The Economic Crisis: Let´s Be Honest For A Moment And Share

I would like to share my up close and personal experiences for the last few months with regards to the economic crisis in the hope you can do the same so we can get a more accurate picture of what is really going on out there right now.

My wife and I run an internet cafe in Spain, near Denia and meet a lot of people on a daily basis, mostly european tourists but sometimes people from much farther away as well.

Some three months ago we started seeing a slow but steady decline in visits to the cafe, which at first was not too disturbing. As of about a few weeks ago I can say that it has become a problem as we barely could pay the costs for the cafe for the month of December (electricty, water, rent). this effectively means: we do not have money to pay the rent for our house where we live for the month of January, nor food, nor gas nor whatever. Luckily we have some reserves which will last us about two months, but after that...

My wife took a very tough decision by going back to her former employer (elderly care) starting this month, to at least ensure financial continuity. I am very grateful for her to do this but I am now alone in the cafe 7 days a week, no more (half) days off. I do not mind really, but after the holidays I will barely get to see my daughter, as she will be off to school early in the morning and asleep when I come home late at night. This bothers me.

Here is what we have heard and seen around here:

In December, 6 out of 10 restaurants in the area have permanently closed their doors and laid off all their staff. Two others have closed for a month. All (everyone) of the real estate agents are now gone but for a single one who probably still has some reserves. I talked to one of them for whom I repaired his PC a while back and he said that his office had not sold a single object since februari 2008. He was laid off in November and is now freelancing and trying to sell mobile phone contracts. Almost everyone I know who was or still is in construction or real estate have lost their jobs and are looking for work.

Another local, a cab-driver, a regular with us, had his financed car taken by the bank just before Christmas (sigh) because he could not keep up with the payments. He paid some 560 Euro per month for the car. He is now (as he says temporarily) on benefits, but this will only last till the end of Februari.

Yet another regular with us, a very kind young woman who worked as a veterinary assistant just lost her job because the clinic had to close in December. She came by on a weekly basis because she writes articles & blogs and does not have broadband at her house. She has now left for Valencia to look for work together with her friend.

We have lost most of our English customers who usually flood us over Christmas, probably because the British Pound is now at record lows against the Euro. Almost noone at all showed up over Christmas and New Years which is highly unusual because people travelling always get online to send wishes or cards etc.

I am not sure what I am going to do if (when?) this joint starts to make losses... I have some serious IT skills, but what if there is noone to pay for those? For the first time in my life I do not have solid answers. We just have to face facts.

So far my honest experiences for the last few months, hopefully you are willing to share yours if you have them.

I wish you all and your family strenght, health and courage for 2009

sounds tough where you are OP.

i must say that, thus-far, i feel pretty insulated from the crisis. prices are falling and everywhere seems pretty short-staffed but other than that things are as normal.

i have some family members that have lost their jobs in the past year and can't find work but they're involved in construction so it isn't surprising.

reply to post by pieman


Hi Pieman, thanks for the reply...

Can you at least disclose in what part of the world you are or which state?

Thanks again

I live in Michigan. Things here have changed drastically over the last year. I have noticed in my area that foreclosures on houses have significantly increased. There are businesses closing almost daily. I work in the construction field doing flooring, and I must say it has become quite a struggle.

There are no jobs in my area to speak of. The local paper here has went from 15+ pages in the job section all the way down to 1 page. The sad part is that the 1 page has ads on it to fill the blank spots. The local General motors plant announced recently that they are closing their doors permanently. That alone will impact the local economy here greatly.

There are more and more people starting to barter/trade for the things that they need/want simply because they have no income. I have seen signs popping up all over the place for things/services that people have to offer in trade for other items/services. I am not sure how long it's going to take to get us out of this situation, but if things do not change in the near future I will be forced to give up my house and move. I can offer my services for trade, but lets face facts bartering doesn't pay the bills.

Great idea.

I am in Saskatchewan and the economy is doing well.

Lots of jobs.

South ft myers Florida. Devestated. Signs for employment on the corners. Crime up. Few people I know have a job. Or pay their bills and mortgages.
I have stepped up my employment efforts to include waiting tables or cleaning. Anything would be good!

