# Are we in a depression?



## Spinner (Jul 19, 2003)

What were TPTB saying back in the Depression of the 1930âs? This is the same basic things we are hearing today...




> "We will not have any more crashes in our time."
> - John Maynard Keynes in 1927
> 
> "There will be no interruption of our permanent prosperity."
> ...


Clearly the population back then wanted to believe that the worst was over and good times were ahead. People haven't changed much, today the population wants to believe the economy is improving the same as our ancestors wanted to believe it back then... The problem is that they were wrong then and they are wrong now. 

The crash of 1921 has been forgotten. It was every bit as bad as the later crash that resulted in the great depression. However, we recovered and prospered the first time. TPTB needs to learn history and repeat 1921 instead of repeating 1929.

Prep for the worst and hope for the best.


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## texican (Oct 4, 2003)

I can see the light at the end of the tunnel...

question is, is it daylight, or an oncoming train?

I think we're on a runaway train heading headlong into another runaway train.


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## Ernie (Jul 22, 2007)

I heard an economic report the other day that stated, "American businesses have more cash on hand than at anytime in history." In other words, they're scared and pinching their pennies for a rainy day. Same as we do.

Unfortunately we won't be able to predict the "beginning" of something like this until we're already right in the middle of it. So prepare, prepare, prepare.


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## where I want to (Oct 28, 2008)

What it means is no one is all that good at predicting the future. I'm sure there were plenty of published remarks about how the end of the world was coming soon too.
The internet is just chock full of contradictory statements about the future right now. Most people just pick and choose whatever reenforces their own beliefs. 
And occasionally some one is pretty spot on- just the monkey and typewriter effect. 
And regarding purchasing stocks in 1929 or 1930- my father never let my mother forget that she wouldn't let him buy Xerox in 1929 for next to nothing.


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## crtreedude (Jun 14, 2006)

texican said:


> I can see the light at the end of the tunnel...
> 
> question is, is it daylight, or an oncoming train?
> 
> I think we're on a runaway train heading headlong into another runaway train.


Do you know why people in NYC are depressed? The light at the end of the tunnel is Newark... 

Sorry, couldn't resist.


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## Callieslamb (Feb 27, 2007)

Depression? Nope - we're dead and are just flopping around until the nerve endings realize it.


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## cnichols (Jan 5, 2010)

I heard in California the light at the end of the tunnel was shut off. They couldn't pay the electric bill.

Now back to the OP ... Yes we are in a depression. The only difference is that the gooberment has manipulated the GDP with bailouts, cash for ______ programs, etc. If they hadn't done that the "official" definition for a depression would apply. If they had left things alone we would have had a depression like 1921 but our gooberment officials think they know it all. 

I feel, and this is MHO, that if they had let ____ fail and not tried go inject fiat money into the system that we would be on our way to recovery now instead of "circling the drain" waiting for it to all end.


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## jerrwhy (Jan 12, 2010)

Depression?

Personally, I think we are. 

-Since late 2000/early 2001 inflation has eroded any gains in the stock market.

-From 2005-2007 you had a negative savings rate. 

-You have unemployment continuing to remain at high levels(I look at the U-6 number as a more accurate gauge). 

-Many people who do have jobs are being asked to work more and take a pay cut at the same time.

-We've already had some tax increases in the form of the health insurance plan and expiration of tax cuts; which basically means that we will all have to incure higher tax cost in the future.

-The stock market is following a similar path that the markets followed after the great depression. 

-There are a lot of highly thought of analyist and economist giving out a lot of contradictory information regarding the direction of the economy. 

-Soverign debt is the new black. Many European countries are beginning to crumble around the edges as years of high taxes, high spending, and high debt are taking their tolls. 

-Our own national debt is skyrocketing. I don't think it will sustainable for much longer.

-A lot of the stuff you're hearing out of Washington about "green shoots" and the like is the same hype and political rhetoric that you heard in the early 1930's.

