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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. smatts9

    smatts9 Active Member

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    #3061
    Sure OPEC may seem like a cartel but they fall short of your definition. Oh, and thanks for the definition I needed a little patronizing.
    SEMrush
    They have been quite ineffective when it comes to controlling the price.

    You are crazy if you think this is just some "energy crisis"... Higher oil prices has the uncanny ability to freeze over the credit markets and grind lending to a halt.
     
    smatts9, Dec 4, 2008 IP
    SEMrush
  2. PioneerGold

    PioneerGold Well-Known Member

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    #3062
    The way I see it, the U. S. economy is trapped in a range for the forseeable future ~5 years.

    The irresponsible banking cartel in the United States created a huge speculative bubble over the past 10 years, leading to massive waste in energy, resources, and manpower.

    This occurred in

    real estate (mcmansions/condos/planned communities),
    retail (strip malls and big box retailers),
    entertainment (stadiums/arenas/convention centers), and
    consumption (consumer electronics, kitchen upgrades, overseas vacations, SUVs/trucks/Hummers, private jets)

    This caused oil prices to skyrocket because energy use was increasing but production was not!

    The banking cartel facilitated this waste which led to massive inflation in oil prices.

    As the banking cartel started to restrict credit (around September), oil prices began to fall.

    So, now the country is screwed.

    The second easy credit returns, oil prices are going to go through the roof again.

    Obama and the other politicians (paid corporate spokesmen) want the banks to lend again ASAP.

    All that is going to do is cause oil consumption to increase again and oil prices to start skyrocketing like this past summer.

    The United States needs a drastic reallocation of resources to more productive and efficient activities. Otherwise, we're just going to see Summer of 2008 all over again.
     
    PioneerGold, Dec 4, 2008 IP
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  3. rochow

    rochow Well-Known Member

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    #3063
    The amount of lending has given the US the ability to buy far more, yet still produce the same amount.

    Simplifying the hell out of it with a bit of economics 101:
    - Demand has gone up, yet supply has stayed the same
    - Therefore, prices go up
    - Eventually, too many people can't afford to buy. Still, they've committed to their loans - too bad so sad. If they can't pay, they're tossed onto the street. If they can't get a place near their work (the more people needing the rent, the less availability + the more prices will go up, making it even less affordable), then there goes to job too. With no house and no job, they'll have to move back home or find a cozy cardboard box.
    - Less people buy as they're struggling to pay loans, so businesses have to fire staff. Those staff have loans too pay, so they join the out of work & house crew.
    - The more people that don't buy, the even worse it gets, and the even more people that lose jobs. It's a downward cycle.
    - Eventually, prices come down so much that enough people start buying again. More people get jobs, which means even more money spent. And up and up it goes (to come down+down later, like it is now)

    Got a bit rambly towards the end :p, however the moral is simple - try and mess with supply and demand, and it'll kick you in the ass.

    Bottom line is by being too greedy and purchasing beyond their means, they've dug themselves a grave and now it's all doom and gloom. Seriously, were they expecting a fairytale ending?
     
    rochow, Dec 4, 2008 IP
  4. Mia

    Mia R.I.P. STEVE JOBS

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    #3064
    Actually production was increasing.

    No, they do not "seem" to be. They are. That is what they are called. That is what they are. Its a fact, not a sarcastic depiction.

    Really? Again, I guess you have to have lived a bit longer to see what I am talking about.

    It is an Energy Crisis, or has been for some time.

    And yes, it is at the forefront of the entire economic meltdown.

    Watch for gas under a buck. Its coming. If we play our cards right, it can stay there.
     
    Mia, Dec 5, 2008 IP
  5. smatts9

    smatts9 Active Member

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    #3065
    The OPEC nations have been calling for oil to be around $80 / barrel and saying they are cutting production. What is oil doing? Dropping. Looks like they are doing a great job. You also think oil will continue to drop, as do I, but why? Obviously OPEC doesn't want it this low so surely they will manipulate it, no?

    You predict low ass oil prices but also seem to think OPEC has control over it. You are crazy and make no sense.

    And why do you think oil will be headed lower?
     
    smatts9, Dec 5, 2008 IP
  6. Mia

    Mia R.I.P. STEVE JOBS

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    #3066
    They reacted too late. Now the wheels of supply/demand are in full action.

    They cannot lower production fast enough. There's now a surplus. Short of demand doubling in the next 6 months, I don't see any end to the fall. I see 80cents/gallon as the bottom. We'll be well around 25-28/barrel soon.

