Some Chicagoans nervous about economy

January 22, 2008 4:09:32 PM PST
We didn't find many signs of economic panic in Chicago Tuesday, but we did find fear and nervousness about a possible recession taking root. As happened all over the country Tuesday morning, stocks at the city's major exchange opened dramatically lower.

As Chicago Mercantile Exchange stock traders went about their business, at gas pumps and in city supermarkets there was a more subjective view of the economy.

"It stinks," said Chicagoan Elena Kezeles. "There seems to be an overall impression in everyone's mind."

"Whatever store you go to, whatever you got to pay, way over your head," said Chicagoan D. Hardy.

In December, the Federal Reserve bank's economic activity index for Chicago was at its lowest level in four years.

"A lot of people just coming out of college or just coming out of graduate school can't find jobs or can't find jobs that will actually pay their rent, which is a huge problem," said Chicagoan Erica Wovsaniker.

The Bush administration's plan to stimulate the national economy with tax cuts apparently did not impress stock traders overseas where overnight markets fell dramatically.

"When the government's worried about the economy, first we get a big relief, they're going to help us out. And the more we think about it, they say we're in trouble and they're coming up with the stimulus plan, we're in bigger trouble than we think we are," said Suzanne Bodlovic, CME stock trader.

With housing values continuing their decline, the tumbling stock prices and the effect on 401K retirement plans are the back end of an unprecedented one-two punch in the personal economic nose.

"I'm nervous. The stock market is an indication of my nervousness," said Chicagoan David Simberoff.

But money manager Jason Tyler advises patience. He says recessions are just part of the business cycle, and if you have a few bucks laying around, he says now is a great time to buy stocks.

"This is the time to find these once in a lifetime opportunities to get great companies at cheap prices," said Jason Tyler, Ariel Mutual Funds.

In Taylor's view, the big warning for major economic problems would be a markedly higher unemployment rate. Taylor says, as long as people are working, they can pay their debts and get through the rough spots.