-The only reason that a lot of people aren't worse off is that the safety net programs that we've established such as unemployment are continually being extended. 

Personally, I don't think anything will get better any time soon.


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## ET1 SS (Oct 22, 2005)

Yes we are in a depression.

The latest unadjusted unemployment rate is like 23%.


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## Bret4207 (May 31, 2008)

Yeah, depression. But TPTB refuse to use the word. And this isn't like the Great Depression. We have a different set of circumstances and a social safety network that can support "the system" for some time. But we're borrowing to fund that system and that's what will kill us. We simply do not have any way to pay off our debt. I've read that there literally isn't enough gold in the world to cover our debt, I believe it. 

There supposed to be a new round of commercial foreclosures coming this summer. That will kill off even more business, cause more unemployment, less tax revenue, more borrowing.

Personally I've gone through $4K in savings in the past year, wiped out my funds to start my small engine repair business and I'm not doing good finding a job. My son lost his job, my neighbors are sitting idle waiting for work...even TSC is talking about not building a store they've already bought the property for. Things, frankly, suck. And the clown in the White House and his 435 pals in Congress don't care. 

"Bleak" doesn't describe the future...


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## crtreedude (Jun 14, 2006)

Honestly, I think it is worse than a depression. Things are not going to improve significantly until we learn to live differently. Our current civilization is based on cheap energy - you have no more than five more years of that. There is nothing on the horizon to replace it, so what you will see is a reduction of 3 to 5% a year in the amount of oil available - which will contract the economy. This will go one probably for about 20 to 30 years - or until alternatives are found. 

Even if some magic source of energy was found tomorrow, it takes 20 years to switch over, should have started back in the 70s when we first understood about Peak Oil (that was Peak Oil for domestic supplies - and now we are at about 40% of our needs)

Unlike the depression what was mainly a single event, what we have is what I like to call a Slinky economy. It falls down the step, seems to catch its breath, and then falls down another step. It will continue until it hits a point of equilibrium.

And the yearly reduction of petroleum is going to keep nudging the Slinky down the stairs. (yeah, I know I date myself with the reference to Slinky :lol: )


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## fordy (Sep 13, 2003)

............I don't think we're in a Depression , back then the banks were NOT loaning any money , therefore the Velocity of money or the rate at which money circulates around and around through the economy was almost zero ! Hence the massive infusion of Chinese dollars into the banks by the Fed . too keep the system from freezing up . The reduction in Asset Value(s) for tangible assets like homes and land is causing massive Cash flow problems for All or most local and state taxing authorties because of the reduction of their taxable value . Massive layoffs will occur in Municipal jobs until these forced adjustments run their course . Back in the 1930's the level of municipal jobs vs private sector jobs was very low so it was farmers being Unable too earn a living vs someone working as a garbage collector for a city , today . 
.............Plus , most fed debt was probably owed too American citizens and institutions , which means that the interest paid on that debt stayed in this country and helped the citizens , now it is going into a Chinese Bank account . Big difference there as well ! , fordy


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## tgmr05 (Aug 27, 2007)

Whether we are in a depression, technically, or not, is not the question. The question is what are we doing from an economic and political standpoint to combat our financial woes. History has shown us repeatedly that the path chosen by our current leadership does not lead us out of our circumstances, rather keeps us in it. There are examples of similar situations that led to prosperity and more employment, but the leadership at the time chose a different path than our current leaders. Depression, recession, whatever -- we are guaranteed not to come out of it until we get some leadership that makes better decisions and policies.


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## Kathyhere (Sep 27, 2009)

> Are we in a depression?


Well let's see, in 2000 the number of people on SNAP (food stamps assistance program) was $17 billion. There has been a tripling of cost in a decade as last year the government provided $53 billion in food assistance. By Christmas 50,000,000 people may be eating at the government expense. This is a clear indicator of how our economy is doing for millions. Now if you want to argue with the cost of this $53 billion going to 40 million people, well it makes more sense than giving a handout to Goldman Sachs just so they can increase their bonus pool. Also $53 billion is a drop in the bucket compared to the $13 trillion given to Wall Street. 

