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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. bogart

    bogart Notable Member

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    #3421
    It's going to get bad before it gets worse. The world is in the first global recession since the 1930s.

    The IMF says that US banks have only stated approx. 25% of their losses and will need up to $3 trillion in additional equity. Housing has not bottomed out and further declines of 20-30% are possible.

    http://finance.yahoo.com/news/Global-recession-worst-since-apf-15004308.html
    SEMrush
    Housing declines of 20-50% through early 2011

    New York
    (New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa. metro area)
    Price correction necessary: 23%
    Projected bottom: December 2010

    Los Angeles
    Los Angeles-Long Beach-Santa Ana metro area)
    Price correction necessary: 29%
    Projected bottom: March 2010

    Miami
    (Miami-Fort Lauderdale-Pompano Beach metro area)
    Price correction necessary: 53%
    Projected bottom: June 2011


    http://www.forbes.com/2009/04/17/ho...tate-home-prices_slide_2.html?thisspeed=25000
     
    bogart, Apr 23, 2009 IP
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    SEMrush
  2. domainer_10

    domainer_10 Peon

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    #3422
    I hate citing the IMF but lets just assume their predictions are right that there is a 2.9 decline in 2009 and zero growth in 2010 for the U.S. Doesn't seem that bad in the grand scheme of historical standards to me. 2 years recessions is by far less than many the U.S has had in the last 300 years.

    The only real concern for me is the future inflation or currency crisis in the U.S. Thats where I think things could get ugly.
     
    domainer_10, Apr 23, 2009 IP
  3. Hon Daddy Dad

    Hon Daddy Dad Peon

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    #3423
    It's a bit of self fulfilling prophesy.
     
    Hon Daddy Dad, Apr 24, 2009 IP
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  4. Mia

    Mia R.I.P. STEVE JOBS

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    #3424
    All the more reason to raise interest rates!
     
    Mia, Apr 24, 2009 IP
  5. earlpearl

    earlpearl Well-Known Member

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    #3425
    If you weighed all the news...bits of good news and reams of bad news the bad news outweighs the good news. For specifics, even as some large financial firms reported profitable 1st Quarter results end of March '09; these same institutions are holding toxic real estate investments. It appears that the values of those mortgages are continuing on a downward cycle. Similarly they are holding other investments....and specifically commercial real estate investments...that will lose value and create more asset losses.

    All that means is that banks will need more capital in the future. Housing prices for the most part continue to trend downward. Unemployment continues to rise...overall purchasing is down. Its a world wide recession on a very serious basis....unlike what has been seen since the great depression.

    Somehow the people who think that future American monetary inflation is the foremost problem are in dreamland. Every month in the US about another 600,000 are losing their jobs. Aggregate purchasing is down. All kinds of indicators are down. Business to business sales are down...as the consumer businesses don't have the money to buy merchandise to the business suppliers.

    If things are bad now....and continuing to trend downward on an aggregate basis....just raise the interest rates now and you'll see so many people out of work...so little money being spent and a US and world economy collapsing so fast it will knock your socks off.

    There is a huge excess of American liquidity. Regardless if the classical approach to tightening that excess was used right now to raise interest rates to high levels....it would absolutely freeze out tons of existing businesses who are currently seeing worse revenues, over supply in inventories, etc.

    You wouldn't see a damn house in America....till the approximate value of a $500,000 house would fall to $100,000. Oooooh.....and if you think the drag on banks assets caused by their holdings of cr@ppy @ss securitized mortgages is bad now.....watch the banking industry collapse with that action.

    I'd suggest try to spur elements of the economy now....and keep waiting till it gets some natural momentum.

    Of note. I lived first hand through the financial crisis US recession of the late 1980's/early 1990's. All of those who read history and make comparisons about it and other previous recessions...tie a tight time frame to it...with their readings.

    Don't believe that. Like other recessions it doesn't just occur out of the blue. Slowdowns occur before the "official" accounting of the recession period...and then recovery is similarly slow for a period. It takes time for things to settle.

    We have a rocky road in front of us for a while.
     
    earlpearl, Apr 24, 2009 IP
  6. nancy_18am

    nancy_18am Peon

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    #3426
    i think there are alot of factors cuase this one of them our bank system and bush economical politics
     
    nancy_18am, Apr 24, 2009 IP
  7. Bernard

    Bernard Well-Known Member

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    #3427
    I'm only posting a short snippet. The full article is worth reading:

    http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_reilly&sid=aColIYAe.RaU
     
    Bernard, Apr 25, 2009 IP
  8. gocali2009

    gocali2009 Active Member

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    #3428
    Its going to get much worse than this..

    When the market begins to feel the inflation from all the BILLIONS of dollars that have been pumped out into the american economy, the US dollar will become under tremendeous pressure, maybe leading to introduction of a new american currency.

    For the next 2 years there are many currencies which can be expected to rise against the dollar. Nice opportuniy for profit if you know what to do.
     
    gocali2009, Apr 25, 2009 IP
  9. Mia

    Mia R.I.P. STEVE JOBS

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    #3429

    Yeah, and monkeys might fly out of my butt....

    Sheesh..
     
