Here is a report from a young Turkish gentleman whom we met when he was studying in the U.S. Both his parents are hard workers and have built small businesses which enabled him to study abroad for two years. A close relative married a Saudi gentleman, so he has visited Saudi Arabia extensively. He recently completed his compulsory military service in the Turkish Army. In other words, he is an acute observer with broad experience in many cultures, and his report cannot be dismissed as naive or uninformed:

The climate here is changing in a bad way. We started to get less rain and yesterday even there is 10 days to may (still april) I saw 30 degrees celsius on the thermometer of the car yesterday and it didn't drop below 25. Last year the water resource for the city was not filled so we were close to the edge of getting out of water. Last year in Istanbul we saw 42 degrees C maximum. I can feel that the seasons have moved like 1.5 months ahead.

Right now my current job here is boring. It is mostly related with budgeting the operations in Turkey. Business life and economy here is getting worse and worse. They say that a big crisis is coming. I want to change my job but it is risky in these times. The salaries have started to drop very very low. The population around the Marmara bay region is rising, lots of unemployed people. Wages are dropping in every field.

The gas price is around 2.5 USD per liter here. People started to buy diesel powered cars and switched to LPG but this is followed by government tax increases on LPG and diesel. There is a big plan for the middle east and whats going on the border is just a part of it. My grandfather did his military service over there (Iraqi/Turkish border) and once he told me that he saw petrol coming out from rock cracks. That region has big underground resources and also the southeastern part of Turkey. I believe the crisis is created in order to change the borders and let big international oil companies get the advantage of the resources.

I believe worldwide growth has stopped. You see it with the stopping of mortgages in USA and inflation, but the signs here are more apparent. Here every capital owner became a real estate developer, for the last years the construction sector made a big expansion here. Right now it has a sharp stop. Some investors didn't even think if there is enough demand in the market for the price they are building flats for. Industries for construction have made great income but investors in housing has turned their money into matter that's not going to be sold. Now we started to receive the international crisis, it shows its signs with the high exchange and interest rates. I believe many people will have big losses. Hard days are approaching for everybody.

Here in Turkey the government is based upon a group that wants to turn the regime into an islamic regime in a hidden way, lots of arguments appear here between the secular regime supporters and the islamic sides. This has started to effect peoples daily lives. Women are disturbed for their clothing sometimes. In Istanbul some areas have European type modern living whereas some parts look like the most strict parts of Iran. You can see similar type of clothes. We are based upon a democratic regime but the Army needs to show some reaction in order to keep the secular system. Many people think that this will lead to an internal war.

Meanwhile, in the "do you really think you work too hard?" file, here is a snippet from a good friend in Japan:

Haruyuki is really busy. He leaves home for work at 6:30 and comes back home around midnight.

From China comes a personal report of the Chinese stock market mania. Two years ago, the Shanghai stock market began its bubblicious ascent from 2,000 to 6,000, and during the last wild leg up last year the media was reporting thousands of brokerage accounts were being opened every day by regular Chinese citizens eager to join the free-money frenzy. I asked one of our close Chinese friends if anyone in her family had entered the fray, and here is her report:

My father bought stocks from 10 different companies in 2007, and he made money in 2007. But in 2008, according to him, affected by the US economy, the stock market has dropped from 5900 points to 3140 points. He has around 10,000 RMB (about 8 months of his pension) that is stuck in the stock market (he won't sell, he will just wait). His roommate bought stocks from two companies, made some money in 2007, but now he also has around 6000 RMB that's in the market.

So these retired gentlemen had invested between two and four months' average wages in the stock market--not a giant sum but a substantial one, roughly equivalent to $6,000 to $10,000. (Or figured another way, eight months of Social Security pension would also equal about $9-$10,000, using $1,100-$1,200/month as a typical full-retirement Social Security payment after a lifetime of work.)

And just like we did (or at least I did) in the 2000-2002 dot-com stock market bust, they are holding on as their portfolios go into the red, waiting for a recovery that will never happen (bubbles don't reinflate a year or two later).

From this and other personal reports from China, I think we can safely conclude that ownership of Chinese stocks became very widespread as the bubble took off, with a high percentage of everyone with savings (i.e. most people) joining the investing/speculating bandwagon. It also seems safe to conclude that like every other human being, those who saw their investments rise to dizzying heights in 2007 are loathe to sell now and take big losses. They will wait for recovery, in essence trapping their capital to avoid losses.

If the Chinese stock market continues its reversion to the mean (decline back to 2,000 or lower), then the losses will be widespread and significant. Will those losses cause widespread social disorder? Not likely, but they will certainly effect the investors' sense of wealth and prosperity. And as we all know, the "reverse welath effect" is a key factor in recession: once you feel poorer, you cut back your spending.

These reports suggest the recession will be global, and more painful than the cheerleaders/ mainstream media is reporting.


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