So yes I would say we are in a depression, but things are only going down from here. How will all these people get food if the government cut off the food stamp program? We will see food riots here, I think so.


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## 7.62mmFMJ (Nov 19, 2008)

All this stimulus is just putting hot wires to a dead frog. We need a deflationary depression to clear the debt overhang and to bring prices/labor costs down to competitive levels.


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## SquashNut (Sep 25, 2005)

The goverment cann't tell us the truth. We would really crash if they admitted it.


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## Sawmill Jim (Dec 5, 2008)

I don't know if anyone else is depressed or not but i am broke :Bawling:


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## Shrek (May 1, 2002)

My fathers definition of the difference between the two.

"A recession is when you hear the man down the street lost his job.

A depression is when you hear that your brother in law has lost his job and your sister has called to ask if they and their kids can stay at your house until he gets back to work because they cant make their mortgage payment and have to be out by the 15th."

It all depends on which perspective your viewing it from.


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## johncronejr (Nov 4, 2007)

Sawmill Jim said:


> I don't know if anyone else is depressed or not but i am broke :Bawling:


Yup...me too Jim...and it is indeed depressing...


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## Sarabeth (Sep 14, 2008)

Shrek said:


> My fathers definition of the difference between the two.
> 
> "A recession is when you hear the man down the street lost his job.
> 
> ...


That's a good description. My FIL has said time and again that the difference between now and the GD is that we have unemployment and other assistance that was unavailable at that time. If it were not for that, I do believe that we would be seeing blocks long soup lines.


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## SquashNut (Sep 25, 2005)

My husband was telling me that people he has talked to lately have been getting cut off the unemployment and had reductions in welfare and food stamps. 
One guy was getting $600 a month cash and $10 in food stamps to live on. Now no food stamps and $50 less cash. Hard enough to live on what he was getting now $60 less a month. He told dh he had no change in circumstances. If he reports any thing, even recycleing cans they cut him some more.
Around here the food banks are dry. They give only one box of food a month and less in the box each time. Lines are long for a small town.
Garden this year is Ok, but wish it were bigger.


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## HTWannabee (Jan 19, 2007)

ET1 SS said:


> Yes we are in a depression.
> 
> The latest unadjusted unemployment rate is like 23%.


ETI, I don't doubt the number 23% but can you please let us know where you got this? I got a number closer to 10% US unemployment seasonally adjusted from the data that the Boston Federal Reserve puts out in its New England Economic Indicators publication. I know, I know, consider the source! I was surprised by the 10% and wonder at a 13% seasonal adjustment? 

Thanks!


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## ET1 SS (Oct 22, 2005)

HTWannabee said:


> ETI, I don't doubt the number 23% but can you please let us know where you got this? I got a number closer to 10% US unemployment *seasonally adjusted *from the data that the Boston Federal Reserve puts out in its New England Economic Indicators publication. I know, I know, consider the source! I was surprised by the 10% and wonder at a 13% seasonal adjustment?
> 
> Thanks!


I got it from:

http://127.0.0.1:4664/redir?url=htt...&src=1&schema=2&s=HPy8OUaZGhUlXZbl_kxDCOsz-0E

It is the DOL, however now when I go to it they have removed the link for 'Unadjusted' data.

It looks like, today they are only allowing folks to see the rate after all of their 'adjustments'.


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## Ann-NWIowa (Sep 28, 2002)

I've heard this referred to as the Great Recession. That would definitely be accurate although I think Depression is a closer fit. Without the manipulation of numbers we'd see a very different picture. 

A lot of work going on on roads, bridges, sewers, etc. is .gov spending as part of the handout to states and local governments. So they not "real" jobs that will continue when stimulus funds are gone. 

