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United States Heading towards a Depression?

Discussion in 'Politics & Religion' started by decoyjames, Dec 27, 2007.

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  1. Mia

    Mia R.I.P. STEVE JOBS

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    #3181
    We're fast becoming a society of entitlements. Once that dependency goal is reached, then the real end game can be met, which is total control and domination.
    Someone should take out Pelosi.
     
    Mia, Feb 17, 2009 IP
  2. Firegirl

    Firegirl Peon

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    #3182
    HOPEnosis, rofl.

    That's exactly what it is too!

    That made my day right there.....
     
    Firegirl, Feb 17, 2009 IP
  3. guru-seo

    guru-seo Peon

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  4. sachin410

    sachin410 Illustrious Member

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    #3184
    GM doesn't have good cars to offer and the recession is worsening.

    every 2 months the company will be going to the government and begging for a new bailout.

    it's a black hole....the sooner the company shuts down, the better.
     
    sachin410, Feb 17, 2009 IP
  5. guru-seo

    guru-seo Peon

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    #3185
    I agree, but what will happen to the hundred of thousands of people that the company employes? And all of their family members? Scary times.
     
    guru-seo, Feb 17, 2009 IP
  6. ncz_nate

    ncz_nate Well-Known Member

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    #3186
    :D

    [​IMG]
     
    ncz_nate, Feb 17, 2009 IP
  7. bogart

    bogart Notable Member

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    #3187
    The spending package is crazy. Obama is promising transparency but rushed the biggest spending package in history through Congress before anyone could read it. Before we spend this kind of money the spending should be properly debated and the American public allowed to see what is being spent.

    The stimulus package should have been limited to 'stimulus' and $200 billion at most.

    What is going to happen when the economy really bottoms and we have spent up everything. Print money?


    Reagan gave the poor government cheese and the poor were happy to get it.

    Today, people expect the government to pay their mortgage on a 500k home, give them a $1500 stimulus check, and give them broadband internet.
     
    bogart, Feb 18, 2009 IP
  8. sachin410

    sachin410 Illustrious Member

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    #3188
    there is nothing sacred about the auto giants.

    if auto companies can be bailed out to protect jobs, then every business in US - small or big, deserves similar government assistance.
     
    sachin410, Feb 18, 2009 IP
  9. Mia

    Mia R.I.P. STEVE JOBS

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    #3189
    Mia, Feb 18, 2009 IP
  10. smatts9

    smatts9 Active Member

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    #3190
    smatts9, Feb 18, 2009 IP
  11. earlpearl

    earlpearl Well-Known Member

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    #3191
    For those who posted from post 3161 to about 3167 trying to compare this recessionary period to past ones I think you are mistaken.

    We are in a brutal downward cycle. There are no signals currently saying things are flattening out or improving. We have a ways to go downward.

    Inventories of everything are high for manufacturers and retailers. There is little buying. That means there is no incentive to make things. Manufacturing is weak world wide. Take a look at Japan, a world wide manufacturing and exporting kingpin. Its in a worse downward spiral than the US and most of the world most recently.

    US citizens are suddenly saving like crazy. No surprise. Everyone is worried. That big upshot in US savings might be good later on....but right now it is seriously slowing all buying....adding to the downward spiral.

    Financial debt is still miserable and there are more bad hits to occur over the next months and years. Commercial real estate loans look especially vulnerable as a result of a massive amount of 3-7 year interest only loans written since the early 2000's.

    First off the institutions don't want to refinance now. Secondly the future looks grim for commercial real estate. Take these two articles, the first having been published just a few hours ago......http://www.bloomberg.com/apps/news?pid=20601087&sid=aUpSJI3LmOFU&refer=home

    Having worked in commercial real estate since the early 1980's and owning some now I'm very familiar with the situation.

    As that article states, when vacancies start occurring and sublease space overwhelms the market....real estate turns brutally soft. Office buildings are seeing increasing vacancies.

    Nationwide retail is taking a hit like I've never seen. For those who compare current status to the early 1980's I can tell you that in the early 1980's national retailers had expansion plans, albeit in select markets. Right now there are virtually no retailers with expansion plans. Vacancies are increasing with banruptcies such as Circuit City and Linen's and Things. Local and regional retailers are hunkering down. I've got no current vacancy or leases coming up shortly....but any retailers hurting could shut the doors. I'm anticipating problems. Friends with vacancies are scampering like the devil trying to make deals.

