We aren't out yet...

The Great Escape
How we narrowly avoided a depression.

Our economic troubles have been going on for a year or more. This article indicates how lucky we were to avoid a true disaster.

Here's how the article closes:

Government's failure to perform this role in the early 1930s transformed recession into depression. Scholars will debate which interventions this time—the Federal Reserve's support of a failing credit system, the TARP, guarantees of bank debt, Obama's "stimulus" plan and bank "stress test"—counted most in preventing a recurrence. Regardless, all these complex measures had the same psychological purpose: to reassure people that the free fall would stop and, thereby, curb the fear that would perpetuate a free fall. Confidence had to be restored so that the economy's normal recovery mechanisms could operate. That seems to have happened. By September, the Consumer Confidence Index had rebounded to 53.1. Housing prices had stopped falling. By the Case-Shiller index, they've increased for three months.

But this improved confidence is not optimism. It is the absence of terror. The consumer sentiment index is still weak, and all the rebound has occurred in Americans' evaluation of future economic conditions, not the present. Unemployment (9.8 percent) is abysmal, the recovery's strength unclear. Here, too, there is an echo from the 1930s. Despite bottoming out in 1933, the Depression didn't end until World War II. Some government policies aided recovery; some impeded it. The good news today is that the bad news is not worse.

I can see, everyone's still on edge over the current situation. People aren't spending as much as before, aren't investing as before...and businesses are the same.

And so are the wife and I. I have my concerns that we will slip back into a second recession soon, perhaps after Christmas, when the sun is dim, the nights are long, moods are dark, and Christmas credit card bill need payment.

We've recently invested in a condo in Surrey BC Canada, not too far from my parents. We arranged the mortgage to have small monthly payments, with the option for large yearly payments. If things go well, we can pay off the condo in 5 years. If not, we can survive on our savings, and live in the condo, for two years, while unemployed.

Frugal and careful times, these.