I don't think foreclosures have slowed down and bankruptcy numbers continue upward. I really don't think it matters what you call it. If its black then calling it white doesn't make it white. .gov can call it whatever it wants but that doesn't mean it isn't a depression.


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## edcopp (Oct 9, 2004)

I believe that we are in a depression, that will get a lot worse before it ends. 

Now of course it depends on what you think a depression is. The government will never tell us. One thing that comes to me is that the government will have a difficult time collecting the taxes that it needs when many incomes are lower and some have gone away all together. Government spending just keeps on keeping on.

If I lived in an old house that needed work and I spent the next year working on the house while just getting by would I be better off? I think I would especially if I generated no income tax for the spendthrifts. 

There is plenty of work around my farm that does not generate any income, like deferred maintenance. 

It looks to me like the depression will hurt the powers that be a lot worse than it will hurt me.


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## MoonRiver (Sep 2, 2007)

What's got me confused is that train and truck freight is up carrying raw materials for manufacturing. That seems to indicate we are on the way up.


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## Ernie (Jul 22, 2007)

MoonRiver said:


> What's got me confused is that train and truck freight is up carrying raw materials for manufacturing. That seems to indicate we are on the way up.


Check the numbers on that. 

Also, a lot of that "freight" is moving to the ports where the raw materials will be shipped overseas.


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## Bret4207 (May 31, 2008)

True UE figures- places to start looking and understand how they "work" the numbers.

http://articles.moneycentral.msn.com/learn-how-to-invest/The-real-unemployment-rate.aspx

http://voices.washingtonpost.com/economy-watch/2009/05/actual_us_unemployment_158.html

http://www.redstate.com/malbis/2009...oyment-rate-is-more-than-twice-as-bad-as-102/


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## groundhogII (Nov 6, 2008)

The Great Depression seems to be the standard from which our current financial situation is always compared.Like someone else mentioned,the gov't. will never admit the dire straits that our economy is in. Things are different now.There are many safety nets to help people in need that weren't available 80 years ago.So no,I don't think things are currently as bad as they were then.
That being said,there is no doubt in my mind that we are quickly heading for an economic collapse so severe that the GD will pale in comparison.We will clearly be able to identify when we arrive at this point of collapse.When the population reaches a point where they are no longer willing to exchange their labor for fiat currency (dollars) then we will know that we have arrived.


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## Ernie (Jul 22, 2007)

Those safety nets are all an illusion. If you're one of the first people unemployed then sure, they'll help you. If you're part of a mass unemployment then you're screwed.

Consider that those unemployment costs are all paid by businesses, essentially forcing them to pay for people whether they need them or not. At a certain tipping point, you can't support more people unemployed than you can support working.


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## PrincessFerf (Apr 25, 2008)

groundhogII said:


> We will clearly be able to identify when we arrive at this point of collapse.When the population reaches a point where they are no longer willing to exchange their labor for fiat currency (dollars) then we will know that we have arrived.


Interesting that you say that, GroundhogII. I work in IT and recently moved to a different company. I've been talking with LOTS of my peers and here's what I'm observing.

1. In the past 2 years, IT was hit hard. Companies who weren't selling products weren't investing in IT, much beyond keeping systems running. People working in research & design, software testing (especially in new development) were losing jobs and not finding new ones. Last year the company I worked for had ONE software tester position open. They received over 100 resumes. People who had positions were working TONS of hours with no incentives (these are salaried positions, not hourly). Morale was horrible. Companies were having RIF after RIF (Reduction In Force), no position was safe.

2. At the beginning of 2010, jobs started opening up in IT. Unemployed IT people started finding work and people who were employed started moving to other companies. LOTS of people started moving to other companies. Much of this is natural attrition due to people being treated like carp over the past few years. People looking for greener pastures - different opportunities.

Much of what I've stated in points 1 and 2 could also have been said when the technology (dot com) bust occurred in 2001.

