I am not sure how I feel about our economy. I understand that jobless rates in Michigan are bad. I understand that consumer spending is lower than normal. I can also reason that we have a housing issue, in my eyes a correction. The main thought I have is that we did this to ourselves. Sub-prime lending has been blaimed for a lot. However, if you stop to think about it the banks allowed this to happen (they allowed Joe purchaser to get a $400,000 home when only making 35 grand). They got greedy thinking that when rates went up they would make some $$. But the banks are not the only ones to blame. Joe purchaser is also to blame, why would people go out and make decisions like that. We live in a society where bigger is better, more expensive is better, and the more you have the better off you are.
So where am I going with all this banter. Well, Morgan Stanley decided that we needed to be informed that there should be a “recession alert” they issued one for the US yesterday. What does that mean, are we in a recession, is one coming. Should people start stuffing money into their matress.
As I read the article . They make it sound like they are informing the country of things we are unaware of. I can’t help but think that the News outlets are going to have a field day. In a time where banks are already tight with giving money to deserving companies and small business, now this will even hurt lending more.
Are we going to be in a new era type of recession (one that has not been defined yet) or are we going into the 80’s type recession where interest rates were high. This is what the question is? What is a recession in today’s world, a word where money means less (think of our US debt) and where consumers treat money as virtual?