    I've heard 2nd hand about a friend's relative with heavy holdings in Florida of certain types of commercial real estate. One guy with certain holdings since the early 90's has great occupancy. He has cut rates dramatically and swallowed up tenants. Competing landlords have been slow to act and they are suffering higher vacancies than in the last 2 decades. The guy with virtually full occupancy has virtually no debt.

    On the Washington DC region this report just came out......http://www.washingtontimes.com/news/2009/feb/16/dc-office-space-retail-real-estate-goes-begging/

    Some of the sources in that article are better than others. The crux of DC region real estate is always Northern Virginia....and that article misses discussing that scenario....but the trends are weakening no doubt. Locally I've never seen less demand from the tenant side. That doesn't mean its totally vanished....its just dramatically weak at this point. I have experience and instincts that suggest where the tenants may be...but until I work it...its guess work at this point in time.

    I know Mia likes to paint a rosy picture but every piece of news and every reading on current business in an aggregate basis is bad and weak.

    I have one business which can expand. The business and the industry in which it is involved is typically countercyclical. We are typically small but have added a part time employee and just didn't make an extremely short term window for an expansion. We will keep looking. Meanwhile having been invested in it thru two weak economic downturns this one is VERY different. We are doing fine....but are working incredibly hard to maintain our status and do better. This downturn is way too severe and has too many unknowns to sit back and relax.
     
    earlpearl, Feb 18, 2009 IP
  12. domainer_10

    domainer_10 Peon

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    #3192
    I don't think anyone was saying this is just a normal recession. I said it would have been a very deep recession but short lived. Because of the government trying to interfere in the market by stimulus plans, bailouts, modifying mortgages, printing money, it's going to turn into a full blown depression I think.
     
    domainer_10, Feb 18, 2009 IP
  13. Divisive Cottonwood

    Divisive Cottonwood Peon

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    #3193
    Somebody sent me a link to the following pic - wow! Total world government spending last year compared to previous government projects added together

    We. Are. In. The. Shit

    [​IMG]
     
    Divisive Cottonwood, Feb 19, 2009 IP
  14. bogart

    bogart Notable Member

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    #3194
    I think that events leading up to the downturn with similiar to what the FED did in 1927. Bernake is an expert on the Great Depression. It also looks like Congress is trying to roll out the new deal.

    But you are right that we don't know what is going to happen. One factor that we need to consider is that the US has had basically 25 years of good economic growth during the last 25 years. There's money out there. A lot more money and wealth than the recessionary periods of 73-75,1980,81-82. It seemed that during that time period the cities were a mess.


    On the retail side, Inflation was so high during the Carter years that people didn't save. They stocked up on things because prices were going up.

    Commerical real estate may become the next crisis. In the area that I was looking at a building, it seems that every block has one vacant commercial space with at least one more for sale or for rent. Some of the rents are 5k per month with some small buildings in the $2 million range.

    The crisis is going to get worse. Some marketslike Florida may be close to bottom but the New York metro has a way to go. The median sales price around here has increased 353% since 2000.

    Median Sales Price

    2000 131k
    2002 200k
    2004 300k
    2006 463k
    2009 252k

    I made an offer of 200k on a building but the deal didn't go through. The last buyer paid 550k in 2005. The real estate office told me that they had an offer of 280k and it was sold. HA HA :D. The building is now back on the market. I'm really having second thoughts about the 200k offer I made. The 1st floor needs a complete gut and the two apartments need major work. In this environment, you need something that you can rent straight up. There's a resturant on the next corner that is for sale for 80k. Their rent is $2950 a month and for all purposes the business is closing. Commerical looks real tough.
     
    bogart, Feb 19, 2009 IP
  15. Boulder

    Boulder Well-Known Member

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    #3195
    The bomb (bubble burst) went off about a year ago.. however the fallout is just now taking affect.

    Cali has no choice now and having to cut government programs on a large scale.

    http://news.yahoo.com/s/ap/20090217/ap_on_bi_ge/california_budget


    I think we may have a ways to go peeps? This thing is just now starting to get interesting... Might not or have ain't seen nothing yet type shit.
     