3. The BIGGEST difference between the technology bust in 2001 from what's happening today is that EVERY SINGLE person I've talked to are saying something like this: "I'm not going to work 60 - 80 hours per week anymore. I don't care if they fire me, I'll be happy to do "X" instead." (X = something other than working in IT) 

There is no incentive to sacrifice time with their families or personal time... when the company can RIF you at anytime, just because you or your team don't align with their current projections or future goals. *Now*, I get that that's business. I don't fault a company for wanting to grow and be profitable. And in my line of work, we're a significant expense to the end product. But what I'm seeing now in return is that employees are no longer willing to "do whatever is necessary" to get that paycheck (and some of these paychecks are pretty nice).

People don't care as much about getting that new car, or wearing the latest fashion, or having the newest gadget. I see a lot more people bringing lunch from home. People aren't building a new home, they aren't going on an expensive vacation. I have had quite a few people ask me questions about gardening, some who are building their first garden.

This change in mindset is pretty significant. These are people who are making at least $60,000 to $150,000 a year. These are people who aren't really hurting financially... but are shifting their mindset away from being completely consumer-driven to (dare I say) "thrifty".

So when you comment that "...are no longer willing to exchange their labor for fiat currency" I wonder if we're seeing a temporary or more permanent shift.

Human beings are generally pretty predictible. They're like water... they seek the path of least resistance. HOWEVER, unlike water, they will seek a path of greater resistance when the prospect of greater payoff in the future exists. Maybe people are waking up to realize that the "greater payoff" isn't necessarily about money.


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## Ernie (Jul 22, 2007)

I think what you're seeing is the awakening that corporate America treats its employees no better than a hog in a factory-feed lot. We're a commodity to be exploited. Extract maximum labor for minimal expense. 

There's two things that have pretty much destroyed my off-farm work this past year. 

1. Government has created a licensing program for computer security consultants. It's not openly adopted yet, but it's costing me money now and will continue to get worse. A lot of the banks and finance industries who can afford my services have also had to take Federal money for bailouts and support and are now being forced by the government to follow this new licensing standard. If you know how to penetrate and exploit computer systems, or follow the forensic trail of people who can, then the government wants you licensed, tracked, and catalogued. Not to mention the $20k per year licensing fee. That's just the cream.

2. Diminished willingness to report computer crime. The media doesn't want to really hurt its advertisors so when a bank or credit card company gets hacked they don't usually report it. Without the fear of the consumers and customers finding out, companies are not willing to pay big bucks to either secure their systems or to stop and assess the level of damage once it has occurred.


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## PrincessFerf (Apr 25, 2008)

Ernie, good points. The financial services sector has taken a real beating these past few years (and much of it for good reason). The last thing they want is negative publicity, especially the type that would give their customers any reason to doubt the security of their money in the bank.

RE: Government has created a licensing program for computer security consultants.
Just another way TPTB "keeps tabs" on people.... and another tax (fee).


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## mekasmom (Jan 19, 2010)

SquashNut said:


> My husband was telling me that people he has talked to lately have been getting cut off the unemployment and had reductions in welfare and food stamps.
> One guy was getting $600 a month cash and $10 in food stamps to live on. Now no food stamps and $50 less cash


Is that a state wide thing? or just a few people you know? I hadn't heard of any states kicking people off or reducing benefits from lack of funding.


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## SquashNut (Sep 25, 2005)

mekasmom said:


> Is that a state wide thing? or just a few people you know? I hadn't heard of any states kicking people off or reducing benefits from lack of funding.


Seems to be alot of people in this area. The people are residents of Wa. state not Id. where I live.


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## longrider (Jun 16, 2005)

"its a recession if your friends dont have a job, its a depression if you dont have a job!"


