A Growing Sense of Impending Doom

I had an odd sensation today, sitting in a meeting, talking about how our university is hunkering down for the ongoing financial crisis. Hiring freeze, budget reductions, program cuts, firing the masseuse in the faculty day-spa, that sort of thing.

My thoughts on the economic crisis have been the thoughts of someone mostly isolated from its effects. We don’t own a home. We don’t have a crazy mortgage. Most of our money is in a good old-fashioned savings account from ING, earning a very respectible 3%. Where we are invested in the market, it’s in stocks and funds that are positioned against the market, so when the dips happen, we are protected.

More than that, I find myself employed in jobs that are not likely to be impacted by the economy. When times get bad, and when people are in crisis or transition, they often look to long-forgotten childhood faith, to the hope and community it provides. When people are laid off, some of them choose to go back to school to complete unfinished degrees, to explore new careers, or to advance in their field. I feel fortunate that I’m not out hustling a car lot, or managing a retail store, or trying to run a company these days.

All of this taken together means that most of my thoughts about the economy are the thoughts of a slightly smug, self-righteous and disinterested observer.

Something changed today though. I’ve had a growing sense of impending doom. The US markets dropped almost 9% today, giving back all of the irrational exuberence it exhibited over Thanksgiving. The Asian markets followed suit, down almost 8% and still falling, and investors are already hedging on a European tumble when those markets begin to trade in the next few minutes.

Banks have stopped making loans. Housing prices are tumbling. New cars are piling up at the Port of Long Beach and Port Hueneme, with no room to put them on the car lots. Unemployment is up. The Fed has decided to buy up bank holdings in car loans, student loans, and small business loans using money that they simply … created.

Today, for the first time, I started to think about how bad things might actually get. I’ve already seen armed guards blocking the doors to a failing bank, when Indy Mac went under. I wonder if I might have to stand outside my bank, pounding on the door to get our savings out. I wonder how many banks have to fail before the Fed has to start printing money to meet its FDIC obligations, and the dollar loses value so fast we have to push a wheelbarrow full of cash to the market to buy food. I wonder if I might find myself standing in a bread line sometime in the next few years.

I wonder if things will get so bad that I look back on cell phones as a frivolous luxury, and regret every dollar I ever wasted at a Starbucks.

I look at everything now through the lens of being a father, and I know there’s a long list of things I would endure on my kids’ behalf. My dignity is in seeing them fed and clothed, warm and safe, and whatever I have to do to make that happen borrows it’s dignity from their well-being.

That said, I wonder if we will look back on this year with longing, and thing, “We didn’t know how good we had it. I wish we had known it would get this bad.” And this feeling keeps growing.

28 thoughts on “A Growing Sense of Impending Doom

  1. Bobby

    My advice is spend more money now so you don’t have to worry about it losing value or being able to get it out of the bank.

    Ha ha, bank! Joke’s on you!

  2. Chad

    I just have to say this….

    Reduction of excess is never a bad thing. This country needs to rethink it’s own sense of self, of what we’re entitled to, and how we get it.

    I say this in all humility, as a recovering excessive person, learning a new paradigm of moderation, self-regulation, and the benefits that follow such behavior.

  3. Anthony

    It’s a fun juggling act when church attendance sky rockets upward while giving goes down the toilet… good to read that I’m not the only Debbie-Downer when it comes to thinking about where the economy is heading – thanks, Mike.

  4. Chris Cox

    Mike – Turn off your television! Go to the mall. Go to wal-mart. Go to the movies and try to find a parking space. I own a business, and things are tight right now, but they’re not that bad. Please don’t buy into all the crap the media peddles. I’m almost completely certain that a year (at the most two) from now, we’ll look back and feel ashamed at our chicken little reaction to all of this.

  5. Linda

    It is scary right now. I don’t even look at my 401k statements now. yikes!

    My Great Aunt Irene, working as a secretary in Chicago, invested a portion of her small weekly wage during the Great Depression. She thought the communications industry had a lot of future potential. She did amazingly well.