    Boulder, Feb 19, 2009 IP
  16. earlpearl

    earlpearl Well-Known Member

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    #3196

    Wow, Bogart: That median price increase data is the definition of a bubble. The prices increased 50% every 2 years over the previous period. Nothing increases like that ad infinitum. btw: the bright shiney boys who tout those kinds of prices increases forever are the ones who add fuel to the fire of a bubble economy.

    I believe in real estate. There are a couple of caveats. I've lived for a couple of decades in a great real estate market, the greater Washington DC area. The reason its been great is because the region keeps growing. The population is expanding. (its damn crowded now with miserable traffic).

    If I'd been living in Buffalo, Cleveland or Milwaukee over the past couple of decades I wouldn't have seen the price increases.

    But its all based on demand and supply. If the demand (population increases) continues than prices will go up....especially toward the core of the area. If there aren't population increases....like those stagnating rust belt cities than real estate doesn't appreciate.

    I'm pretty busy (aside from wasting time here) but one of my friends is attending a regional meeting of ICSC (international council of shopping centers). Scrap the talks....the best info there is to find out if any tenants are in the market. Who are they? What types of businesses, etc. I think the tenant expansion market is in the dumpers...but he will fill me in after today.

    I like that region where you are looking. I'd keep bidding low, but I'd try and do the stuff I suggested to you in terms of finding real good deals. You have money. Find the people w/lots of properties to dispose of and start treating them like your best buddy. :rolleyes:

    That is pretty funny how the $280 k deal fell apart. A deal is never done till you cash the check. :D

    As to the graph posted by Divisive. UGH. Damn ugly.

    The only things I'd say to that are the following:

    Since the Bush administration came into office fed government debt increased by something in the range of $4 billion or more. This one year of bailout misery is roughly equivalent to the overspending of the feds above tax income in total value. In other words the govt. has spending future dollars like a banshee for the past 8 years.

    This spending is primarily emergency money. Its not hitting all the right targets. We can see that. Money for bailing out banks has gone to bonuses and buying other banks. It won't all hit the right targets.

    For all those partisans that are screaming about spending....just explain what the heck the prior administration was spending money on (which was occurring) at record breaking spending levels, never before seen in the US.

    I am for keeping working on trying to hit the right targets through targeted spending and bailout type stuff. The goal is to slow down, and stop the downward cycle, slow down the job losses, get some income, money and jobs back in the economy to see if it starts picking up natural momentum.

    The most recent bailout package included about 1/3 tax cuts and 2/3 spending. A lot of the spending is going right into extended unemployment benefits and stuff like food stamps. I think that is right. We will see what happens in the future.
     
    earlpearl, Feb 19, 2009 IP
  17. smatts9

    smatts9 Active Member

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    #3197
    smatts9, Feb 19, 2009 IP
  18. Mia

    Mia R.I.P. STEVE JOBS

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    #3198
    I'm not painting anything. I'm just trying to be realistic. Not everyone is in trouble and the doom and gloom so many moonbats have helped and hoped to usher in exists in the hands of government meddling and nothing else.

    The picture really does become quite rosy when you give tax cuts, and cut spending.

    I can hire two full time college educated well paid employees tomorrow if my taxes were eliminated on my small business. I could hire one more for a total of three if my interest was cut on one my longer term commercial mortgages.

    Those three people would account for three new tax payers, three new consumers and three new producers.

    That would be three less people collecting more in unemployment compensation than the average business pays into the fund, and more than the tax revenues that the average business pays into the federal government combined.

    Eliminate the payroll tax for two years as well. You'll see the majority of the laid off workforce at many businesses hired back almost instantaneously.

    No, no picture painting. Lord knows I did enough of that in college. I'm talking about the real world and how the basic fundamentals of running a business work. You don't make money spending more than you have on things that do not generate more revenue than you are spending.

    Every democrat on the planet is stupid if they believe that.
     
    Mia, Feb 19, 2009 IP
  19. ncz_nate

    ncz_nate Well-Known Member

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    #3199
    ncz_nate, Feb 19, 2009 IP
  20. korr

    korr Peon

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    #3200
    Hey, I like Mark Haines too! Seriously though, Santelli and Haines make it worth watching CNBC until from about 6-11
     
    korr, Feb 20, 2009 IP
    bogart likes this.
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