United States Heading towards a Depression?

LMAO! That's a good one.

 

RealtyTrac has reported US forclosures have surged 55% in July.

More than 77,000 properties were repossessed by lenders nationwide in July.

RealtyTrac noted that it had more than 750,000 foreclosed homes in its database of properties for sale, equal to about 17 percent of the 4.5 million U.S. homes that were up for sale in June.

Even with government help, nearly 2.8 million U.S. households will either face foreclosure, turn over their homes to their lender or sell the properties for less than their mortgage's value by the end of next year, predicts Moody's Economy.com.

http://news.yahoo.com/s/ap/20080814/ap_on_bi_ge/apfn_foreclosure_rates

 

Bogart, what are you supposed to be? Some sort of bad-news live time copy and paste program?

 

No, Bogart is posting the truth. You addressed me earlier in this thread with Ad Hominem insults, instead of debating the truth of the matter. The reality is, the global economy is in an upheaval. There is a global housing and credit crisis. Banks are failing all over the place, and the FED has totally leveraged itself (see the article w/ graph I posted earlier) to the hilt, meaning that there is little room left but to just print more monopoly money and hope people are stupid enough to take it.

I don't really care if you attack me personally.

What I do care about, and what this thread has mostly been about, is the truth. As posted by Bogart, smatts, korr and others. This is what is going on in the world. This is a prelude to what will come next, and those who understand it will survive and maybe thrive. Those who do not will be damaged by it. That's the nature of being an entrepreneur. Seeing opportunities and assessing risk. We're all in the business of living, and thus, all news, good and bad are necessary to evaluate conditions and opportunities to generate the most personal profit and protect our existing wealth, whether that is a surplus of love, sex, money, goods, power, free time, whatever.

So when you attack me, because you don't like the facts (reality) that I or others post, that says more about you, than it does me. It says that you are uncomfortable with information that doesn't reinforce your already adopted positions and stances.

90% of the so-called "bad news" posted here is sourced. It's lame to argue with the messenger, just because one cannot stomach the message.

The news is only bad if you are following the pack, if you have a victim mentality. One man's bad news, is another man's opportunity to profit.

 

Inflation surges by 5.6%
Consumers feel the sting as prices jump again to highest point since 1991 - monthly increase twice what was expected.
http://money.cnn.com/2008/08/14/news/economy/cpi/index.htm



Home prices down 7.6%
Foreclosures drove down prices in the last 12 months, with cities in the Sun Belt leading the decline.
http://money.cnn.com/2008/08/14/real_estate/quarter_three_home_prices/index.htm


Nation's foreclosure plague widens
More tough times in the housing market: 8% monthly jump in foreclosures and 55% year-over-year. 'Bloated inventory' of homes owned by banks, expert says.
http://money.cnn.com/2008/08/14/real_estate/foreclosures_up_in_july/index.htm

 

"It's just a correction"

 

Good idea... Seems you are finally getting the point.

 

One man's bad news is another man's joy.

 

Korr: Interesting graphs. I doubt the US housing market will tank similar to what the graph shows about Japanese housing.

A different analysis with regard to housing and economic demand/supply has to do with population. Japan has had very flat population growth over the last 2 decades. In fact in the last year it suggsted a decrease in population. That makes it similar to nations such as Russia and much of Europe, all facing stagnant, flat or even decreasing populations. Alternatively, population growth in the US is relatively robust. Yesterday projections for growth over the next 30-40 years suggest that the US population will hit over 400 million in the next 30-40 years; about 1/3 growth over current population.

If I was buying for a wealthy family or an investment firm either with a long term outlook of a couple of decades I'd be buying housing based on data of that sort. If I was buying for myself for my own house right now, I'd be torn; when will the market hit bottom. If I was looking at a two or 3 year investment picture I'd be torn; how long will the downturn last.

If I was buying for a long term though, I'd look at a lot of fundamentals of demand and supply, factor in a far larger criteria for unknowns (the longer the time frame-the more unknowns). If I had a lot of information suggesting long term relative robust population growth I'd invest in housing.