I am an Environmental Consultant in the UK and have noticed a massive downturn in work, the phone doesn't really ring these days and enquiries have been in a steady decline since last summer. This is mainly due to stagnation in the construction Industry, which most of our work comes from (Contaminated land).
All in all it's beginning to get pretty worrying. Major high street retailers in the UK also seem to be folding at an alarming rate, seems to be one every week.

[edit on 5-1-2009 by Thebudweiserstuntman]

I'm in the States, Indiana to be specific and I'm in the automotive manufacturing industry, which is obviously hurting, as are people here. But what i don't see yet is what the Op is seeing, when I go to town I see the restaurants full and the coffee shops busy, so even though I hear the fear in peoples conversations it hasn't hit here too hard.... yet.

I'm not a fan ofmodern management styles but i have to give credit to the managers where i work, our orders are at less that 50% but they kept almost everyone on until the holidays. I afraid that now we will see the real cuts that have been put off.

Sorry about your Luck Op sounds like you have/had a real good thing, something to be envied. Good Luck!

I'll just say this, I live in the mid west and when our domino's who has been here at least 30 years (was here before I graduated high school so maybe 35 years?) closed down I thought uh oh this can't be good, sense when does the only pizza delivery place in town run out of business?

People around here who lose jobs are having to pick up jobs selling phone contracts, one guy is concerned who lost his and picked up a car salesman spot right before we found out they were in trouble.

An electronics plant has closed down, a plant that makes oil filters is closing down, a welding plant laid off all part time and temp workers and is now laying off full time employees.

Heck even some of the local bars are going under here and when that happens it's a bad sign when people can't afford to drink.

The cost of living here is going up and salaries are going down. I'm actually contemplating moving because cost of living has been increasing at such a crazy rate (including food) that after I had paid off all my debt I thought if I scrounged I could save a nice little nest egg. Well nope not happening. I had one lady tell me she had saved 4000 in her checking account and with the cost of everything and salaries not going up she's about spent all of it.

I had another lady I work with come back from vacation and said wal-mart products there were about 15-20% cheaper than here I thought she was joking until I saw the sales slip and thought what the h@#$?

I've been telling people if I can get a job in a state with higher pay than what I get now I will be moving. That being said it would have to be a state job in health care as that's what I do now and that will always be a stable job.

I have (had) a friend who sold her house for cost and moved to the west coast because salaries were higher and cost of living was also but she nets in the end more money there than she did here.

I had another friend for the exact same reason moved to the east coast and is making out better than in the mid-west.

So ya it sucks really bad here too. I'm in the middle of farm country and I have to pay more for my food than the people who have it shipped to them hundreds of miles. To top it off 1/2 my family are farmers I mean come on. At least I can still buy a cow at cost and get cheap meat but that's about it.

i am in indiana also i agree everything seems to be full but i wonder how they are paying for things i know many people who have already been laid off and have lost jobs completely my husband and i both work in the trucking industry things have slowed down so much our incomes have been cut in half we have cut back we have zero credit cards and i wonder how we will survive and only have one child i pray for those who has many mouths to feed i put out a garden this summer and canned alot to help with winter veg. expenses this year is going to be rough for some reason i can just feel it

reply to post by MoonMine


I live in Ohio. I have seen gasoline and grocery prices go up, up, up, then gas came down, then up again. We have people who make their living by tearing wire and copper from abandoned houses, and our town has experienced four murders in the past year over drugs or money. Car parts have went way up. What used to cost $10 now costs $30 in the parts store. I see a lot of people who walk, and some who ride bicycles to work and shopping. times are hard all over, and America is no exception. All we can hope for is a changing of the guard, so to speak, and hope something positive will happen soon. One good thing, if you can call it that, is that my SS disability pay went up $40 this year, the biggest raise we have ever had. the call it a "cost of living raise." We get a raise, the cost of living goes up to match the raise. Great scam, fellows!
We Americans are not stupid, as some think we are, but we are lazy, and it will take something big to awaken the sleeping bear once again. I really think TPTB should read their history, and see what pi**ed off Americans do when they get angry at someone. They lock and load, friend.

Thanks for all the replies guys, much appreciated.