    Assume we continue to curb demand and start drilling for more of our own.

    Two personal attacks in row. Thats an all time high for you.
    Lowered Demand, increased production. Econ 101 man.
     
    Mia, Dec 5, 2008 IP
  7. domainer_10

    domainer_10 Peon

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    #3067
    Well job losses are 533,000 for november. They also revised the previous months much lower. So with the new revisions my prediction now is I think losses will be about a million in either the month of January or February.
     
    domainer_10, Dec 5, 2008 IP
  8. Mia

    Mia R.I.P. STEVE JOBS

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    #3068
    Do the job numbers include the large number of cyclical seasonal layoffs that occur this time each year? Are we basing these numbers on actual job losses, or "unemployment claims"?
     
    Mia, Dec 5, 2008 IP
  9. smatts9

    smatts9 Active Member

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    #3069
    They will sell all they can regardless of quotas they make with other OPEC nations. If they don't they have countries like Russia soaking up demand. Countries will pump to bring in revenues despite oil prices. Just think about game theory.

    I am shocked at your disregard for this monstrous universal debt bubble. And thinking this is just based upon energy. The more money that was lent to more dollars the oil nations charged for oil. Simple econ 101 man.

    And I said OPEC was constrained to their supply/demand limits earlier. They have very little powers to control prices because of game theory.
     
    smatts9, Dec 5, 2008 IP
  10. bogart

    bogart Notable Member

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    #3070
    Dick Morris, adviser to the Bill Clinton administration, is saying that the US is headed into a DEPRESSION -- but not a Great Depression.

    The bailouts will not stop the coming depression but will help eaise the pain, according to Dick Morris.

    533,000 jobs were lost in November -- the most in 34 years -- and 422,000 people have left the work force.

    Employers cut 533K jobs in Nov., most in 34 years

    http://news.yahoo.com/s/ap/20081205/ap_on_bi_ge/financial_meltdown

    According to the bureau's website, "The NBER does not separately identify depressions. The NBER business cycle chronology identifies the dates of peaks and troughs in economic activity. We refer to the period between a peak and a trough as a contraction or a recession, and the period between the trough and the peak as an expansion."

    http://www.latimes.com/business/la-fi-depression5-2008dec05,0,4467985.story

    http://en.wikipedia.org/wiki/Depression_(economic)

    People are living beyond their means.

    In 1995 World GDP and World Debt were roughly equal at $35 trillion dollars.

    World GDP has grown to $50 trillion but World Debt is now $187 trillion. :eek:
     
    bogart, Dec 5, 2008 IP
  11. Mia

    Mia R.I.P. STEVE JOBS

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    #3071

    Assets need equal liabilities.

    At the heart of the problem? ENERGY. I'm looking forward to that dollar a gallon gas myself.
     
    Mia, Dec 5, 2008 IP
  12. domainer_10

    domainer_10 Peon

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    #3072
    One thing to note, that are population is 40% higher than it was in the 1970's. So even if the numbers for this month are revised to 700,000 or so (they usually are revised for the next couple months afterwards) it would still be on par with 1970's level layoffs. Because 450,000 times 1.4 = around 700,000 Then of course their is the whole thing about people who are underemployed and have been looking for job for more than a year who aren't counted. But for the sake of simplicity lets just pretend they are using the same numbers.

    HOWEVER I think the really big layoffs are coming january and febuary which is why i say about a million or much higher layoffs per month then. A lot of employers are holding out till after the holidays, mainly because 70% of our economy is retail driven, therefore obviously its not gonna get real big until christmas is over with.

    With that said we are in IN A DEPRESSION. There is no "technical" definition of a depression. However, many economist say a depression is when the government takes extradorniary action to try to preserve or keep alive the economy. That is exactly what the government is doing right now. So just by their actions alone and the continuing climb in debt, foreclosures, asset losses, and unemployment we are seeing I believe we are already in a depression. By the time most people realize we are in one, we'll be in it full steam. The stock market is a sham by the way, they rallied on a day like this? WTF. They are way overinflated and delusional just like everyone else who doesn't believe were in a depression.
     
    domainer_10, Dec 5, 2008 IP
  13. bogart

    bogart Notable Member

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    #3073
    The financial crisis is the driving force. 1 in 10 homeowners are in mortgage trouble. People have been using their homes as a credit card the last 10 years and payback times has arrived. The crisis has also been made worse due to the liberal democrats using mortgage lending to promote a social agenda.

    People are going to have to start working. 1 in 10 Americans are receiving foodstamps yet there are 12 million illegal aliens in the US. So, it's hard to say that there are no jobs.