 

Hey, all of the people who couldn't afford a house, even though they had good credit, are now able to pick up houses at a discount, because the market was overinflated, and people forgot that what goes up, must come down. A house is a consumer good, not an investment, and certainly not a reverse-mortgage ATM for reckless consumer spending.

One day, hopefully, people will understand that.

Of course, I read all of the time people get mad that other folks wait for sales to buy things at discount. They say these people who are smart shoppers, are destroying the retail sector by not paying full price. Our debt driven society is rotten to the core. It fails traditional conservative values, it even fails classic liberal values.

Buy what you need. Save the rest. It's how this country became so successful.

By accumulating capital through hard work and sacrifice, not by throwing debt money around like drunken sailors.

 

This is a very important, not too long article on the FED.

Please read it, rate and comment. Thanks!

http://forums.digitalpoint.com/showthread.php?t=982719

--

 

Wow, this is a long thread.

First I will start by stating that I am in no way an expert on the economy. But here is my observation.

In 2004, the state of Oregon had the highest unemployment rate, just over 10%, mostly due to Timber, and timber related layoffs.

I am an outdoorsman, and frequent the woods for peace and tranquility. During 2004, I could hardly go anywhere in the woods, because people were living in them. Down every gravel road and every dirt road you ran into a group of people just camping out. You just turn the truck around, so you don't get robbed or shot. Oregon has a lot of woods, so that's saying a lot.

Most native Oregonians blame the economy of California. Just after the San Francisco Quake of 1989, Oregon and Washington became part of a great migration from people from California. When people sold their Cali property, they could afford two properties at Oregon prices. These extra properties that were purchased usually became rentals. Cali rent prices on Oregon Houses.

When I a was 15 I had my own two bedroom apartment (long story) that rented for $225 a month. Ten years later it was going for $750. This was just my example...however rent was climbing 300% in 10 years time, when it should have been only 50%.

I recently purchased my first home for $157,000 (1750 sq ft. 4 bedrooms 2.5 bathrooms on a medium/small lot in town... 7 year old house). I had to leave the lush Willamette Valley that I grew up in, because the same house would cost $275,000. I am now living way out in the desert near a military chemical depot that is suppose to be closing down in 7 years. My hope is that once it does close the value of the house will catch up with everybody else.

In general, I think America's problems can be solved by education. We must make higher education more affordable or even free! I see a lack of educated people in America, and a horde of burger flippers.

The other problem is with the whole "Global Idealism." Outsourcing in America is making a few men rich and leaving a lot of the uneducated, poppers.

Has anybody else noticed that Wal-Mart stuff is getting as bad a K-mart used to be. We used to call K-mart "K-Mart fall apart". I bought several of my kids toys for Christmas from Wal-Mart last year and most of them didn't work or was junk. Yet they have good prices on most things, for us poor people who sacrifice quality just to balance our barely manageable budgets.

I read a older finance book from the 1970's, lol, ...it stated that your mortgage payment,taxes and insurance should not exceed 30% of your total net income.
My house payment is $1260 a month...My net income is $2,500 approx a month. This is 50.40%. So there is a slow trend in how the USA views finance. I have only had my house for one year and thankfully have never been late. But there are two houses just on my street that have been repossessed, with in the last few months.

Over in the valley, where I used to live the situation from what I hear is much worse. People just cannot afford to live in those houses, when the jobs do not pay. I have a college degree, and jobs over $10-$12 were still hard to find. Thankfully I am retired now, on a military pension. I am one of the lucky ones, even though I earned it.

I might be wrong but I predict that Oregon will exceed its unemployment record of 2004 and jump up to 15% maybe 20% based on my current observations. The only way the number will stay down will be because everybody that can no longer afford to live here, will move to some place like Arizona and try to buy desert land off ebay.

I have gone on too long. Just what I think!

