United States Heading towards a Depression?

Fannie Mae is bleeding money after a second-quarter loss of $15.2 billion.

Freddie Mac is expected to report its quarterly results on Friday.

Fannie Mae seeks $10.7B in US aid after 2Q loss
http://finance.yahoo.com/news/Fannie-Mae-seeks-107B-in-US-apf-3979081619.html?x=0

FHA is the new subprime

 

I hope they all bleed to death.

 

They is you buddy!

That's the bitch about living in a democracy.

The majority voted for depression and so everybody gets a depression -- not just the people who voted for it.

Have you seen the freakish growth in the monetary base?



The only reason we're not in a hyperinflationary spiral right now is that the fed recently started paying banks to deposit money. This is encouraging the banks not to make loans and is, as a side effect, keeping hyperinflation at bay.

When the banks start loaning that money out...

 

European Central Bank chief Jean-Claude Trichet warns worst yet to come.

http://www.telegraph.co.uk/finance/...o-come-warns-European-Central-Bank-chief.html

As soon as people regain confidence, there will be to much money chasing too few goods and services.

Over the next two years the US will need to borrow between 3 to 4 trillion dollars. Interest will need to go up or the Fed will need to print money. Either way we are in trouble. Higher interest rates would kill the recovery. A weak dollar will cause gasoline prices to raise.

 

And that's just to cover the industries that the Obama administration has already nationalized.

Nationalizing healthcare will cost more than the other three combined.

The weak dollar is half the cause of the current stock market "rally". Stocks aren't becoming more valuable, the currency we measure them against is simply less valuable.

The other half of the reason, of course, being irrational exuberance pushed by the mass media.

The economic system which has nurtured American life for more than two centuries is being systematically destroyed and the mainstream media is publishing stories about how nice Obama is to bring a reporter cupcakes on her birthday.

 

The best thing anyone could do is, eliminate Fannie, Freddie and the FHA. Any other private institution in the same boat; let them sink.

We need our economy to continue to shrink before it can expand again. Failure is a must as it ushers in consolidation and innovation, and eventually an expansion again.

Take a look at DOT COM / IT... We experienced a lot of failure in the 90's. Many of the big companies the media and liberals assumed that we could not live without failed, went poop and were picked apart and built into better mouse traps. This was all done without government intervention, control or aid.

Sometimes things just fail. When they do, its time to do something else because something that fails, will continue to fail.

 

I concur. Some people are so focused on control that they fail to understand and accept that change is the only constant.

If these dipshits had as much power as they think they need, we would all still be riding to work in wooden wagons and using leeches to drain our excess blood.

 

T-bond rates are going up again. They are closing in on their 09 highs from June. That is a sign that they are having trouble auctioning the debt at lower interest levels. People are starting to realize there is a future of inflation. The only reason why it went down last month temporarily was because the fed I believe bought some of the debt. I wonder if they will do it again soon?

 

Barney Frank is a tricky banking queen. He will great rid of Fannie/Freddie so that he can get the trillions in bad loans off the books. Then he will create a new Federal Mortgage Bank to make trillions more in bad loans.

The interest alone on the national debt will bankrupt the US. Currently we are spending approx. $500 billion a year in interest. An increase in interest rates as well as continued high borrowing will push the interest to $1 trillion a year.

 

He really gives gay people a bad name.

http://www.youtube.com/watch?v=yrfPMa3lONU

What a scumbag!

 

(BEGIN VIDEO CLIP)

REP. BARNEY FRANK, D-MASS.: I think this is a case where Fannie and Freddie are fundamentally sound, that they are not in danger of going under. They're not the best investments these days from the long-term standpoint going back. I think they are in good shape going forward.

They're in a housing market. I do think their prospects going forward are very solid. And in fact, we're going to do some things that are going to improve them.

O'REILLY: Oh, none of this was your fault! Oh, no. People lost millions of dollars. It wasn't your fault. Come on, you coward! Say the truth.

