Dean Kitakisand his wife, Joann, try to get their mortgage modified in Los Angeles last week. Dean lost his job and had a nervous breakdown. The couple is having trouble making their payments.
Bad economic news has seemingly been unremitting in recent years, but Monday's market dive was notably bad. Breaking reports of drops — a hundred points at a time — fueled even more investors to sell.
"The worrisome thing is that this very pessimism may be adding to the nation's dour economic condition, msnbc.com senior business writer Allison Linn observes:
"It's definitely a vicious cycle. There's no doubt about that," Werner De Bondt, a finance professor with the Richard H. Driehaus Center for Behavioral Finance at DePaul University in Chicago. "The difficulty is to get out of the vicious cycle."
De Bondt puts Americans feelings about the economy into three buckets:
• Anger about the financial crisis and bailout.
• Anxiety about the future.
• Simple resignation about the entire thing.
"People have had it, you know, they've had it with this whole thing in Washington, with Wall Street," he said. ...
Nevertheless, that kind of thinking can overshadow any positive economic news or momentum. De Bondt worries that it has become so common to be pessimistic, and even to question whether the current economic malaise spells the end of America as we know it.
“What is amazing is that I think we are slowly giving up on the idea that we ourselves — (and) definitely our children — will have it as good as we did. That is really amazing. It’s undermined the quote-unquote American way,” De Bondt said.