United States Heading towards a Depression?

The bottom line is that Americans are not saving money and have relied on asset appreciation for the last 25 years to fund their lifestyles and retirement.

The Dow can not keep rising 1000 points per year and housing prices increasing 20% per year when the economy is based on deby.

Japanese households have $5 trillion in savings and the average american household is in debt.

It's a gamble. If Congress would have passed the bailout the stock could have went ot $10+ per share.

 

Much of this problem can be traced to the Glass-Steagall Act that was passed in 1933, and prohibited commercial banks from dealing in investments, and prohibited investment banks from doing commercial banking activities.

This act was repealed in 1990 and since then we have had the quadrillion dollar off balance sheet derivatives cocktail and both commercial and investment banks all leveraging themselves to unmeasurable levels.

 

Wachovia is near collapse. Citibank and Wells Fargo are in a bidding war.

Investor concern about Wachovia mounted Friday after JPMorgan said it would take a $31 billion write-down on loans it acquired when it took over Washington Mutual Inc's banking unit on Thursday.

The write-down raised worry that Wachovia might have to take much larger write-downs on a $122 billion portfolio of option adjustable-rate mortgages it largely inherited when it bought California lender Golden West Financial Corp in 2006.

http://news.yahoo.com/s/nm/20080928/ts_nm/us_wachovia

 

Wow checked some of my Mutual funds today,

My sons has dropped almost 33%! I've lost somewhere around $15,000.00 since last I checked in the one account alone. Sure it could be a lot worse, others have lost much more, still doesn't make me happy.

 

Hon Dad, are you for the Act (or what it attempted to regulate, anyway), or are you for the deregulation inherent to the repeal?

My understanding historically is that it was under Reagan that the Act's provisions were relaxed - which encouraged "innovation," but significantly increased vulnerability in the financial services sector; and under Clinton, at the behest of Greenspan and Wall Street, the deal reached finally put Glass-Steagall to death. Phil Gramm - let's all remember, the guy working for McCain's campaign who called America a "nation of whiners," was the co-sponsor to the key legislation killing Glass-Steagal.

 

I guess things are getting worse every day...

This chart looks extremely scary. And all of it happened because US government decided not to save it's own country.

 

Depresion is on the way, store up on food storage and show love to the family everyday...
I just lost my shirt

 

Happy days are here again
The skies above are clear again
Let us sing a song of cheer again
Happy days are here again
Altogether shout it now!
There's no one who can doubt it now
So let's tell the world about it now
Happy days are here again
Your cares and troubles are gone;
There'll be no more from now on
Happy days are here again
The skies above are clear again
Let us sing a song of cheer again
Happy days are here again

http://www.youtube.com/watch?v=gqsT4xnKZPg

 

Wow. But look on the bright side, at least you got money in mutual funds. Many of us don't have any money in the stock market not because we don't want to but we can't afford it .

 

The Federal Reserve is regulation.

I'm for the ending of reserve banking system and the establishment of a gold standard. People will only deposit and invest their money in banks with proven reserves then. It's the ultimate deregulation.

 

I was handling a receivership for the county courts in the late 90s (read "dotcom bust") and they had a few hundred thousand dollars in mutual funds that were hemhoraging value at roughly the same speed their lawyers were eating it up. Finally cashed out the mutual funds to keep them from losing every dime (which in effect just saved it for their lawyers to get, but that was their choice).

Only point is what we're seeing right now isnt daily life as we know it but it isnt a new Armegeddon. We've been thru this same thing about a decade ago. If we see the real bad stuff theyre predicting, what we're seeing now will be considered easy.

Yeah I know, I'm the freakin bluebird of happiness. Sorry bout your losses tho.

 

Well they have lost much more than that, that was just since the last check of them That's only one of my investment accounts/offices, I shudder what others might be.

That's why for funds I usually don't check up on them.

 

The US is headed for recession in 2009 and the dow could go below 8000.

Howver a lot of people that sold in the 1987 market panic lost big and didn't sell were making money by the end of the year.

 

I'm actually looking at putting a small amount into the market, but at a slow steady pace. A few hundred here and there.

 

Bernake poured 600 billion into the world financial system yesterday and credit markets are still locking up. The $700 billion bailout is a drop in the bucket and won't solve anything except.

Real Estate is becoming a good investment. There should be some good deals in 2009 if you are sitting on a pile of cash.

 

Real estate is ALWAYS a good investment. If you are going to put your money anywhere, put it into tangible assets that appreciate. Real estate is one of those things. If you want to put money into a financial institution, use a credit union, not a bank. I don't own a single stock, bond or other worthless piece of paper. I am now, and have pretty much always been asset based. Sure, it's not as liquid, but it is sound and secure and always goes up. Regardless of the drop of values in the housing market, what I own is still worth more now than when I bought it, and ultimately have more value then I've had to invest in it.

The best thing that can happen now is for the financial markets to collapse, correct, and consolidate.

Pumping more money into the system does nothing else than restore short term confidence in a lender ability to give away more money to morons that do not have the ability to pay for it.

I'm pretty much with Trump. Get rid of Mark to market, and let things collapse. Oil will drop to below $20/barrel and the shit heads in the middle east will not know what to do. They are the ones that have been soaking us dry by taking our cash every year via oil, then buying into the market. Let them take a bath for once.

 

Even in a global depression oil won't drop below $50. Long term the US dollar is toast.

Real Estate has had periods where it hasn't gained and real value for 20 years.

Stocks are assets. They are the claim on the equity of a Business and they can produce passive income via dividends.

 

I believe it probably will be and this is why http://www.youtube.com/watch?v=IWMmVIAtHAU

 

2 more countries decided to not deal in US dollar currency: Argentina & Brasil ...

 

I have just bought some oil refinery stocks. I bet US House of Reps will pass the $700B bailout package this weekend, and I would be able to cash in on Monday. Its a gamble...