The 2008 recession, how bad was it really?

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sighyoung
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Re: The 2008 recession, how bad was it really?

Post by sighyoung »

I was relatively fortunate, but I know a lot of folks who were hit pretty hard, including a lot of my students.

We bought our house in 1995, but have had to refinance a couple of times when my wife has taken leaves of absence. So we missed both the housing bubble in our neighborhood (which was never bad), and the decline in values for a few years after 2007-2008. Overall, housing values bounced back in a few short years.

My retirement account took a big hit, but has finally bounced back nicely. I kept my money in the stock market the whole time, while my wife pulled hers for an entire year or more. As a result, my retirement account is twice hers, and she probably has only 60-65% what she should have in her retirement account.

My brother bought a house in Maui at the top of the bubble, and lost hundreds of thousands of dollars in equity. It took him ten years of throwing all the money he could at the mortgage to finally get above water last year.

Houses in poor areas, such as my mother's house in North St. Louis, were especially hard hit by the recession. Because my parents lived in the Penrose neighborhood, their house never built up equity until the housing bubble leading to the crash. Then it all evaporated, and when I needed to sell that house and move Mom to Louisville, it took almost two years to find a qualified buyer with the money and credit to buy it. Neighboring houses on Zillow were virtually worthless because of the crash.

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Re: The 2008 recession, how bad was it really?

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AWvsCBsteeeerike3 wrote:those that were hurt the most in no particular order were 1. people who got turned upside down on their mortgage and were forced to sell (to relocate or whatever), 2. people who were duped into taking out a mortgage they couldn't afford, 3. people who were close to retirement relying on a 401k/IRA/etc losing ~1/2 their savings, funds/governments/investors who had bought 'AAA' traunches that became worthless, 4. anyone who lost their job in the massive rise in unemployment due to the fear, uncertainty, lack of purchasing, and overall slowdown.
5. Anyone who graduated into the recession - for many if not most, their career prospects will never recover. In my own field, hiring was essentially zero for about five years. It has since recovered to tepid though with some occasional signs of life.

While the worst was held off, it was extremely bad, and the effects are still lingering. The complacency and excuse making over this remains infuriating to me. The solutions are known.

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Popeye_Card
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Re: The 2008 recession, how bad was it really?

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Diddy wrote: I don't know how much of it is directly related to the collapse of the economy but our local economy has lost almost all of its manufacturing jobs in the last decade. I'd roughly estimate it at half the jobs in the county have disappeared. Probably impossible for rural communities to recover from something like that.
This is part of where I was going with the economic evolution that was happening regardless of the recession. I don't think rural / small town manufacturing jobs are going to return in the same form. Many of the MAGA crowd believes they are, but I just don't see how that happens with modern manufacturing and commerce.

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Re: The 2008 recession, how bad was it really?

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The company I worked for, that employed 1,800, had been family owned forever and they became pretty complacent and didn't keep up with a changing market. The other two big manufacturers, one manufactured retail shelving, and the other composite decking material should have still had a market for their products in a growing economy. They really seemed to be thriving before the economy tanked.

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BottenFieldofDreams
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Re: The 2008 recession, how bad was it really?

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Arthur Dent wrote:
AWvsCBsteeeerike3 wrote:those that were hurt the most in no particular order were 1. people who got turned upside down on their mortgage and were forced to sell (to relocate or whatever), 2. people who were duped into taking out a mortgage they couldn't afford, 3. people who were close to retirement relying on a 401k/IRA/etc losing ~1/2 their savings, funds/governments/investors who had bought 'AAA' traunches that became worthless, 4. anyone who lost their job in the massive rise in unemployment due to the fear, uncertainty, lack of purchasing, and overall slowdown.
5. Anyone who graduated into the recession - for many if not most, their career prospects will never recover. In my own field, hiring was essentially zero for about five years. It has since recovered to tepid though with some occasional signs of life.

While the worst was held off, it was extremely bad, and the effects are still lingering. The complacency and excuse making over this remains infuriating to me. The solutions are known.
I am 5., only a little older because I spent some time goofing off overseas. I would guess, if challenging my depth here, that the recession also contributed strongly to the risk-averse commoditization of labor that still has me down. Talent, desire, potential (and opportunity) don't mean much: just give hiring managers a function-performing cog.

