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Posts Tagged ‘Investing’

Nine Reasons Why This Economy Feels So Bad

Posted by Ram Kumar Shrestha on August 8, 2012

The recent slump has been unusually painful, and the feeble recovery has been disappointing. But today’s economy seems even worse than it actually is.
 
Man holding empty wallet

H. ARMSTRONG ROBERTS / RETROFILE / GETTY IMAGES

Recent U.S. economic troubles are often referred to as the Great Recession, implicitly equating them with conditions during the Great Depression. Yet by many measures the economic deterioration of the past few years is not as serious as in some earlier downturns. The drop in GDP from peak to trough for the 2007-09 recession was indeed severe, 4.7% compared with 3.2% for the 1973-75 recession. Still, it doesn’t begin to compare with the 26% decline of the early 1930s, the 18% of the 1937-38 recession or even the 12% of the often-overlooked 1945 slump. And peak unemployment was higher not only during the Great Depression, but also during the recession of the early 1980s.

Moreover, if you look beyond the national averages, several past recessions have been more destructive in certain specific regions. Rust Belt manufacturing was badly battered in the 1970s – indeed, Detroit and the U.S. auto industry have never fully recovered. And the Oil & Gas business, especially in Texas, needed a long time to bounce back from the 1980s. All things considered, the recent recession may have been worse than average, but it was hardly unprecedented – and nowhere near comparable to what happened in the 1930s. So why do today’s economic troubles seem even worse than they are? Here are nine reasons:

The recovery has been hugely disappointing. Compared with today’s feeble gains, the rebounds that followed the deep recessions of 1973-75 and the early 1980s were robust. Within 18 months, real GDP growth touched 9% and remained well above average for several years. By contrast, the current recovery has failed to get much beyond 4% at best and has averaged less than  2.25% over the three years since the official end of the recession. Read the rest of this entry »

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Another Green Shoot: Millionaire Households Rising

Posted by Ram Kumar Shrestha on March 22, 2012

Millionaire households in the U.S. are rising again, largely because the mass affluent stayed the course with their stocks during the downturn and are reaping the benefits of the market’s recovery. But frugality also played a big role.
Getty Images

GETTY IMAGES

Plenty of questions linger about the economic recovery. But along with a mildly improving housing market and jobs picture, add this to the list of economic green shoots signaling better times: the U.S. is minting millionaires again.

The number of millionaire households rose for the third consecutive year in 2011, according to a report from Spectrem Group. The U.S. now has 8.6 million households with a net worth of at least $1 million above and beyond any equity in a primary residence. That’s up from 6.7 million in 2008 but still shy of the 9.2 million millionaire households in 2007.

(MORE: Buying is Now Cheaper Than Renting 98% of the Time)

The wealth of the affluent is coming back at every threshold. According to Spectrem: Read the rest of this entry »

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