I wanted to post this for my own record of how things are going here and also I may look back at this from a later perspective. I did that with some of the days of the stock market crash in 2008. This is one article with the proper link to give credit for it and a link or two more.
Annual economic forecast in Phornix –State economy in worst shape in like since my whole lifetime (!) 59 years. We won't reach pre-recession employment levels anyway, levels until 2014. Like the guy on Channel 12 news said, It’s a long climb back up.
Its important to note that this is economic/financial. Peak Oil/Peak Energy/Peak Everything is NOT figured into this situation.
2010 forecasts revealed at annual Economic Forecast Luncheon
Arizona is slowly moving down a long road to economic recovery, according to experts today at the 46th Annual Economic Forecast Luncheon co-sponsored by Arizona State University's W. P. Carey School of Business and JPMorgan Chase. More than 1,000 people crowded into the Phoenix Convention Center to hear whether tough times will soon be over, and the 2010 forecast news was not pleasant.
"Arizona consumers and businesses are in the state's worst economic downturn, by far, in modern times," said Professor Lee McPheters, director of the W. P. Carey School of Business' JPMorgan Chase Economic Outlook Center. "In fact, 2009 saw the first personal income decline for Arizonans since records have been kept. Personal income for the year may be down as much as 2 percent."
McPheters says Arizona lost more than 240,000 jobs over the past two years. He expects the state to lose another 24,300 jobs next year. Arizona was officially the worst state in the nation for job growth between October 2008 and October 2009, with an unemployment rate reaching 9.3 percent this October. McPheters, who is also editor of the Arizona and Western Blue Chip Economic Forecast publications, does not expect to see the state return to 2007 job levels until 2013.
He adds the holidays won't bring much economic cheer. Retail sales for the year in Arizona are expected to be 10 to 15 percent lower in 2009 than 2008. In addition, McPheters says state budget problems will persist because of less tax revenue coming in, less population growth than previous downturns, and mandatory spending dedicated to designated programs through legally protected formulas.
On the national front, Anthony Chan, managing director and chief economist for JPMorgan Chase Private Client Services, had similar negative news. He explained that since 1954, real gross domestic product (GDP) growth has averaged about 5.8 percent in the first four quarters of economic recovery, but a number of factors indicate we won't see a boost like that after this recession.
"Americans' household wealth has plunged by an average of about $5,000, and people are also saving more, so we are not likely to experience the level of consumer spending that usually helps to lead us out of recession," Chan says.
However, he added there are a few good signs on the horizon. He says companies are contributing to fixed investments to improve their productivity and profits as the economy recovers. During the third quarter of 2009, the preliminary real GDP was up 0.9 percent, and inventories are likely to grow from there. He also says the government is determined to avoid a double-dip recession, so it will probably contribute 0.2 to 0.3 percent toward real GDP growth next year.
"We can still come out with a real GDP growth rate that lies within 2 to 2.5 percent," says Chan. "While such growth is unlikely to close the current negative output gap, it is likely we will continue to build momentum over the next several calendar quarters."
The real estate and construction forecast included some positive news only from the single-family home market. Elliott D. Pollack, chief executive officer of the well-known Scottsdale firm Elliott D. Pollack and Company, says local housing prices have finally flattened out, and multiple listing prices are up 11.7 percent since they hit bottom in April. However, there are more than 50,000 units now in the foreclosure process in Maricopa County, with more foreclosures on the way. Pollack believes there were 80,000 excess single-family homes and condo units in the market as of 2009's second quarter.
"Unfortunately, it appears a high percentage of resales have been purchased by investors," says Pollack. "Up to 40 percent of homes purchased in August, for example, were bought by ‘absentee owners,' meaning many of them are likely to go back on the market in the next two years. While I do believe Phoenix will grow again, we could easily have to wait until 2013 or 2014."
Things are even worse in the commercial market, according to Pollack. He says apartment vacancies could exceed 13 to 14 percent at the peak. Office vacancies will reach their highest level ever next year, exceeding 27 percent. Industrial vacancy rates could reach or equal the all-time-high vacancy seen in the Valley in 1986.
"Overall, based on history, it could take a decade before prices get back to the 2008 peaks," says Pollack. "What this suggests is that the overall level of commercial building, which is already down significantly, will come to a screeching halt next year. From an economic development standpoint, the situation could be a positive because a large amount of inexpensive space will be available for companies that want to expand or move here."
More details and analysis, including slides from the luncheon presentations, are available at http://knowledge.wpcarey.asu.edu.
And, second thing I wanted to post. I liked this idea from a blog I read regularly. It was a few months ago and it was called Time for a Consumption Strike. Looks like Denninger’s (market-ticker.denninger.net) consumption strike will be a permanent way to live:
"....Until then the position of those who wish to join is simple: No non-essential purchases of anything are made. Period.
What's an essential purchase? Here's the list:
Enough food to eat at home. No more eating out.
Rent and utilities.
Essential medical services.
Enough fuel to get to and from work.
In addition any "excess withholding" is stopped; if you are getting a big fat refund from the IRS every year you are loaning the government your money at zero interest until April. Stop that; it’s stupid. Change your W4 so you get exactly nothing back or owe a tiny amount; if you pay estimates pay only that which you must and not one dime more.
Note that it is unlawful to use your W4 to intentionally under-withhold, but you are in fact not obligated to pay one more dime in tax than you actually owe. There is nothing wrong with adjusting withholding to match (as close as you reasonably can) your actual tax obligation.
Put the money you save (it will be a lot!) into a non-TARP Credit Union if you have one available to you, or a non-TARP local bank if you do not. Spend none of it."
Peace to all, Shamba