Like others have said though, it's hard to know exactly what's what because this is all set in a revolutionary explosion of knowledge and automation.

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Re: The 2008 recession, how bad was it really?

Post by Arthur Dent »

BottenFieldofDreams wrote:I would guess, if challenging my depth here, that the recession also contributed strongly to the risk-averse commoditization of labor that still has me down. Talent, desire, potential (and opportunity) don't mean much: just give hiring managers a function-performing cog.
Absolutely. Companies have not faced a strong labor market in decades and consequently a preponderance of managers have spent their careers being rewarded for not investing in retaining and developing talent. Why bother when it's no problem bringing in another desperate schmuck when you wear out the last guy?

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IMADreamer
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Re: The 2008 recession, how bad was it really?

Post by IMADreamer »

I want to point out in wasn't saying it was never bad I'm just saying it didn't feel bad here. Although the economy here has been in decay since the 80s when the farm crisis hit.

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Re: The 2008 recession, how bad was it really?

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cardinalkarp wrote:Well, pretty much anyone who purchased a home in 2008 or in the few years prior ended up getting completely raked over the coals when it came to their home. What used to be an investment instantly became an anchor around many people's neck.

Did my standard of living drop in the years following 2008, probably not by much. But all of a sudden a home that was purchased for $175,000 was all of a sudden worth MAYBE $150,000 if you were lucky. Then, as people w/ bad home loans started to default and short sale or foreclose on their homes dropped the price even further. So on the surface, no it doesn't look bad (for some)...but don't be fooled into thinking it wasn't that bad, it was.
Or, as I've mentioned on here with my goddamn house in Iowa that I bought in 2006 and attempted to sell in 2009 when I moved to New York, you get royally screwed by everyone else who had foreclosed on their houses so now the market is bursting at the seams with houses the banks own and are trying to get rid of.

I can't fault someone for buying a $200,000 house on foreclosure for $85,000 because the bank is reducing the selling price by $10,000 every month. However, it really sucks for me when I'm trying to sell my house at it's market value of $85,000.

Luckily I had enough disposable income that I was able to support 18 months of empty mortgage payments before I finally started renting the house out. Likewise for the past 15 months when I've been remodeling it with nobody living there.

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Re: The 2008 recession, how bad was it really?

Post by pioneer98 »

I think it was worse in certain areas where housing really boomed then busted, like Miami, Vegas, etc. I've told some of these stories but I will tell them again.

I know someone who lives in the far West Chicago suburbs that bought their house a year or so before the meltdown. It is in a subdivision where they only finished the first couple phases, so there is land right near them still just sitting there empty for the phases that never got built. Several houses on their street were foreclosed on and are still vacant (some of the foreclosures have happened in more recent years). I think this family is insane because they just bought a more expensive house so they could have a shorter commute. So now they have 2 house payments. They will have to almost take whatever offer they will get on this house. I just can't imagine they will get what they paid for it. I hope I'm wrong.

My parents were lucky. They got their life savings out of the market about a year before that whole thing happened, or my dad would definitely have had to work several more years.

I also remember that I had my 401K in all these diversified funds, from ones that supposedly had "high risk" and ones that had "low risk". It didn't matter. They all went down by the same amount, like 35%. I gambled after that and put a majority of my money into the higher risk/higher return funds after that, and I've made it back since then, and then some. But I worry about what kind of bubble(s) the Trump era might cause. I really worry about agriculture. It seems like it is in a pretty precarious position right now, with Trump wanting to cancel trade deals and all the other insane things going on.

I do think it had a big impact on people. Obviously not like the Great Depression, but Millenials do not like to take out big loans and tend to save more than earlier generations. There are Boomers that did end up having to work several more years before retirement.

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Radbird
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Re: The 2008 recession, how bad was it really?

Post by Radbird »

Part of it depended on where you lived. We were fortunate to live in the Denver metro area, with high growth, a hot housing market and low unemployment. We took a small hit on our house but it quickly recovered. We bought it in 1996 and sold it last month for 3x what we paid for it.

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