FRANK: What do you mean coward?

O'REILLY: You're a coward. You blame everybody else. You're a coward.

FRANK: Bill, here's the problem with going on your show. You start ranting. And the only way to respond is almost to look as boorish as you. But here's the facts. I specifically said in the quote you just played that I didn't think it was a good investment. I wasn't telling anybody to buy stock. I said it wasn't a good investment.

Secondly, I wasn't presiding idly over this. I was trying to get the regulations adopted. We got them adopted in May.

O'REILLY: Look, bottom line is you're there two years. Bottom line is stock drops 90 percent.

FRANK: Yes.

O'REILLY: In any private industry, you're out.

FRANK: We couldn't get…

O'REILLY: In any private concern, you're out on your butt. But not here in the federal government.

You can come in and make every excuse in the world.

FRANK: I'm not making excuses.

O'REILLY: Blame everybody else in the world and then call me boorish.

FRANK: I'm not going to be bullied by your ranting. You can rant all you want, you're not going to shut me up! The problem was that we passed in 1994, in fact.

O'REILLY: Now we're back to 1994. This is bull. This is why Americans don't trust the government.

FRANK: No, this is why your stupidity gets in the way of rational discussion.

The fact is it was 1994 that we passed a bill to tell the Fed to stop the subprime lending. We tried to get them to do it. The first time we were in power again in 2007, we passed the bill to regulate Fannie Mae and Freddie Mac.

So during the two years I was there…

O'REILLY: Look, Congressman, you tried to put a happy face on this in July.

FRANK: I'm not putting a happy face on anything.

O'REILLY: You tried to — and now you won't take the.

FRANK: No.

O'REILLY: Look, at least Cox is man enough.

FRANK: I said….

O'REILLY: At least Cox is man enough to say he screwed up. You're not.

FRANK: Hey, Bill. This manliness stuff is very unbecoming from you. I don't see any…

O'REILLY: Cox is man enough to say he screwed up. You're not.

Full Transcript:
http://www.foxnews.com/story/0,2933,432173,00.html

 

Actually all I see here is Bill being a grade A douchebag. I care not for his blabbering vagina of a mouth that gets loud instead of getting intelligent. If you want a real debate, you sit two people down, and you let them make their points, and you make your counter points. I know this is not exactly related to this discussion of depression, but I find the lack of discourse and actual conversing disturbing.

This is not the news I watch, listen to, or heed in any way. Its all about sound bites and Bill trying to look good. I don't listen to Sean, Bill, or Rush because they're not intellectually honest, and they represent their side as holier than thou.

In a country where the news media is like a branch of pre-judgmental governance and propaganda ministry of the damned, I cannot care for these shows, or people in terms of their information or sound bites. If I had a news network, there would be enough time for each side to make their points, counter points, and discuss it rationally without RESORTING TO YELLING OVER THE OTHER PERSON BLAH BLAH I AM BILL I AM RIGHT I AM YOUR NEW GOD!

Sheesh, he was a history teacher and he constantly gets history wrong.

 

I see where the representatives of the tiny minority but unbelievably loud right wing extremists are at it again.

Hey you partisan know nothings....the recession....it started during the Bush administration.

Like virtually all recessions it arose out of a bubble of hyper activity. You know when the hyper activity occurred? During the Bush years. You know when it took root and went bananas? When Bush was pres...and the GOP controlled Congress?

I guess the loud mouthed extremists forgot that little itty bitty point.

In point of fact the American economy broke. Simple. Too much leverage on the consumer and financial industry side. Too much risk.

The wierd thing is it occurred in an industry prone to this kind of hyper activity and the signs were there that the leverage, crazyness in the housing markets, and volume of bad loans were way out of whack.

Hey did anyone in the govt say...whoah baby...lets stop this.

Nah....the loud mouthed highly partisan politically charged minority base of the party would cut off one's testicals if they violated the totally theoretical aspects of the party by putting the reins on an industry run wild.

