Losing it all...

Discussion in 'Economics' started by Port1385, Feb 18, 2009.

  1. I wonder how many people around me have lost it all...not just traders, but ordinary everyday people not involved in the markets. Real estate deals that went bad, people that lost their jobs, etc etc.

    I see businesses closing around me and wonder that there must have been someone working and struggling there at one time. For example, the Jaguar/Volvo dealership that had been around for many years suddenly shuttered. How many people depended on that place and now have nothing...

    I think the number is staggering and more then what most think or believe...
  2. These people who have closed their business for whatever reason, imo, are not going to be a serious contender to get back into any business if we recover.

    Also, I think that many of the commercial real estate deals that were born in the last few years are based on numbers and projections that have evaporated into thin air. The lastman standing will be doing nothing except paying taxes on over assed values.
  3. This is a key point. The people who lost their homes or closed their businesses probably have severe credit issues. They will have to put up cash because no one is going to give them a loan. Most likely, they wont have cash either.

    Its a vicious cycle where it will take a few decades to shake out...
  4. Or conversely, they have evaluated the situation and felt that it is best to hunker down after having closed their business to avoid depleting capital.

    That's my suspicion for a lot of successful business owners. No point in continuing. Time for a long vacation.
  5. This is a good point, and this psychology is EXACTLY the kind that leads to depressions.

    A bunch of people really have gotten wiped out. I've never seen anything close to this - home values cut in half or worse, 401(k)s, pensions, unemployment, health care benefits disappearing...

    I am bearish for a reason, not because I enjoy the aura of it.

    But this point you raise, steph - it's the biggest impending sign of much harder times to come, IMO.

    It means people with money won't spend it unless it's on necessities. No more discretionary spending. Hang on to those cars. No boats, RVs, pools, additions, huge dinners at the best restaurants.

    When people really are scared, as they are now, even those with means will resort to survivalist mode - preserving capital.

    Money stops circulating, goods languish, factories shut down, retailers shut down.

    Hey! That's what's happening.