It seems like the crisis is felt the hardest in the country side (where I am) as opposed to larger cities. I wonder if that is to be expected??

What Darthorious from the Mid West is reporting is disturbing to say the least and basically mirrors our situation here, even though the place where we are is not a bad place to live at all.

One more thing:

In chatting with a friend who is a shipping broker just now the discussion turned to logistics where I remarked to him, "you know, all basic food markets only have around three days worth of supplies, there only needs to materialize an issue with logistics and the whole system breaks down with people fighting over food within a week" to which he said quote:

"but for our part it IS already broken. Since a month we have seen international shipping practically grind to a halt without a decent explanation whatsoever. And I am not just talking about car shipments. Think raw materials like grain and rice. I´m quite sure that major outlets are running on reserves right now, especially the ones depending on raw materials. What about animal food? Countries depending on imports over sea for their food are going to be in some serious trouble the next few months."

I believe him, because he has been in the business for well over 20 years. He remarked that he still had some charter contracts but not any new business in six months which is worrying for him as well. He works out of Antwerp, Belgium.

Worse case scenario is ofcourse food riots and people actually starting to die from hunger. We´re not there yet, but stocking up on canned foods does not look so far out to me anymore...

I have lived in Tokyo for the past 18 years. Japan has basically been mired in recession (whit a slight technical uptick over the past few years) and land prices have been falling since the late 1980s in most places. The Nikkei stock index stood at a mind-boggling 38,000 in 1992; yesterday it closed at 9,043. Layoffs (particularly in heavy industry) are skyrocketing, with the situation in the Kansai area (where most of the autos are made) being particularly grim. Auto sales have plunged as much as 70% for some companies. Because this economy is so dependent on exports (particularly to the USA), the picture has changed dramatically in the last few months. A spate of new grads are unable to find work, and the numbers of people in long-term temp jobs have grown over the past decade to the point that there is an entire generation without the skills needed to keep the economy viable in the long term. Add the nation's rapidly-aging population, low birthrate, refusal to let more than a trickle of foreigners in, high government debt, the rise of China as a competitor in many manufacturing sectors that Japan used to dominate, and an utter lack of resources, and the picture is highly unpleasant to say the least.

However, Japan does have a few things going for it. People are used to living frugally. Since the economic bubble popped in the early 90s. most of the frothy excess in the real estate market and stock market has been cleaned up. Japanese banks by and large avoided the toxic subprime/derivates boom, which makes their balance sheets among the strongest and cleanest in the world right now. Most Japanese have a high personal savings rate and strong family support, so they are able to weather hard times better than those in most other developed nations (at least for awhile). A frugal and Spartan attitude that eschews reliance on excessive credit and purchases of stuff like marble countertops and massive McMansions also helps. I think Japan is better prepared, socially and psychologically, for a transition to "dark times" than most other countries in this way.

Anecdotal evidence: Over the past few months, I've noticed a sharp decline in the number of foreigners I see on the streets. The strong yen and troubles elsewhere are keeping the tourists away, and as the Western financial sector has imploded, most of the swaggering expat investment bankers and so on have had to go home. I saw an interesting report on the young generation of Japanese (in their 20s...so-called "Gen Y"). Apparently they are much less materialistic than the older generations, refusing to buy fancy designer goods and not interested in travel overseas, cars, house ownership, or big-ticket items. Part of this is that their earning power is very low and their future prospects are not bright, but rather than live in denial about it they are willing to adopt belt-tightening as virtue.

What else...in Tokyo, walking the streets, there are few conspicuous signs of misery per se. There are homeless people, but the city has shunted them off to special areas and they are kept out of sight for the most part People are still going out to restaurants and bars, women are still dressed up to the nines in Gucci and Channel, things are still squeaky-clean for the most part. I am told that in smaller cities and the countryside the impact is much worse, with swelling ranks of homeless and unemployed loitering around public places and a sharp uptake in violence and crime. Japan's much-vaunted manufacturing sector is "hollowing out" like the US's did in the 80s, as low-value industries move to China and other cheaper places. Consequently, rural and small-city Japan (deeply dependent on manufacturing and industry) is developing its own "rust belt," with all the social and psychological decay that entails.

