I have a personal dislike for JP Morgan Chase Bank. They canceled my husband’s credit card, even though it was paid in full, and paid in a timely manner without any late payments. They closed his card for very vague reasons that we still don’t understand. However, they recently posted a profit that made the stock market zoom off the charts. So, does this mean our economy is now recovering (in part due to JP Morgan Chase)?

Stock Market October 14th, 2009

Stock Market October 14th, 2009

I’m slightly hesitant to say we’re in a recovery, even with the profits posted and the stocks improving.  In my opinion, I think the economy has seen the worst, in terms of banks losing so much money on irresponsible loan practices, which negatively impacted our economy. Yet, with a high unemployment rate, or people living in fear of losing their jobs, consumers aren’t yet ready to spend like there’s no tomorrow (nor do I hope this happens anytime too soon). I, personally, feel like the majority of the population will become more financially aware and avoid sinking further into debt given the lessons learned from their own individual mistakes and the mistakes of large banks.

My view of the population’s habits may seem a bit optimistic, I guess I’m just a “glass is half full” kind of gal. In contrast however, I’m not nearly as optimistic as some realtor’s seem. For instance, my husband was searching for homes in our price range (mid $200’s) through Craig’s list the other day. Many homes in my neighborhood have fallen into foreclosure and banks are now trying to sell them for half of what the original owner paid for them a few years ago. But, some of the homes realtor’s are trying to sell are still around $700,000 or more. I understand how some homeowners may be desperate to sell their homes and do not want to lose much money on them. However, this is quite unrealistic given the current housing market and economy (especially California’s  state economy!).

So where does our economy go from here? And, when will we truly see a marked improvement? In a perfect world, our economy would shrink slightly, compared to what it was. Consumers would be more thoughtful about their purchases, instead of excessively consuming. Our country would begin to manufacture some of our own items, instead of relying entirely on imports from other countries. (Maybe this is too general of a statement, but I’m trying to make a point). Cities and towns alike would build a network around local businesses, supporting each other’s goods and services, generating income that moves within a city and across a county, state, or internationally (new money obviously needs to enter any city or town to drive the economy). Cities and towns would also work on building a better infrastructure of transportation, incorporating pedestrian friendly centers and bike friendly towns to reduce pollution.

When people can feel confident that they are not in jeopardy of losing their jobs, can save money for rainy days, and purchase items using cash, not credit, then I think we will be in the black and on our way to a healthy economy. The lessons learned during the depression of the 1930’s are similar to the lesson’s we are relearning today, don’t over extend yourself, your income, or your credit: live frugally.