United States Heading towards a Depression?

I know, which is probably why you too use the smiley...

I've been quite capable of spending my own money for quite some time now. Let me keep more of it, and I will spend more of it on things like equipment, employees and other things that grow our economy.

Charity for me comes by way of the civic organizations I am a member of. I have found that working with other like minded people and fellow business owners fosters larger creativity and a higher output of giving.

Google Saul Alinksy if you really want to find out just who Obama is. Alinsky, like Obama was a radical community organizer. Alinksy used to use that "Change" thing too. Change to both Obama and Alinksy is exactly what I stated before. Code word for the systematic redistribution of wealth.

 

Hey. I know who he was. I'm an old dude. He became sort of famous for how he approached his work.

I'm pretty sure he organized some group on some issue, wherein every one of the demonstrators occupied every bathroom stall at either O'Hare or Midway for the entire day....or for hours.

I'm pretty sure they got their point or issue widely discussed in the Chicago Press.

The act took place a long time ago. Nothing ever related it to a "Larry Craig" type of airport tryst.


You may not like his politics but you gotta give the guy points for creativity!!!! Also I hope the airport restuarants weren't serving chili that day.

 

Alinsky like Obama is an "agitator". In Alinsky's own words, the job if this "agitator" is to "bring folks to the realization that they are indeed miserable, that their misery is the fault of unresponsive governments or greedy corporations, then help them to bond together to DEMAND what they deserve, and to make such an almighty stink that they dastardly governements and corporations will see imminent self-interest in granting whatever it is that will cause the harassment to cease."

In other words, Obama appeals to those that think the world owes them something. He appeals to the entitlement crowd. Those people (like Obama) that refuse to understand the reality that people who have wealth EARNED it. And those that want it, should do the same. Obamas method is to harass those that have, and placate those that do not.

I've said it before and I will keep on saying it. NO GOVERNMENT IN THE HISTORY OF MAN KIND HAS EVER TAXED ITSELF INTO PROSPERITY.

Obama stands for CHANGE - the same change that Alinksy preached, which is the systematic redistribution of wealth.

How is this accomplished? By annoying the hell out of people until they submit to your demands. By appealing to those that would rather receive than give. By "AGITATING" the people that provide the wealth in this country, and organizing the people who do not to rise up against those that do.

NEVER BITE THE HAND THAT FEEDS YOU.

 

BREAKING NEWS UNEMPLOYMENTS HITS 6.1%

http://biz.yahoo.com/rb/080905/usa_economy_payrolls.html

The economy is in a VERY slow motion crash. The S&P is now at 25x earnings and hasn't been so high since the tech bubble crash that started the 2001 recession.

The housing sector is worse than ever:

The Commerce Department said construction spending declined 0.6 percent in July, double the 0.3 percent decrease analysts had expected.

http://news.yahoo.com/s/ap/20080902/ap_on_bi_ge/economy;_ylt=AhFFlxx2pHAQr_gl4YGNlv5v24cA

The number of unsold properties rose to an all-time high in July to a record high level of 4.67 million unsold houses and condos.

The Finacial sector is a mess:

JPMorgan Chase & Co. revealed Monday that its $1.2 billion in preferred stock in Fannie Mae and Freddie Mac has lost $600 million in value so far during the third quartrt.

Columbian Bank and Trust Co. has failed. It had been hit by losses on soured real estate loans. It marked the ninth failure this year of a federally insured bank.

Housing activity fell for a 16th consecutive month, declining 2.3 percent to a seasonally adjusted annual rate of $357.8 billion. That was the lowest level since March 2001, the start of the last recession.

Investors focused Monday on troubles in the financial sector. AIG fell $1.09, or 5.5 percent, to $18.78; the stock at times fell to levels not seen since the fall of 1995.

Unemployment expected to increase to 5.8%. The number of people filing new claims for unemployment benefits rose 15,000 to 444,000 last week.

 

6.1% is bad and the revised Junes loses to 100k jobs from 51k! Near 100% revision, jeez. I think there was something like 17k new government jobs. You also have to factor in the bullshit from the B/D model the government used, apparently we are making more jobs now than in 2007, lol.

 

The shit is hitting the fan. The US Government will take over Fannie Mae and Freddie Mac as soon as this weekend.

Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and James Lockhart, the companies' chief regulator, met Friday afternoon with the top executives from the mortgage companies and informed them of the government's plan to put the troubled companies into a conservatorship.

The news also followed a report Friday by the Mortgage Bankers Association that more than 4 million American homeowners with a mortgage, a record 9 percent, were either behind on their payments or in foreclosure at the end of June.

http://news.yahoo.com/s/ap/20080906...ants_crisis;_ylt=AobKAmlaY9bZIOztSHN0nyayBhIF

 

And so the fascism begins.

Shame Mia got banned, couldn't figure out why from his recent posts. I would have loved to remind him that this is only a correction.