So....we all pay with an enormous recession.

As to some of the specifics from the non-economic/all partisan politicians from above:

@Mia: Of all the non-economic non educated purely partisan statements about the causes of the recession....c'mon...CRA and Carter....something you've been endlessly repeating.

Last I recall Carter was out of office in 1980...uh...that is 29 years ago...and CRA had no significant upward or downward impact on overall impact of housing to the overall economy for well over 20 years....and then the slew of bad loans were significantly made by lenders not subject to CRA regulations.

Which part of that analysis has more impact on revealing the ludicrousness of your claims?

The part that CRA went into effect in the 1970's...when recessions occur because of bubbles?

Or possibly the explosion of cr@ppy mortgages was made by lending offices that were not subject to CRA regulations?

How uneconomic and dumbly purely partisan can an argument be? Assuming this is your standard fare....why would anyone listen to any of your comments as they have ZERO economic foundation?

As to our friend Will...who chickened out and ran away from America but is still commentating and telling people how the American economy should work.....

For the outstanding comment "people voted for a depression"

Hey Will, maybe you were too busy packing up and running to pay attention to the fact that the recession started in 2007 and hit a devastating peak in Autumn 2008 which is of course before the election.


Economies work their way out of recessions. There is no magic bullet.

For those who spend all their time in economic theories I would suggest the following: Work in a market.

I have. For about 20 years I was full time as a commercial agent/broker in commercial real estate in one of the larger commercial real estate markets in the country. I brokered deals and bought for my own account.

I lived through an industry DEPRESSION. The nation might have had a recession in the early 90's...but in the industry it was a full blown DEPRESSION.

Commercial real estate conditions were far worse then than currently. As bad as things are now...and they are trending down...things were dramatically worse.

The depression hit the entire US in first or second quarter 1989. Geez, I was just doing investment sales at the times and had 12 deals that had progressed far enough along for me to put a probability number to them as to possibility of closing. Two of them were virtually ready to be closed with one of the two having had the final contract language fully negotiated by attorneys. It was waiting for signature.

All deals died. All institutional money targeted for commercial real estate lending was pulled off the table. That included foreign money which was the lender for the deal closest to be closed.

There were no sales for about 2-3 years. None. There was no liquidity in the market.

Buildings in bankruptcy had no access to liquidity to rebuild space for new tenants. The markets collapsed.

I bet 30% of the people connected to the industry lost their jobs.

I remember the first sale of consequence in my large regional market. It didn't occur for at least 2 years after the market collapsed. The building sold for $0.25 on the pre collapse price.

Currently this strong market is in a state of recession....not depression. The most prime of major investment properties have probably lost about 25% on price from pre recession values.

There are deals/sales being made. Far fewer than before the recession occurred. But unlike 1989-1991...there are sales. Big difference.

There are new starts in construction for speculative buildings. Very few...but I can walk down the street and see 2 buildings going up right now.

Basically there was virtually no new speculative office construction in the US from about 1990 to about 1997. Pretty much nothing.

Hey Will....you know how we pulled out of that recession/depression? People here worked. Oh....you can't really work here when you run away to another country. Doesn't stop one from pontificating....but doesn't help the US economy one bit.

Now for a bit of real news....no theories...no politics...no partisanship.

I heard from a pretty high up friend of mine working for what is the largest business of its type in this region, which has both business to consumer and business to business sales...that it has been running at its all time slowest pace for this time of year in over 20 years. All time worst in 20 years! Startling news. And not good.

I actually gave this person the lead for that job. I know the business fairly well, the industry fairly well, and some of the execs fairly well.

If my talents, knowledge and skills were oriented toward that industry and I either had capital or access to it....man is this ever the time to go after the big boys.

I'd compete on price and value. I could get space cheap because there is an increasing amount of vacant space. I could buy the equipment I need cheap. I know enough about the industry to know there has always been a discount investment opportunity into the industry when it comes to investment....and it is clearly better right now.