    The lower price of oil will help to eaise the pain, but it's not going to solve the financial problem. In any case, the lower price of oil can buy us some time to delevop alternative enegry. But Americans are already going back to their old ways and gas consumption is increasing.
     
    bogart, Dec 5, 2008 IP
  14. PioneerGold

    PioneerGold Well-Known Member

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    #3074
    Generally, we agree on the cause.

    Too much debt, led to too much consumption, led to too much demand on oil, which led to SKY-HIGH energy prices.

    The country was borrowing (from China, India, Russia, Mid-East, etc.) and waging wars to maintain its lifestyle and not producing goods/services anyone would want outside the United States.

    Basically the US was consuming the world's resources and not producing anything the world would want. Hence, the country was actually getting poorer through Bush's term but no one cared because they could always borrow to make up the shortfall.

    However, I have a problem when people try to place blame on Democrats or Republicans individually. They are both the problem and both share the blame. The national corporation (federal government) has been insolvent for decades, and people still seem unwilling to acknowledge this so proper changes can be made.

    The national corporation (federal government) is like GM.

    It has been in trouble since the 1970s. Unlike GM, the national corporation has been insolvent the whole time, but has been giving itself bailouts to avoid bankruptcy. It has robbed social security. It has increased the tax burden. It has deferred its obligations.

    But default is looming and this financial crisis has shown that.
     
    PioneerGold, Dec 5, 2008 IP
  15. bogart

    bogart Notable Member

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    #3075
    The Community Reinvestment Act is a main cause of the mortgage crisis. The Community Reinvestment Act (CRA), enacted by Democratic controlled Congress in 1977 under President Carter (D).

    The Clinton administration turned the Community Reinvestment Act, a once-obscure and lightly enforced banking regulation law, into one of the most powerful mandates shaping American cities—and, as Senate Banking Committee chairman Phil Gramm memorably put it, a vast extortion scheme against the nation's banks. Under its provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left-wing community groups, intent, in some cases, on teaching their low-income clients that the financial system is their enemy and, implicitly, that government, rather than their own striving, is the key to their well-being.


    http://www.city-journal.org/html/10_1_the_trillion_dollar.html

    Barry Obama was a communuty organizer that worked for ACRON to sue banks for CRA compliance.

    Obama Sued Citibank Under CRA to Force it to Make Bad Loans

    Case Name
    Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/Insurance
    Docket / Court 94 C 4094 ( N.D. Ill. ) FH-IL-0011
    State/Territory Illinois
    Case Summary
    Plaintiffs filed their class action lawsuit on July 6, 1994, alleging that Citibank had engaged in redlining practices in the Chicago metropolitan area in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691; the Fair Housing Act, 42 U.S.C. 3601-3619; the Thirteenth Amendment to the U.S. Constitution; and 42 U.S.C. 1981, 1982. Plaintiffs alleged that the Defendant-bank rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories. Plaintiffs sought injunctive relief, actual damages, and punitive damages.

    U.S. District Court Judge Ruben Castillo certified the Plaintiffs suit as a class action on June 30, 1995. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 322 (N.D. Ill. 1995). Also on June 30, Judge Castillo granted Plaintiffs motion to compel discovery of a sample of Defendant-banks loan application files. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 338 (N.D. Ill. 1995).

    The parties voluntarily dismissed the case on May 12, 1998, pursuant to a settlement agreement.
    Plaintiffs Lawyers Alexis, Hilary I. (Illinois)
    FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
    Childers, Michael Allen (Illinois)
    FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
    Clayton, Fay (Illinois)
    FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
    Cummings, Jeffrey Irvine (Illinois)
    FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
    Love, Sara Norris (Virginia)
    FH-IL-0011-9000
    Miner, Judson Hirsch (Illinois)
    FH-IL-0011-7500 | FH-IL-0011-9000
    Obama, Barack H. (Illinois)
    FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
    Wickert, John Henry (Illinois)
    FH-IL-0011-9000

    http://www.mediacircus.com/2008/10/obama-sued-citibank-under-cra-to-force-it-to-make-bad-loans/
     
    bogart, Dec 5, 2008 IP
  16. PioneerGold

    PioneerGold Well-Known Member

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    #3076
    If you are saying this one act led to the massive debt crisis the US is experiencing, you are grossly oversimplifying how deep a hole this country faces.

    It sounds like you are trying to blame poor people who only want to own their home for this mess and trying to give sympathy to greedy bankers.

    Wow!