Apparently Britain has it's problems as well.
http://www.lewrockwell.com/north/north651.html

[FONT=Times New Roman, Times, serif]Britain is facing "arguably the worst" economic downturn in 60 years which will be "more profound and long-lasting" than people had expected, Alistair Darling, the chancellor, tells the Guardian today. [/FONT] [FONT=Times New Roman, Times, serif] In the government's gravest assessment of the economy, which follows a warning from a Bank of England policymaker that 2 million people could be out of work by Christmas, Darling admits he had no idea how serious the credit crunch would become.
[/FONT]​

So now Helicopter Bernanke and Goldman Sachs Paulson want to bring FME and FRE directly under the Public Treasury (the better to rape the tax payer from) and under the Private Federal Reserve System (the better to bail out the bad loans held by their cartel members with the public raping of taxpayers).

This so so outrageous, I think people don't know where to let their outrage begin. At this point, there is certainly no end to the outrage.

In simpler terms for the layman who might be perusing this thread, the government is going to back and secure bad mortgages held by people with negative equity (they owe more than their houses are worth) or cannot make payments on houses beyond their standard of living, to the tune of hundreds of billions, maybe trillions of dollars, at the expense of everyone.

Not just the taxpayer, because there will be no tax increase to pay for this. It will be done by debt, and the printing of money, which means there will be more inflation, which will hit the retired, the poor, everyone except the wealthiest who are able to absorb inflationary stress. If the taxpayer had to directly fund this, they would storm Washington with pitchforks and torches in the middle of the night. The government has found a better way to rip people off without them seeing the thief at any time. Inflation by just printing up a ton of money.

So who ultimately wins? Well, the government wins, because it has more power over private enterprise, and the marketplace so it can sell that power to special interests by creating regulatory legislation that protects big companies from small competitors coming along and challenging them.

And the banks win, because they held bad investments, which should go bad, but instead everyone else is being asked to pay them off so that they do not lose, but every citizen does when they have a lower standard of living because inflation is rising so fast.

Very sad. The concepts are beyond the reach of most people, who don't understand basic ideas like Time Preference or Marginal Utility. Without which, they will ever attribute their misfortunes to Gods and coincidence, not understanding that each night they are preyed upon by a conspiracy of thieves and parasites.

It might be time to chase the rascals out.

PS, at one time, fiscal conservatives understood moral hazard. This is a great big, flaming example of moral hazard. If you think you are a conservative, you better know what that term means.

 

Paulson is preparing to announce the US Government takeover of Freddie Mac and Fannie Mae. The New York Times said most or all of both the common and preferred shares would be worth little or nothing.

Ever since Schumer, Pelosi and Barney Frank pushed the last couple of housing bailouts putting Freddie/Fannie on the hook, I've been saying that they will collapse.

Simply put, people aren't saving money. They have been funding their lifestyles and retirement from asset appreciation in stocks and housing the last 30 years. It seems that we are in 1927 all over again.

If things keep going the way they are going now, the DOW may become worth the price of an oz of gold. GM has already declined to it's lowest price since 1954.

Silver State of Nevada Is 11th U.S. Bank Collapse This Year

http://www.bloomberg.com/apps/news?pid=20601103&sid=aF2bgP7BYQuU&refer=news

 

I'm telling you guys... in 2015 there will be one heck of a buying opportunity. "Once in a lifetime" even.

The trick of course, is actually having some sort of capital at that time.

 

Well, just found out the company we rent a house from (and live in) got notice from the owners of the property that they're going into foreclosure. Meaning - we have to move and vacate.

Yes. This economy is just crashingly awesome. I mean, I've never seen such a booming economy... Oh no, there's nothing wrong with it, besides the fact even the local target and gas stations are laying people off and are not hiring - and I am getting moved out again. Not because of anything I did - but because the owners of the property cannot maintain it anymore, in spite of paying more than average on the rent.

The joys of the neocon lie machine are oh so pretty when you're directly affected.

 

Scramble for Cash as Central Banks Dry Up
Posted by Lew Rockwell at September 6, 2008 10:48 PM

Today England, tomorrow America. A reminder that, as Burt Blumert points out, even the Fed can't repeal the law of gravity.​

 

I remember reading about the Great Depression and someone was quoted as saying (from what I can remember), "We don't really know what happened, but all of sudden there wasn't enough money".

 

Buy the book: http://www.mises.org/store/Product.aspx?ProductId=63

Free PDF: http://mises.org/rothbard/agd.pdf



~

 

I don't believe prices will decline like was the case in Japan. The US housing bubble started in 1998 but the US has had a lot of inflation since. Perhaps we go back to 2001 levels? Right now prices are at 2005 levels and the most stressed areas are at 2004 levels.

The housing and stock bubbles started under Bill Clinton. The stock bubble started in 1994 and the housing bubble 1998.