    I wish I had some of her wisdom now.

  6. harmonicminer

    I used to hate it when old guys started out with, “When I was your age”, but…

    When I was your age, we had just endured 4 years of Carter, and something called stagflation, when interest rates to buy a home were in the high teens (even 20%!), inflation was in double digits many years, and yet the market wasn’t moving at all. So, stagnant inflation, stagflation. Sometimes we waited in line for hours to buy gas.

    The idea that I would ever be able to buy ANYTHING to live in was a complete joke. I looked at people around me who had bought real estate twenty years earlier when the prices were “low”, and realized I had no chance.

    In fact, at your age, I was literally renting a room in a house in Glendora. Then another one, in another house. Shortly after that, I bought a 25 foot travel trailer that wouldn’t travel, but was parked in a trailer park in Arcadia full of very old people who seemed to need me to look in on them a lot (I have a talent with stopped up sinks and things). I could just barely swing the loan on the 25 ft trailer. That trailer was my first home with my new bride, Karen, in 1986. By then, interest rates were down to maybe 10-12 percent, depending, but I still had no hope of coming up with a down on a house.

    I made some money on an arranging job, sold the trailer at a profit (inflation was still cooking along) and bought a condo, again just barely, with a negative amortization for the first five years. After a few years, the neighborhood began to deteriorate, so we sold that condo and bought a house, again just barely. Then we sold that house and had another house built on a lot we had bought, but again just barely. That’s where we live now.

    Sure, things could go REALLY south, in which case some of us are going to have to move in with friends/family and share expenses till things improve. But it probably won’t be that bad, and 20 years is a LONG time. You’ll bounce back.

    There has always been an underlying vitality about America. We get lazy and complacent sometimes, and pay for it in blood and treasure, but we get the job done. We’ll do it this time, too, even with our government working against us, like it did in the 1930s, because at the core we are working for ourselves, not somebody else, so we’re just more highly motivated than most.

    Of course, if our government manages some of its more egregious ambitions, enough of us may begin to feel that we aren’t working for ourselves anymore. That will be very bad.

    But I think maybe that won’t happen, at least not till your kids are grown, depending on how we manage things.

  7. corey

    It’s funny (well, not really funny…) but when gas was up so high, we heard reports from the Farkers that it would just climb and climb and climb. “It’s gonna be 7 or 8 dollars a gallon before you know it!!!”. Then I read an article this morning where they suspect gas could fall to nearly a dollar a gallon. Um… what? Didn’t you jackasses just try to sell me a Prius last Summer? I mean, it’s only December!

    So I’m with Chris on this one. Beth works in finance and watches the market every day- and she takes calls from people just like Linda who are worried about the state of their investments. Of course she’s stressed. It’s a scary time, and we have started to take measures to make sure we’re ok if things go souther. But I’m not ready to buy a pistol just to protect my garage full of canned goods just yet. ESPECIALLY based on the reportings of a media that makes a fat paycheck by alarming the public. I don’t think they’re actually fabricating any news, only creatively choosing the adjectives and adjective phrases for potency.

  8. Pingback: harmonicminer » Maybe it’s not quite THAT bad

  9. michael lee Post author

    I’m trying hard not to be insulted by the insinuations that my perspective on the economy is a wholesale import from media fear-mongering. Most of my news comes from NPR and Nightly Business Report, and my thoughts on the economy are not based on media reporting, but on the actually economic indicators that the media is reporting on. And they are uniformly bad. Not just bad, but the kind of bad that lasts for a long time.

    Companies have stopped purchasing new supplies. That’s what the Purchasing Managers Index measures. That’s not hype, that’s a real measurement of a crucial bellwether for how the economy will trend in the next few months. A lower PMI means those companies expect to sell less of their product, and when it’s really bad (which it is now) it’s usually a precursor to increased layoffs at those companies. It means less income for the vendors that supply those companies. It indicates that the productive output of a broad range of industries is decreasing, and that the people managing those companies are making plans to weather a bad, bad few months.