    Take a look at

    Commodity Futures Modernization Act of 2000
    Gramm-Leach-Bliley Act

    Then consider the impact of credit default swaps, outrageous credit card interest rates, and the consolidation of banking and insurance resulting in reduced competition and centralized loan decisions rather than local banks with a vested interest in making sound loans.

    There are so many laws the national corporation (federal government) has passed to ease regulation, reduce competition, and subsidize banking interests, it's no wonder this country is swimming in debt.

    Instead of investing in the country's manufacturing and production facilities, the resources have gone toward leisure, luxury, and war.

    It is no recipe for a sound economy and people seem unwilling to hold the national corporation responsible for its actions (whether past or present).
     
    PioneerGold, Dec 5, 2008 IP
  17. bogart

    bogart Notable Member

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    #3077
    Subprime was the straw that broke the camel's back.

    20% of subprime loans are now delinquent ...

    http://money.cnn.com/2008/12/05/news/economy/mortgage_delinquencies/index.htm

    The 62 trillion dollars of credit default swaps are a time bomb.

    The U.S. savings rate is zero. Americans need to save money. People are relying on asset appreciation of stock and houses to fund their lifestyle and retirements.
     
    bogart, Dec 5, 2008 IP
  18. PioneerGold

    PioneerGold Well-Known Member

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    #3078
    It wasn't simply subprime. There aren't enough houses to cause this much havoc. It was the derivatives created on top of the subprime mortgages... the collateralized debt obligations (CDO) and credit default swaps (CDS) which finally collapsed the bubble. I won't include the ratings agencies in this fiasco.

    The useless bankers exploited everyone they could in the economy (credit cards, debit cards, 0% financing, low down payments, etc.) and all that was left to keep things going were the poor and the desperate.

    Hence, you saw the explosion of cash advance, payday loans, check cashing, etc. Would it surprise you to know the banks were bankrolling these companies?

    In fact, the banks were so desperate for new sources of lenders, they started creating debt from people who bet against subprime (i.e. the credit default swap).

    The problem is the only thing this country produces, that the world wants, is dollars (paper dollars are not really money, more like a promise to repay). The problem is that it is not wealth.

    The bankers love this because they can sell these dollars all around the world. Unfortunately, they pushed so many dollars into the world, that repayment, was impossible. Demand for the dollar drops and oil prices hit all-time highs.

    This leads to a massive credit collapse, unemployment, and higher prices. Until it is removed, this economy will continue to suffer, all at the hands of the banks and the national corporation (federal government).

    Yet, knowing this, the politicians still want to pump more dollars into the world by urging from the banks.

    Sure, that will work.

    Washington and Wall Street are killing this country.
     
    PioneerGold, Dec 6, 2008 IP
  19. earlpearl

    earlpearl Well-Known Member

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    #3079
    Despite the politically inspired comments from folks such as Bogart, as referenced above, and Mia, on an ongoing basis, there is no evidence that CRA had anything to do with the explosive bad mortgage debt crisis that has crippled the economy.

    In fact in the midst of an explosive mortgage boom that featured subprime loans, loans for 100% and in excess of 100% of the value of a home that started in the 1990's, then exploded in this decade.....the real cause of the financial explosion...we see the following information...

    further research found....


    The CRA criticisms are simply politically motivated with absolutely no basis in reality.

    Of interest, and related to this discussion, Chevy Chase Bank, a Washington DC region bank recently sold. The sale is a discussion for another thread, pointing out how bank money is being used for purchases and mergers rather than lending.

    In any case this article on Chevy Chase points out that it carries about $4 billion in adjustable rate home loans, chiefly made in California. Those problem loans are the reason for the sale.

    When a DC/Virginia/Maryland based bank makes $4 billion in mortgage loans in California....that is the complete opposite of CRA regulations, which looks for loans made in your community and your neck of the woods. Chevy Chase became aggressive in California and other parts of the nation because there was tremendous fee money to be made in making loans, its that simple.
     
    earlpearl, Dec 6, 2008 IP
  20. domainer_10

    domainer_10 Peon

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    #3080



    Yeah, if it was simply just bad subprime mortgages the government could have just bought them all out for a few hundred billion. Unfortunately because of these shady bets its a much larger bubble and spread around the world. That is why paulson ditched the whole buying up toxic assets with the 700 billion, I read because it would have been a drop in the bucket to what they really needed and the banks would have had to declare their real value on the books. In other words the major banks like Citigroup, bank of america, etc would have to declare themselves insolvent.
     
    domainer_10, Dec 6, 2008 IP
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