Is the recession in USA really that bad? A friend of mine knows a 97 year old who lived through the 1929 depression and he says that what we have in the USA now is nothing compared to 1929. there we NO JOBS in 1929. How is life in the USA today? Is media over blowing the situation? Also are we at the bottom of the stock market? Do we already see signs of bottom, e.g. Americans who could not afford to buy a house 2 years ago are now buying very cheap real estate at auctions at 2003 levels?

Depends on what one is looking at or listening to. One personal report is that there are noticibly less flamboyancy in places like L.A. and Las Vegas. But another report is that recreation resorts are booked solid. Amusement parks also show little outward sign of less spending.

More people are voicing out they have less money. I know of two cases of foreclosures. In both cases, they've decided to walk because the market value of the house is 60% of the value of the mortgage. Neither case were caused by job loss.

Just about everyone I talk to is angry at the irresponsible investment bankers.

I think the issues with the USA are less about what is happening and more about what will happen. The collapse of home prices in some markets and the corresponding financial crisis is setting up sort of a "perfect storm". Depending on how things go this "storm" could cause quite a bit of damage when things are all said and done.

I agree. This is only the beginning. The pattern that took place in the 1920s and 1930s is being repeated, and the worst of it didn't set in until well after the government had spent many months generating an enormous volume of additional debt and inflation. The full effect of such activity is not realized immediately.

Aren't these people realizing they were also part of the problem by taking unsustainable levels of debt, and treating their houses like ATM's, betting that the housing market could only go up ?

Mostly no.

Americans in general are rather gullible, tending to trust their increasingly despotic government and its minions in the media and academia, rather than do the intellectual work involved in determining what is really true. The development and importance of critical thinking skills is not part of most government education curricula.

They were told real estate was unassailable, and they believed and acted on it — many of them to an extent that put them at risk. And the government, together with the banks, were right there enabling the whole process. The few voices warning about the bubble were largely drowned out by the self-styled experts from government, finance, etc.

Now they want to be told everything will be alright, and government will fix the problem (by generating even more debt and inflation), and it's not their fault. So far, they're getting what they want.

I like to be optimistic but I can't at this point.
First of all world has changed a lot since 1930s, otherwise recent problem is quite comparable from the size point of view.
For sure in last half a century we haven't had like this. Though there are typical down cyles for stock, housing commodities, economy,.. but this one has affected all of them at once and in global level, which makes it quite unique.
You have to note that what happend to global econ. and finance was quite weird and exceptional, so recovery can be also weird and quite different than previous ones.
A few factors in US were due to cyclical issues and can be recovering within 1-2 years, but there are some very fundamental problematic issues which can take ages to come to a good shape. Things like astronomical US debt (around 12 tril.), huge trade deficit (which causes pressure on dollar for years to come), massive personal debt for mortgage or credit card ,... which are accomulated within many years and how you can expect quick recovery of that?!
Banks and finance sector not only lost big money, but also the way! The model they used to make money out of it, is broken and can't be repeated otherwise it will make a mess again after a few years. On the other hand governments will make more restriction on them, so makes their job even more difficult to make profit, so no wonder Citi's stock falling from 50 to 1 USD in 2 years.
I think stocks can start slow recovery by end of year, but it will be slow and for years it will not be that profitable as used to be during last 20-30 years.
Good old days are gone!

Aggregately that's true, but generally not the same people. Finance sector aside, the heaviest job losses this year have been in manufacturing. Most of that takes place in the heartland, which never had much of a housing bubble in the first place (it was more a coastal phenomenon.)

Can't agree that everyone was part of the problem. But the bankers had clear oversight over what was going on, and people wonder how they had the galls to do it then wash their hands.

In 1929 we were in a GREAT Depression wher 1 out of every 4 Americans was unemployed. Today, we are headed for a Depression - may not be "GREAT" though! You have to figure that in 1929 there were hardly any women who worked - whereas today almost 50% employed are women.

I'm still in Los Angeles - (we haven't moved yet) and yes the foreclosures on homes are everywhere! The shopping malls still seem to be busy but I think people are window shopping and not really buying anything. I went to take my car to the Chrysler dealership for an oil change 2 weeks ago and they had shutdown and the property is now vacant!

I personally think the worst is yet to come. There are many, many more layoffs in the future and once those people max out their credit cards, use up all their savings & foreclose on their home we will feel even bigger effects. The stock market is low but I still think we will hit bottom when the Dow hits the low 5,000 range --- but just my opinion.

Best thing we are doing is saving our cash and spending less. May not be great to help stimulate the "economy" but it's good for us and keeps us afloat as who knows what the future holds???

How about the irresponsible people that bought a house they
couldn't afford?

It is a generational problem, the younger generation (which I am probaly part of but I credit my small town US Great Plains upbringing for my conservative financial values) had credit cards from their teenage years. They don't understand the concept of not being in debt. Buying real estate you couldn't afford was just another means of living life on money you would have in the future. General mentality has been why not live high now, no sense of sacfificing for the future. This is a general trend that I see, of course, it does not apply to everyone.

In general, there has to be a contraction of the US economy and world economy. The US consumer has been the driving force behind the global economy and this is unsustainable. We will reach a period of slower growth after the rapid decline but hopefully more sustainable. That is my optimistic view.

You don't want to hear my pessimistic view.

By the way, I actually support the stimulus bill something Texaner and I probably disagree on. I have my reasons.

I agree. It will be painful, but unavoidable.

Which will necessitate even more painful, but unavoidable, contraction.

I agree.

Definitely also to blame. But the thing is, many of them were practically given house with no down payment and no proof of income. So these people made a personal irresponsible decision, and they do suffer the consequence for it.

But the bankers who then repackaged the debts and resold it. Well, they're still taking their bonuses, even though it is coming straight from taxpayers. This seems to make people a little more angrier.

What they were offered by the banks had the government's explicit endorsement. They naively believed it was safe and essentially risk-free. It was only "risk-free" in that neither the borrower, nor the lender, but the taxpayer was ultimately saddled with the risk burden, since the government endorsed it and supplied the credit.

I'm not saying the buyers/borrowers share no blame — just that their gullible, unquestioning trust of the U.S. government is somewhat comprehensible, even if it was misguided and misplaced.

Don't get me wrong, there are elements of it which I disagree along with the way it was put together... However, I am supportive that we need to invest in Energy (being green) and Infastructure (including railways). But then by American standards, i lean left on certain things.

I understand it is a long term process that lead to economic crisis, but being simplistic and to start reversing its effect... Cannot the problem be solved by "start" saving and "do not live beyond standard" just like in Switzerland. It is just a common sense...

it would be difficult for an individual in Switzerland to get into the sort of a debt a naive American can. You can't entirely blame the people, the government rules allow cheap financing of everything with virtually little ot back it up. Americans have also been told that government regulations are bad for you and thus our corporate chieftains and government officials have colluded to eliminate such things as they wanted go grow profits and the get elected by people who are happy that they can spend themselve silly without some silly governmental rules in the way.

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In general, there has to be a contraction of the US economy and world economy. The US consumer has been the driving force behind the global economy and this is unsustainable.

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This is changing.I believe very soon US economy and consumer's force will change and the world will not depend on US economy.This Depression or great Repression or whatever is setting the pace for global economic change.Others are rising e.g The US neighbour:China...

China is going to have big problems without US overconsumption.