I'd provide a product/service that emphasizes more value for less money. I'd market and sell like there is no tomorrow.

If I did most things right it would be a great opportunity to grab market share and business. Absolutely great. There wouldn't be a better time.

In time that industry will rebound...and then I could grab better prices.

There is nothing revolutionary about those ideas. Its application of standard business practises.

Its called..."working the market".

That is so different than all the political loudmouths that don't participate but love to pontificate about how markets work and which way the economy is going.

 

I scribbled this into the Fort Liberty Blog yesterday:

Number of Long Term Unemployed Hits New High - Again

In June, the number of long-term unemployed Americans hit a record high of 4.4 million.

This morning, the Bureau of Labor Statistics (BLS) released unemployment data for July and the number of long-term unemployed jumped by 584,000 to over five million.

Long-term unemployment is defined as looking for a job, unsuccessfully, for 27 weeks or more. That’s going half a year without being able to find a job.

This July, one in three unemployed Americans are people who have been searching for jobs for six months or longer.

The average length for an American to be unemployed also set a new record of 25.1 weeks.

The official unemployment numbers do not include 2.3 million Americans who are unemployed, but have not searched for work in the last four weeks. Many Americans have simply given up on working.​

From the Mailbag

In my email this morning I received a link to an article titled The Black Plague of Debt. It contained a few interesting facts:

• Already, in this year’s budget, 21 cents out of every dollar of federal income taxes is needed to pay just the interest on the debt.
• The federal budget now accounts for nearly 30% of GDP – the most since WWII.
• The US deficit is 13% of total annual economic output. Compare that to Russia at 2.6%... Spain at 6%... France at 5%... Brazil at 1.3%... Even Argentina has a much smaller deficit than the US – at only 3.6%.

And some unpleasant predictions:

• Excessive government borrowing will push up mortgage rates and trigger another leg down in the housing market. Huge numbers of prime borrowers have already begun to default on their mortgages, triggering what is destined to become another wave of toxic asset writedowns at banks
• Budget experts estimate that federal taxes would have to rise by 64% to cover the unfunded liabilities of the federal government. And that doesn’t even include your share of the cost of the ongoing multi-trillion-dollar bailouts and stimulus programs.

Remember folks, this is the change we voted for!

 

got this mail today

 

The middle class are the biggest beneficiaries of government programs and services including college loans and grants, medicare, public parks and all the free stuff they get like cash for clunkers and tax credits for buying a home.

However, the middle class doesn't like paying the bill. So you see them shifting back and forth between the democrats and republicans.

There's plenty of business opportunities. The issue that I see is that we are in a "see-saw" economy. It's almost impossible to see what's coming in the immediate future. You could be making money hand over fist today. But your business could dry up overnight.

I see businesses setting up in cheap space. But I'm wondering what will happen five years down the road and the landloard is tripling the rent.

Correct. Anybody that can hit the ground running has a definite advantage.

There was a loss of 247,000 jobs in July. The economy needs to create 125,000 jobs per month just for the unemployment rate to break even.

 

More facts about the current depression:

• This depression has been the most punishing job destroyer in at least 60 years, slashing a net total of 6.7 million jobs.
  
• 14.5 million people were out of work last month.
  
• Personal income fell 0.1 percent in June, excluding the one-time benefits of the government's "stimulus program."
  
• Wages have fallen a total of 5 percent over the past eight months.

 

It just shows how dangerous it is when you put a moron as president for 8 years and let his incompetent or corrupt cabinet to go to war for profit or destroy the economy based on stupid ideology.

 

Fed is getting ready to probably stop buying treasurys. Once they stop doing it, get ready for a huge spike in Higher interest rates soon.

http://www.marketwatch.com/story/fed-seen-ending-treasury-buying-as-recovery-looms-2009-08-07

 

Are you talking about Obama? Because he has increased troops in afghanistan and they just had their deadliest month last month. It looks like Afghanistan is the next Iraq.