    Again, that’s not hype. That’s a lot of companies telling us what they plan to do. They plan to stop purchasing. They plan to lay off workers. Things are getting worse.

  10. harmonicminer

    Yep, it’s looking bad. I’m not one who thinks it’s just hype, though the hype doesn’t help. It will probably get worse before it gets better. But it probably won’t get any worse unemployment-wise than it was in the worst of stagflation (low double digits) and it will get better. Fuel prices are so low partly because businesses are producing less and shipping less, not just because the general population is driving less. So those low gas prices scare me as much as anything, being a lagging indicator confirming the other reports of cutbacks here and there.

    As is usually the case with these things, the people who will have the worst times are those without significant training, education, or job skills, who have been able to find work anyway in any expanding economy, but are the first to get, being less essential to the enterprise, in bad times.

    And yes, well educated and trained people will lose jobs too, but they will have more options to find another one, if they aren’t too choosy.

    For those of us who are still employed, our reflex in these times is to give less and button up. But the opposite is probably indicated, though I’d really make sure the gifts are going where they’re doing good, now of all times. Make your giving local, and make sure it meets a direct need.

    I am laying in a BIG supply of wood for the wood stove. There’s quite a bit of free wood out there, if you know where to look.

  11. Chad

    Hey Phil -

    A sincere kudos for your suggestion about giving. As I see it, this economic season is an opportunity to be little a little more Christlike around our direct sphere of influence. Instead of $200 to World Vision like a normal year, $25 towards a family in the community that needs a meal.

    Not that there’s anything wrong with, or unChristlike about World Vision, I’m just saying that I think with a little creativity and Divine Opportunity, the joy of small blessings can abound.

  12. harmonicminer

    Yes Mike, that is the final resting place of the people who came around looking behind my shed. That’s right next to the special area I keep reserved for them dang revenooers. What business is it of theirs what I make on my own property? Some of ‘em sure are curious, though. They don’t stay curious very long.

  13. Chris Cox

    Mike – Turn off your radio! Look, things are tough right now. But in the words of Ronald Reagan, “Markets go up, and markets go down”. What are you worried about? Another great depression? If you are, then you haven’t studied the great depression. But on a larger note, let me ask you a question: How many things in life have been as bad (or for that matter, as good) as you expected them to be? How many? For me, it’s a very very short list. Furthermore, you and I have people who look up to us. We’re husbands, you’re a father, we’re both teachers. We both have people we lead. It’s bad leadership to stir up fear. It’s times like these that we need calm voices of reason.

  14. Sharolyn

    I would like to point out the humor that “The only TV shows I watch are House and South Park” was used as a defense of intellect.

  15. Chad

    Chris -

    2 thoughts, with love and respect. :)

    1. Mike isn’t leading here, he’s blogging, just sorta filling up a little intertube space with (as he might put it) unwashed mental droppings.

    2. In regards to leadership, and I speak not from economic experience here, but still… good leadership does not tell the band to keep playing while the stagehands try and put out the fire. I, personally, have been on the other end of this equation, waving my hands around yelling something like, “HEY!! ANYONE ELSE SMELL THE EFFING SMOKE IN THIS JOINT OR WHAT?!??!”

    To quote of my all time favorite movies, Jaws:

    Bear in mind, this is after the shark has eaten like 12 people and Richard Dreyfuss’ character (Hooper) is trying to convince the mayor to shut down the beaches until a professional can be contracted to kill the shark.

    Mayor Vaughn: I don’t think either of one you are familiar with our problems.
    Hooper: I think that I am familiar with the fact that you are going to ignore this particular problem until it swims up and BITES YOU ON THE ASS!

    And… scene.

