I missed that cookie smell

Finally, I feel-good story about the economy!

If ever there was a reality check ...

For those who may think that the problems with the economy are being blown out of proportion or just aren't as bad as they actually are, read this story posted on cnn.com.

What strikes me after reading this is that incidents like those described in the story (people killing themselves because of foreclosures and financial problems) could become more prevalent. Scary ... very scary.

DEFCONOMY 3 ... 2 ... 1 ... ?

As I'm sure many others have been doing lately, I've been paying a lot of attention to the turmoil surrounding the U.S. economy and the president's $700 billion bailout proposal.

I don't usually watch the president when he's on TV because without fail, every time I see the man speak, I always think (even eight years later), "I can't believe this guy is our president." But, I was watching TV last night at when he came on at 9 p.m., I watched because I wanted to see what he was going to say about the disaster that is our economy.

Just when I thought I couldn't feel any worse about our current situation ... hearing that he has little support (even from within his own party) for this plan makes it all that much more depressing. As stated on many websites, in articles and by talking heads lately, Wall Street has had a party for the last decade and now the U. S. taxpayers are going to pay the price to the tune of $700 billion.

Virginia Rep. Tom Davis (no relation) said it best when he was quoted as saying that the president's plan is the worst he's ever seen but there is no other plan.

Wow ... just, wow.

Glenn Beck of CNN Nightly News wrote a piece about the plan and introduces a new phrase that, as things continue to worsen (which they likely will) could become part of the lexicon used by everyone: DEFCONOMY.

And folks, we are rapidly reaching DEFCONOMY 1, which would be the next Great Depression.

Much like DEFCON 1 (Defense Condition 1), which is the highest alert status at which the U.S. armed forces can be set, DEFCONOMY 1, according to Beck, is the step at which this country's economy is standing on the edge of the cliff with one foot in the air.

Never in my life did I ever think I'd see something like this. I remember as a kid growing up the recession of the '80s and the economic downturns of the 1990s, but I never thought I'd see the economy at the verge of collapse. I remember my grandparents talking about living through the Great Depression of the 1930s and how there was almost a fairy tale-like quality to their stories.

But it was real ... very real and here we are again. The U.S. is (supposed to be) the greatest free market economy in the world and when the stock market crashed in 1929, it started the domino effect that led to the world-wide Great Depression. And if you know your history at all, you know how the global economy recovered back then ... World War II. Nothing like a war-based economy to reverse an economic collapse.

Ye gods. Could it really come to that again? I mean, look at what has happened within the past couple of weeks ... the economy tanks and the rest of the world's free markets swoon in response. Not good ... not good.

And I don't even want to know what my 401k looks like right now. A co-worker looked up hers last week and says the value of her 401k is down 27%. Ho-lee crap.

Then I came across this ... we bought our house six years ago for $151,000. There are six houses on the street that were built by the same builder within a few years of each other (circa 1924) and they're virtually identical (Dutch colonial). The house two doors up from us (which is more updated than ours) went on the market a few months ago for ... $150K.

I keep looking at Joey and wondering what kind of world he's going to inherit and I never factored the economic future into that until now. I keep hearing how the baby boomers are going to clean out the Social Security system so that my generation will see nothing of what they contributed. If that's the case, what is Joey's generation going to face?

And not for nothing, but ... picked this up from the Doonesbury website on which is quoted part of the Republican Party platform for 2008:

"We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself."

Sign O' the Times

I went to gas up my car yesterday and was pleasantly surprised to "only" be paying $3.99 a gallon.

Ye gods

So this is what it's come to ...

Just read this story on cnn.com and I'm speechless.

In a nutshell, the story is about women in the Santa Barbara area of California who sleep in their cars after becoming homeless because they lost their jobs.

What amazes me is that the problem is so bad that there actually are programs in place now that designate parking lots in which people can park and sleep in their cars overnight.

"There are 12 parking lots across Santa Barbara that have been set up to accommodate the growing middle-class homelessness. These lots are believed to be part of the first program of its kind in the United States, according to organizers.

The lots open at 7 p.m. and close at 7 a.m. and are run by New Beginnings Counseling Center, a homeless outreach organization."

Why do I get the feeling that this won't be only such program of its kind in the US?

Home equity dips

I just saw a story on cnn.com in which the Federal Reserve has announced that for the first time on record (since 1945) the percentage of equity in American homes is less than 50%.

This means that people's homes are worth less than what they owe on them.

The most disturbing part of the article:

"Economists expect this figure to drop even further as declining home prices eat into the value of most Americans' single largest asset.

"Moody's Economy.com estimates that 8.8 million homeowners, or about 10.3% of homes, will have zero or negative equity by the end of the month. Even more disturbing, about 13.8 million households, or 15.9%, will be "upside down" if prices fall 20% from their peak.

And there are people out there who say we're not in a recession.

An ingenious idea? Depends if you're on the bus ...

No doubt you've heard about the alarming rise in home foreclosures with the burst of the real estate bubble.

I received an email from my bank this morning that I thought was ingenious and disturbing at the same time. They are now offering "foreclosure bus tours" that are just what they sound like ... you sign up, get on a bus, and review homes that have been foreclosed on. Here's the text of the email:

"Join us and view up to 10 of the best-valued foreclosure properties in town! Our Foreclosure Bus will shuttle you to foreclosed value deal properties that we have pre-selected and pre-screened. Each tour starts at 9 a.m. and lasts approximately 3 hours."

I just wonder what the atmosphere is like on that bus. While some first time buyers must be excited because they may find a deal, the whole bus tour must be a bit surreal, no?

Granted, this is an interesting idea because no doubt the bank wants to get rid of these properties as soon as possible so the deals must be amazing.

Still, the whole idea is kind of creepy and sad and at the same time. I mean, if there are that many foreclosed houses out there that you can literally tour them on a bus, that just can't be a good sign for the economy, can it?

Unless, of course, you're in the market for a house.

GM buying out workers

I'm not much of a financial person, but I just saw this story on CNNMoney.com and it made my stop and think for a minute (which is about all I have time for these days).

The gist of the story is that GM, the largest U.S. car maker, is continuing its cost-cutting measures by offering "lucrative buyouts to 74,000 employees - its entire U.S. hourly workforce." (emphasis added).

According to the article:

About 46,000 of the GM employees are eligible to retire today and they can take pension incentives worth between $45,000 to $62,500 to retire. In addition there are inducements for those who are five years from retirement to leave early and receive benefits.

Those who leave and agree to sever all ties with the company - including giving up lucrative pension and health care coverage - will receive a lump sum of $140,000 if they have 10 years of service, or $70,000 for those with less than 10 years.

While a large-scale buy-out like this isn't unusual (Ford has done something similar, according to the article), this makes me uneasy about the state of the economy. Frankly, if there are people who are still saying we're not in a recession, then this could erase those doubts.