That's the view from here...

[edit on 5-1-2009 by silent thunder]

Well I live in Houston and things seem pretty good here still. Granted as far as recessions and depressions go, Houston is one of the best places to be. We have all the Energy companies here, most of which have their head quarters here as well as countless other business. No one I know personally has been laid off. The restaurants, bars, and clubs still remain full here. Gas prices are currently very cheap as well.

Aside from the economy of Houston and all the business based here, Texas is one of ten states in the US that cannot go into a deficit with the state budget which has helped tremendously as well. As well there were never any housing bubbles here as the cost of living here has always remained low.

On top of all of this I am very very fortunate to be at the top end of the technical employees of a very large, global IT Managed Services firm. IT managed services sector is doing quite well, but as an added bonus I would say 90 to 95 percent of our business is government contracts. While government spending in general world wide may be down and they may be laying off people as well, they themselves nor their IT are going anywhere.

In 2008. our North American operations has seen an 8 percent rise in our IT Managed Services as well as whopping 30 percent increase in our SAP Services.
(as a side note, I get at least 1 or 2 emails a week from technical recruiters for job openings, which I attribute to murphy's law. that is I have a full time job so of course they are looking for me which would be quite the opposite were I unemployed!)

I personally live with in my means. My car is paid off and I have not had a credit card in years. I have no need for flat screen TVs or any other crap I cannot afford and/or do not need. I have a total of 4 bills a month and can cut that down to 3 if I wanted to use my company cell phone instead of my personal cell phone.

That being said, I am still getting myself prepared for what is coming and I do believe we are only seeing the tip of the iceberg. I still suggest to everyone that, like me, stock up on non-perishable foods, and if applicable, ammunition.

[edit on 5-1-2009 by Anonymous Avatar]

Washington state here. From a "looking around" perspective, things are getting kind of rough here. Crime rates have gone up for basic smash & grab thefts, hold ups, and even some home burglaries. I definitely notice new homeless people in Seattle because they stick out like a sore thumb. Most of them are young people, with nice clean backpacks and dirty but not tattered clothes, many of them are carrying a family pet with them. I've noticed some layoffs, but you can still find "HELP WANTED" signs outside most service businesses & restaurants in the area. Our state budget is hurting big time with an almost $6 Bil deficit which apparently the state must balance out. Schools especially have taken a hit, and the universities are starting to turn people away citing too many applicants for too few open seats in classrooms.

Personally speaking, things have never been better.

Originally posted by silent thunder
I have lived in Tokyo for the past 18 years.

Excellent post, thanks a lot...

I visited Tokyo twice for business in 1999 & 2000, luckily I had a company card with (almost) unlimited funds because boy are things expensive over there like hotels and dining. Atounding devotion to the job over there...

I remember a manager´s father in law suddenly dying from heart failiure. The manager left the office after the call and promptly came back with his wife and a stretcher so she could mourn close to him while he continued his work in his cubicle.

Amazing.

[edit on 5-1-2009 by MoonMine]

Originally posted by Anonymous Avatar
On top of all of this I am very very fortunate to be at the top end of the technical employees of a very large, global IT Managed Services firm. IT managed services sector is doing quite well, but as an added bonus I would say 90 to 95 percent of our business is government contracts.

Hey, can you hire me please? I can do anything (like coding & advanced debugging on high end servers, how about tweaking a kernel of a live production server and getting away with it?)

Will work for food

Thanks for sharing that, there is still hope for the specialists

Originally posted by burdman30ott6
Personally speaking, things have never been better.

Glad to hear that burdman, really am.

Thanks

My dad just lost his job this past week, for the fourth time in the past ten years. He has a PhD from Princeton and is now unemployed again. Even though he will receive the highest possible amount of unemployment, we lost our dental insurance (my wisdom teeth come out next month) and still cannot afford college... We also just took out a home equity loan but since my mom may lose her job too due to the economy, we may end up with bigger problems than we have already.

Wow, sorry to hear that....

Can you say in which State you live?

Good luck on the wisdom teeth extraction (multiple?) Off topic: why would you have your wisdom teeth removed? Or are they bothering you?

Thanks...