Scary, incomprehenisble stuff

[creekster]

Originally Posted by BarbaraGordon

I didn't mean I experienced it as an adult, and I don't think I claimed any stress. You are correct, it started when I was five and didn't really start to let up until I was in junior high.

Thinking about this makes me feel old and now I wish I had never brought it up.

It was a sad time in Odessa. A family I knew fell apart due to the collapse and another family I knew lost their house and everything they had over about two months (despite their lavish lifestyle they were apparently living paycheck to paycheck). Much like what we are seeing now. One big difference is that the rest of the country cheered the collapse in oil prices.

[MikeWaters]

I lived through that. Houses for sale everywhere. Dad lost his job, got another one.

It actually helped Texas by forcing it to diversify, and then when the Bush Sr. recession hit later, Texas actually did well.

[exUte]

Originally Posted by SeattleUte

I think the powers that be are in shock about what's happened to our financial system. I don't really understand it. But Lehman Bros., Merrill Lynch and AIG all out of business or teetering on the brink scares the bejeezus out of me. I feel we may not be anywhere near close to the end. I know a few people will wind up getting even richer from this disaster, as many did from World War II, but for most people this could be very bad.

had more hearings on steroid use in MLB than bringing these Wall Street folks in front of congressional hearings. We've seen the oil company execs in front of congress. But no Wall Street or mortgage folks (Fannie Mae/Freddie Mac). And this under a Democratic congress.

Any ideas why?

[BarbaraGordon]

Originally Posted by MikeWaters

I lived through that. Houses for sale everywhere.

I was figuring you must have seen the impact. That's what I remember, too: every house on every block being for sale. Pretty creepy. I think Texas probably came through the crisis a little faster than Oklahoma because, frankly, Oklahoma had no way to diversify and nothing to fall back on. By the end of the decade even our football team had tanked.

[MikeWaters]

it wasnt' "every house on every block".

It was merely a lot of houses.

[creekster]

Originally Posted by MikeWaters

it wasnt' "every house on every block".

It was merely a lot of houses.

Glad you cleared that up. I was very confused by her statement.

[BarbaraGordon]

Originally Posted by MikeWaters

it wasnt' "every house on every block".

Well, sure, not on *your* block. The bust hit the upper class neighborhoods the hardest.

[8ballrollin]

Originally Posted by creekster

LEt's see, you were about what, eight years old? 5 years old? I am sure it was very stressful for you.

Despite your youthful persepctive on those events, you are certainly correct. I was living in Odessa Texas in 1981-1982 (and well past the age of majority). Like you said, the economy absolutely fell off the edge of the table. It was like going from the Great Gatsby to the Great Depression overnight.

I think the Volcker rate hikes, the overproduction of oil in the mid 80s and their global impacts are a fascinating study.

Just look at Mexico. The resulting 'lost decade' after the oil price collapse, loan defaults and then austerity programs set the stage for the mass migrations out of rural Mexico and into the Southwest US. It also laid the conditions for an underground Narco-economy.

There is no Chavez in Venezuela without IMF austerity programs. (I'm not saying they were a bad idea, but the programs were put in place because Venezuela defaulted on foreign loans taken out in the oil boom)

Much like the early 2000s American banks lent to anyone who had a project (foreign or domestic), only back then banks were filled with petrodollars not mortgage-back securities. Ten percent of American banks failed in the aftermath - I think the number was higher in Texas.

All that being said, Volcker did what he set out to do - curb inflation. IIRC he got it down to 3% in less than two years time.

[Ceteris Paribus]

Originally Posted by 8ballrollin

I think the Volcker rate hikes, the overproduction of oil in the mid 80s and their global impacts are a fascinating study.

Agreed - the Carter Doctrine was a classic example of the audacity of incompetence.