The Economy | Personal Finance & Lifestyle | Yakezie Forums

Post edited 9:26 am – February 15, 2012 by Eric – NarrowBridge.net

My stocks are up, I have been promoted, I have bought my first home, I have almost finished paying off my student loans, and most of my friends are in the same boat.

Oh yeah, and unemployment has been falling lately and home prices seem to have stabilized. Thanks Barack Obama for fixing everything that Bush II messed up. 

Well, there seem to be more retail jobs in Fort Collins now then when I was looking 1-2 years ago, which I take to be a sign that more people are spending, i.e. more people think the economy is improving. Technical jobs, OTOH, which are the lifeblood for the area, doesn't seem to be making gains.

Plus, the consensus is still: if you don't have a degree, Denver is still were the jobs "are." But it is possible that this isn't really an indicator of the economy, but of the micro-economics of Colorado.

Edward Antrobus said:

bax said:

Do you think the economy can truly recover, as long as we stay focused on consumption being the engine of the economy?

What are the alternatives? Maybe it was just the bias of the textbook author and the professor, but my understanding of how the economy works is basically: things are made or done, people pay for those things, which gives money to the people who made/did those things, so they can pay for more things to be made/done. For the economy to grow, more people need to buy more things, so more people have money to buy things.

That is pretty well how I understand the economy. Money is used to exchange for goods and services. That is what money is for. It is only as good as the things you use it for. Then whoever you paid has the same decision to make. Of course this doesn't necessarily have to do with how well the economy is performing at any given time but that is an accurate albeit rudimentary definition of the economy.

Poor Student said:

That is pretty well how I understand the economy. Money is used to exchange for goods and services. That is what money is for. It is only as good as the things you use it for. Then whoever you paid has the same decision to make. Of course this doesn't necessarily have to do with how well the economy is performing at any given time but that is an accurate albeit rudimentary definition of the economy.

I don't remember what the term was, but one of the measures of economic health is the speed in which money changes hands.

Post edited 12:49 pm – February 16, 2012 by JT_McGee

Credit expansion is finally kicking in.  People are coming around to borrowing, and banks are finally lending.  In that respect, I think the economy is getting better.  That'll probably give way to super-high gas prices, which isn't cool.  But then there's always that European disaster waiting around the corner…

Things have never been better on Wall Street.  Can't wait for some M&A love in 2012!  Not necessarily related to economics, but good for the econoME.

I think after four years or so people are finally feeling a little more safe if they haven't been let go by now.  As a result they aren't as afraid to spend again.  The economy is slowly inching back but it is still a problem when we are using credit to prop it up.

But there are some companies out there like Apple and Starbucks that are selling premium products and making a killing through this economy – that's a good thing.  Other companies are realizing that you can make money if you provide superior service, such as Zappos.  For too long companies thought they had to cut back everywhere for profit, but people want more than goods with cheap service.

As I think the economy is getting better I think we may also be entering a phase where a higher unemployment rate is the norm.  The days of 4-6% may be over.

The US economy seems to start doing slightly better now than 6 months ago. The economy in Europe is however still contracting. Europe is the biggest trade partner with Asia. Less orders from Europe means that Asia will grow less. Key question for me is if the US economy can continue to improve while the rest of the world is declining or showing lower growth than before. That would be a first.

The number of unemployed people in both the US and many southern European countries is still enormous (9% or 8% in the the US; >20% in e.g. Spain; and this are the official figures: what about all those who have given up hope). Nobody knows the future, but I think that any substantial improvement that we will see comes very slowly.

Edward Antrobus said:

I heard this on NPR either Tuesday or this morning. Apparently, budget retailers, and premium brands are doing well, but the middle road, places like Sears & J.C. Penny are struggling. People apparently are buying the expensive stuff and going cheap on everything else.

JC Penney just rolled out their new price strategy where they're going away from raising the price then lowering it by sales, instead just lowering regular prices by at least 40% off the board.  We've gotten so used to being led around by the latest and greatest 'SALE' that I am not sure this can work, but if the regular prices actually do make sense to buy, it could take off.  We haven't gone in yet, but my wife and I are both intrigued.

bax said:

Do you think the economy can truly recover, as long as we stay focused on consumption being the engine of the economy?

It'll probably help if they stop penalizing production so much. Everything's about consumption in the end, but you gotta produce something to be able to consume.

The thing with JC Penney at least shows that some big companies are starting to realize they need to do things differently.  If I know a store always has sales and coupons then why would I buy full-price?  Macys?  I haven't bought full-price there in ages.  Gap? I go right to the clearance rack.  In fact I tend to just go to the Gap outlet when I can.

But it's not even about low prices.  You can charge higher prices if what you sell is better quality and the service is excellent.

A lot of the crying about the economy isn't so much that the 'economy' is bad, it's that businesses don't want to adapt to the current economy.