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## stranger (Feb 24, 2008)

MoonRiver said:


> What's got me confused is that train and truck freight is up carrying raw materials for manufacturing. That seems to indicate we are on the way up.


 whose numbers,the MSM, the governments or the people who used to work in ware houses that are in the unemployment line now.

this depression will be just like the last one, there will be some that won't be affected at all and there will be others wpo will commit suicide


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## Spinner (Jul 19, 2003)

Was it the Alabama who sang a song that had the words, "Somebody told us Wall street fell, but we were so poor that we couldn't tell", or something close to that?

I sometimes wonder if the poor will feel the depression. Will it only be middle class and up that feels the pain? I think we will all feel it. This time the govt has no money so the food stamps (and all the other handouts) will vanish. The poor have been trained to the feeding trough. What will happen when the trough is empty? 

It's sad that so many have been deprived of learning to be self sufficient. In the last depression many could grow a garden, raise meat, do whatever they could to barter and earn enough to survive. I think very few have that ability today. That ability has been taken from them by a well meaning few who possibly unknowingly set them up to suffer when the house of cards coming tumbling down. 

In the last depression very few people had electricity. They knew how to get by without a frig or freezer. They knew how to cook without gas and electric. They were survivors. In a couple of generations so much knowledge has been lost.


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## Ernie (Jul 22, 2007)

The poor are going to feel this one. Local property taxes will be hiked to cover the shortfalls which will impact even the poor, so long as they are landowners.

We're in an unprecedented situation here for a modern nation. We have an enormous supply chain required to get food from the people who grow it to the people who eat it. Those who do eat it have very little understanding of how to grow their own and in many cases they don't even know how to cook it if it doesn't come in a box to pop into a microwave. Heck, there's many farmers in my own area who are little more than tractor operators and understand NOTHING about livestock, soil conditions, or growing anything except corn. They plant seed when Cargill tells them to, they spray what Cargill tells them to, and they harvest when Cargill tells them to. They aren't really farmers anymore; they're agricultural consultants who more or less work for Cargill.

That supply chain is subject to every potential problem known to a modern nation. Trucker strikes, electrical grid disruptions, banking credit problems, soil erosion, or civil unrest in the cities and the whole thing comes crashing down. That's not even considering natural disasters or foreign invasion. 

The belief that America can sustain any disruptions at all in the food supply chain and not experience mass riots and starvation is built largely upon myth and misplaced faith in the technological capabilities of man.


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## michelleIL (Aug 29, 2004)

I tried to tell my mom that this guvment isn't looking out for ppls best interests and she refused to believe me. *sigh* Too sad!


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## HTWannabee (Jan 19, 2007)

The local Fox news channel reported today that forclosures in MA will be double what they were last year at this time. Prices had been so inflated here is does not surprise me. Our neighbors paid over 300K for their house on 1/2 acre. They both work full time to pay for it. It is too bad. When your mortgage can only be covered with 2 full time incomes and someone loses a job it is all over.


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## Bret4207 (May 31, 2008)

There's supposed to be a new round of commercial foreclosures coming that will make last year look like a sweet dream.


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## oz in SC V2.0 (Dec 19, 2008)

Want to get a good picture of things?
Search your local Craigslist real estate listings for 'foreclosures'....:shocked:


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## sunshinytraci (Oct 20, 2007)

As my account balances make me feel quite depressed, I must be in a depression.


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## Ohiogal (Mar 15, 2007)

PrincessFerf, YES on what you said. I'm in IT also. I have a good job, and are working to keep it, but also planning on losing it. When I get to where I've got the land paid for, and a way to subsist on a lower paying job with less responsibility I'll be leaving this one.
I knew back in '84 when they OK'd the 401K programs, that the corporations would be effectively off the hook for caring about employee's other than what labor they could get out of them. All gloves came off at that time. So I view myself as expendable each day and do what I can.
I enjoy my job, but I can enjoy another one just as well.
BIG BIG difference in the way it 'used' to be...and I've been in it since 1984.
I just hope to be able to make it to retirement in 10 years. But if I don't, then great I'll move on doing something other than THIS.


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