  16. corey

    you’re right, Mike isn’t leading here. But he chose to share his personal thoughts on a blog, for goodness sakes- the 2008 equivalent of a town crier. Having said that, anyone is free to agree, disagree, or pass judgement. Mike is both a father and a teacher (and I’ve seen him preach, so add that to the list with an asterisk next to it), so that qualifies as a leader. My hope is that we would all encourage one another in a moment of fragility (which is what this post is), and anyone telling Mike to keep his chin up is doing so in that spirit.

    Secondly, I feel like it’s a big jump to equate the current economic recession to a fire on the edge of a stage. A leader telling the band to play in that situation would be telling the band to stay in harm’s way. Not to mention, your analogy suggests death, not an economic bruise or scab. I think the Jaws analogy is similar. To go with your metaphor, we are not the cops in this instance. It’s NOT our job (or within our direct ability) to fix the economy. Within that story, our character is a beach goer who needs to prudently stay out of the water. Nobody (not even Bobby) has suggested that there’s no recession or that it’s all hype- nobody has said there’s NO shark. Chris said it could take one (maybe “two at the most”) years to get through this. I said Beth watches the market all day every day because it’s an extension of her job. I just think that sitting on the sand, frozen in fear about the possibility of the shark beaching itself and biting your leg off is counterproductive.

    I hate it that people are losing jobs. I work a freelance job and am very stressed that I, too, will have to go to uncomfortable lengths to make money to pay my mortgage and provide for my family. But in the whole scheme of things, Phil is exactly right- the worst that can happen is that I’ll have to hunker down. Maybe I’ll have to move my family back to my real dad’s farm in Nowhere, Tx or stay in my uncle’s guest house in Ft. Worth. It’ll be uncomfortable, but it won’t be my undoing. And depending on how I swallow that pill, it could potentially be the best thing that ever happened to my family. I believe those circumstances are a pill that would change us for life, for better or bitter (but that choice is mine).

    Mike, of course there’s data that supports a recession. Does this surprise you? Do you think it surprises anyone? And saying that you’re “trying not to be offended” kinda dictates that you’re already taking offense, no? Relax. Nobody is saying anything other than that you should buckle down but keep living life. Keep going to work. Keep loving your children. Keep thanking God that you have children, and a roof, and a stable job (that I believe you like very much), and a wife that you love (and I believe loves you), and friends, and places to exercise your musical creativity, and, and, and, and, and…

  17. Chad

    I will reference back to my original thought on this issue, which was (in essence) that I think a general tightening of the belt is always a good idea.

    I think Mike was bristling at the implication that he was a sheep of the media, lacking the ability to assimilate data and form a coherent, informed thought.

    I, on the other hand, just like to pick fights and then feel sad about them.

  18. Leonard

    Remember when the world fell apart on Y2K and we all ended up with extra water jugs and toilet paper? That was fun. Mike I think you should watch more TV so you can become informed as to Just how bad it really is out there.

    Impending doom for many people simply means living within their means and giving up 5 dollar coffees. For some it is much more serious I know but that seriousness comes from trying to sustain a bigger lifestyle that they can afford.

    The media just seeks to make victims out of irresponsible financial handling. Sadly Christians are too often concerned more about sustaining a lifestyle than making difference. We should be the most sacrificial people around but… Well we know, just getting up on a soap box now.

    I better go watch some TV Fox or CNN tough choice I better ask Rush.

  19. Zack

    “Christians are too often concerned more about sustaining a lifestyle than making difference.”

    Really? Okee dokee.

    Hey Mike, I agree with you. Forget the media and the sheep that believe everything it portrays – on either side of the “spin”. We all see the same indicators that you do. Plugging our ears and saying, “neener neener neener neener” ain’t gonna fix a damn thing.

    To quote Idiocracy, “Shit’s really fucked up right now”.

    I work for myself. No bosses, no sick days, no certainly no bailouts. I can only speak of my own experience, which of late indicates not a recession – but a meltdown. The last 2 quarters have already hit me hard. People are tightening their belts, the effects of which are trickling down through the system, to mom-and-pop shops like me.

    And Mike? Don’t watch more TV. Please. There are songs to be written, poker to be played, and Booker’s to be had.

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