empty; the roads are filled & burning gas like never before; restaurants are slow; hardware/home improvement stores are far less crowded; hammers are still pounding on wood building new homes; foreclosures are increasing; businesses are closing, big businesses too. Still, most will say they aren’t affected by this depression. Recession, inflation, depression… pick a name. All apply & will so even more next year. I also saw Charlie Rose. It prompted me to visit the website & glad I did. Thank you.

I live on a small acreage mini-farm in a section of rural America in Missouri. I have heard stories about people turning their equines loose because they can’t find hay, or can’t afford it anymore. People are trying to sell horses and mules in newspapers, flyers, and on bulletin boards in feed stores. Equines that used to sell for $1500. can’t be sold for $400. Large live-in horse trailers are popping up for sale everywhere you drive. Some sale barns are not finding buyers for equines being sold for less than $400. People are franticly trying to downsize their medium and small farms. Slowly the “American Dream” even in rural America is coming to an end.

I live in an upscale Oakland-Piedmont hill area. No recession here. The gourmet food shops and resturants are as busy as ever. Visiting a friend last Sunday. Her neighbor’s house on sale for almost three million drew a big crowd at the open house. At Best Buy in Emeryville the other day. Seemed as busy as ever. Last night bought a sandwich at the Roma cafe at the corner of College and Ashby in Berkeley. Stunned the menu listed an ordinary baked potato for $4.90!

I was laid-off a couple of weeks ago. After the initial shock, I am very excited about the next transition - some of my “never will I do this” have been challenged. I like that - I feel alive with possibilities. I thought I was too old to find another job - then I realized that I am a decade younger than a person who is running for president. Now that’s a thought…..