 

Doctor Doom

Source: http://www.nytimes.com/2008/08/17/magazine/17pessimist-t.html?ref=business

 

Good. It saves a lot of time. Guerilla, you wouldn't know the truth if it reached up and bit you in your ass.

You have your opinions. You, like all people, step way over the line when you think such opinions are the "one true way" for everyone.

I am privy to the same economic data as you and I totally disagree with your assessment of the situation.

 

I assume Bogart, korr, guru, widomtool, smatts et al all are afflicted with the same weakness?

I'm not the lone voice in the wilderness on this one. I echo the sentiments of some of the world's largest investors as quoted and posted here.

Anti-intellectualism thrives on maintaining contradictory opinions simultaneously. War is peace, liberty is security, truth is opinion. It's all very Orwellian.

Then I am afraid you are not a very good analyst. Inflation is at a 17 year peak, the Dow is down 3,000 points since last year, the NASDAQ is down 50% over the last 8 or so years. The dollar has hit all time lows both in exchange and on the dollar index. The FED has cut rates ridiculously low (well below the market rate of interest) and the government has issued everyone free spending money, yet consumer sales are falling, and unemployment continues to rise.

I'll spare explaining the housing mess to you.

And I think my governmental analysis is pretty good. The head of the Congressional Budget Committee and the former head of the GAO both have the same opinion. In fact, according to a 60 minutes investigation, there is pretty much no one in Washington who doesn't agree with their long term assessment. The country is insolvent.

So instead of trying to stir something up with me, or attack my character, maybe you should invest your energy in helping take responsibility for the mess, and turn around things in this country. Be a leader.

Because at the end of the day, I could disappear from the web forever, and it's not going to change what is really happening in the world. Chasing me off or discrediting me, is completely removed from establishing the truth and doing something useful with it.

Have a nice day.

 

Glenn Beck interview with the Head of Government Accountability Office, Comptroller General Dave Walker. The United States of America is technically bankrupt…

http://www.youtube.com/watch?v=I-16u9x3tfE

 

The downturn also has a cyclical component.

US is not the only economy that has problems.

On the growth front, US is actually fairing better than many other developed economies.

In Q2, the US economy grew by 1.9%.

In the same period Euro-zone economy shrunk by 0.2% and Japanese economy shrunk by 2.4%.

This is the primary reason why US dollar has strengthened against the Euro/Yen.

 

This is a fallacy. GDP is not growth. It's volume. If you spend $150 billion on war, and you borrow the money from China to do it, GDP goes up. You didn't produce more goods or services for the market, you didn't produce anything worthwhile or meaningful, you have not raised the standard of living.

All you have done is borrowed to finance destruction. And GDP, the terribly flawed indicator that it is, says your economy is growing.

Here is another example. If we took say my personal GDP. Let's say I have no job, and no income. I have no expenses. I am conducting zero economic activity, so my personal GDP is ZERO.

Now let's say I get paid to kill someone, borrow some money and use it to buy heroin, and then I burn my house down and claim on the insurance. My personal GDP is going to go up huge.

But have I actually done anything economically that advances my or anyone else's situation?

It's called the Broken Window Fallacy, it was written about by a French classic liberal named Frederic Bastiat. If destruction creates more economic activity (which the idea is that the more economic activity, the better), then shouldn't we destroy everything and start re-building from scratch? Won't that send GDP through the roof?

The American #s are badly misreported. Anyone who is serious about economics should follow John Williams' Shadow Stats website.

 

Check this out...

http://globalpublicmedia.com/ron_cooke_the_perfect_economic_storm

Unemployment: What Is The Real Story? (Ron Cooke, 2008)
CPI: Sophisticated Economic Theory, Terrible Ethics (Ron Cooke, 2008)
American GDP: Can We Trust The BEA Data?(Ron Cooke, 2008)

 

Speak for yourself. Guerilla is one of the most active, honest, level headed and aware member you will ever find here! What you say could not be further from the truth, but hey, you are entitled to your opinion no matter how skewed and untrue.