The UK is in bad shape shape. Looks like the ECB has been doing something similiar to the FED and has lent UK banks almost 800 billion USD and another $100 Billion coming from the SLS.

On the Depression timeline we are in 1927 -- Federal Reserve reduced the discount rate by half a point and purchased $230 million of government securities in an attempt to stop a crash.

The stock market did not crash until October 1929 -- almost two years later.

The stock market actually peaked September 3rd, 1929 with New York Times index of industrial stocks at 452

 

Statement by Secretary Henry M. Paulson, Jr. on Treasury and Federal Housing Finance Agency Action to Protect Financial Markets and Taxpayers

 

Paulson said "I have long said that the housing correction poses the biggest risk to our economy."

Why doesn't the US start improving infrasture in the Missippi so that we can increase exports.

Supporting a bubble will only lead to more damage.

 

HAPPY DAYS WERE HERE AGAIN: How the Housing Crisis Happened
A lot of people made a lot of money in the housing market... banks, mortgage brokers, contractors of all trades, builders, investors, agents, appraisers, title companies... and all the support services that feed well when those are successful, which includes most of America.

FREE MONEY: APPLY HERE
Unfortunately lending guidelines kept getting increasingly loose... 100% loans, interest only loans, fairly extreme ARMs with volatile indicators but low annual and life caps... and my favorite... the Nehamiah (and similar) programs where the sale price could be raised and then a semantic shell game took place to make it look more legal than an "up-for-down" that had previously warranted Federal Prison time.

CANT AFFORD IT? COME TO XYZ LENDING
To make it more fun, even with looser guidelines...

• Underwriters that shot down unqualified loans or appraisers that wouldnt somehow *find* value were criticized as "non-business-friendly" by the upper management at lending institutions.
  
• If a mortgage broker failed to get someone a loan he wasnt possibly capable of paying, buyers and agents shopped for another and never returned to the one that failed.
  
• If a Realtor turned away a buyer he considered unqualified, there was another Realtor who knew just the right lender.
  
• Managers of lending branches were told to meet a certain quota or decide which of their employees to lay off. As a result their people often did what they had to do to remain employed, and the managers were aware that if they didnt "write off" on bad loans either they or their employees suffered.

DARWINS REVENGE
My wife was an under-writer for Countrywide, she finally quit rather than risk a potential Federal audit for being "business friendly". Generally anyone that took appraisal or qualification guidelines seriously could rest assured they would soon be unemployed unless they played along. Some quit, some played, in the end most involved were writing a lotta dumb paper. The net effect... the system weeded out almost everyone that couldnt play the "make dumb loans" game properly.

REALITY CHECK
In the end the industry made billions of dollars of loans that were unsound and sold billions of dollars of houses for people that had pretty much no way to pay for them. The buyer wasnt a victim btw, he wanted to have the granite counters and the pool whether he had a supporting income or not. He had to show off for his friends.

THE ROADRUNNER EFFECT
Now the money is not there, houses are being foreclosed, ancilliary services are laying off employees, foreclosures are hurting the home values of even the people that DID make solid purchases... and the industry as a whole has done the economic equivalent of Wile Coyote running about 10 steps past the edge of a cliff and is now on thin air.

He looks down, sadly waves... then plummets like a rock into the canyon. We are Wile G Coyote, and sadly we havent even hit the bottom.

--------
Rob is a 25 year veteran of the Real Estate industry and is now enjoying his 2nd industrywide collapse. Once in the mid 80's just wasnt enough. Much of his Real Estate related activities today are spent as a court appointed Receiver running interference with mortgage companies so people's houses are not foreclosed before they sell.

 

Rob, unfortunately your industry was the beneficiary of an artificial credit boom facilitated by the FED creating excess and massive amounts of credit.

To their detriment, most people don't understand this, and thus start to believe that the good times of increasing prices, purchases, demand/production and easy credit will continue indefinitely. Like the lie of the early 20th century that the age of endless prosperity had arrived.

A lot of people got drunk, not understanding that at one point the bar will close, and they will have to go home and sleep it off.

I hope you don't end up getting hurt too bad. Maybe if such a cycle comes around again (I doubt it in the short term), you will better be able to capitalize on selling high, and buying low.

 

Reminds me of an interview that I watched on one of the business channels.

I don't remember who the guest was, but he was a well known US fund manager.

He was asked if he thought Fannie, Freddie and other institutions would get bailed out in future.

He said that he was sure that the Fed would bail them out, but his bigger worry was who would bail out the Fed....

 

I took a look at the real estate site in your sig. Man, Texas is cheap. The $80,000 house would list for 349k and the $150,000 house would list for 500k.

Prices in my area are still at 2005 levels. Prices still have a long ways to go south. Some of the forclosures are listing at 2004 prices. But taxes are up 20% from a few years back.

With increasing unemployment and tighter lending standards, the banks are in for a bloodbath.

The FED can print more money. The risk is a dollar collapse.