    Mia, Apr 27, 2009 IP
  10. guru-seo

    guru-seo Peon

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    #3430
    That sounds more probable than interest rates going up any time soon.
     
    guru-seo, Apr 28, 2009 IP
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  11. PioneerGold

    PioneerGold Well-Known Member

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    #3431
    Yay! All this doom and gloom talk is unnecessary.

    Ignore the Chrysler bankruptcy.
    Ignore the impending GM takeover by the Treasury.
    Ignore all the bailouts and ballooning Fed balance sheet.

    This is all part of the business cycle. Everything is normal.

    Nothing to see here. Move along.
     
    PioneerGold, Apr 30, 2009 IP
  12. domainer_10

    domainer_10 Peon

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    #3432
    domainer_10, Apr 30, 2009 IP
  13. gauharjk

    gauharjk Well-Known Member

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    #3433
    NUMBER OF UNEMPLOYED GETTING BENEFITS CLIMBS TO RECORD

     
    gauharjk, May 7, 2009 IP
  14. Mia

    Mia R.I.P. STEVE JOBS

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    #3434
    Mia, May 7, 2009 IP
  15. debunked

    debunked Prominent Member

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    #3435
    Strange how the last month you would have thought it was November around here. The mall parking lot almost full all of the time and other stores as well. My wife would keep commenting how it looked like Christmas around the mall. Usually the mall parking lot has lots of empty spots.

    We have noticed increases in sales as well and people are getting out and about for spring activities. Consumer confidence can make a huge change in the economy.
     
    debunked, May 7, 2009 IP
  16. Mia

    Mia R.I.P. STEVE JOBS

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    #3436
    I've noticed the same thing. My wife says its just "SPRING"... Long lines at the checkouts at every dept store lately. And not just on the weekend!

    What I really want to know is why with a "housing crisis" the cost of these kiddie forts are so out of control? I've gotta go pick one up for my son's b-day today and its like $600 just for the fort, then another $200 for slide, and on up for other accessories..

    Meanwhile demand is down for shingles, but the price is up? Goes counter to econ101. Law of Supply and Demand is not working in that industry. Seems the two major shingle companies merged and are now controlling prices. Shingles are up 70% while oil is down 60%. Go figure...

    BASTARDS!!!! Good thing I bought the roof for the house last year. But I need one for my offices, and it would appear its going to be 70% more now. Insane. Meanwhile NO ONE IS BUILDING NEW HOUSES AND NO ONE IS BUYING SHINGLES. The price should have gone DOWN 70%.

    Weird.
     
    Mia, May 7, 2009 IP
  17. bogart

    bogart Notable Member

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    #3437
    People feel good right now. The Dow is up and many people are receiving their tax returns.

    However, the crisis is far from over. It's estimated that Banks will suffer as much as $3 trillion in loses.

    I'm seeing commercial space empty all over the place and commercial building for sale.

    People are getting the stimilus money as well as their tax returns. People are going to spend even if they don't have jobs. 6.35 million people are collecting unemployment and the unemployment rate is at 8.9%

    Consumer spending was up 2.2% in March and business spending was down 6.3%
     
    bogart, May 7, 2009 IP
  18. Mia

    Mia R.I.P. STEVE JOBS

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    #3438
    Is this a nationally conducted study? Different geographic regions are seeing different things... We are still building crap around here. Spending seems to be up all the way around, that and sales are still up 30% this last quarter over last year, and last year was up 30% over the previous year so its not like we are seeing a net negative increase in sales do to previous downturn.

    On the stimulus front, what would that be? Those $200 checks for seniors? I got my return before the filing deadline and put it in the bank. I of course paid that dirty cock sucker doyle out of pocket again. What a shithead!
     
    Mia, May 7, 2009 IP
  19. leandar

    leandar Well-Known Member

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    #3439
    still this Depression is going on? whats new graph
     
    leandar, May 7, 2009 IP
  20. earlpearl

    earlpearl Well-Known Member

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    #3440
    Nice sign that consumer spending is up. Hope it continues and leads to hiring. The US needs to redevelop some competitive areas of production/manufacturing/services that we can sell overseas. This recession is in part a big picture at the overwhelming nature of the consumption side of the US economy.

    Bogart: what region or sub region do you look at w/ regard to commercial vacancy/commercial sales?

    One thing about commercial space, its mostly reflected in office space...is the sublet market, sometimes called the shadow market for space. If a big company has 80,000 feet of office space in a market but fires a lot of people, still has time on its lease....it puts out the sublease space. When that gets flooded in a market it absolutely knocks the stuffing out of prime lease rental rates.

    In the DC region overall vacancy rates are inching up. Available sublease space is increasing faster than prime space. This market will take hits on rental rates sooner or later, which is good for tenants but bad for landlords and lenders. (winners and losers--its not all bad).

    One thing that is happening here and probably elsewhere is that tenants aren't moving. They are staying in their buildings and either keeping space or renewing w/ less space. That is happening at a really high level.

    Even if they keep the same space...not moving hurts parts of the economy. No movers, no architecture work for new designs, no permits, no construction, no buying of construction materials, etc.

    In 2008 one of the larger new lease transactions in DC involved a major law firm. They took a lot of expansion space but took it in a new building next door to their existing building. That became the largest lease in the city (maybe ever) that didn't involve moving trucks. LOL.

    That makes the move a little less expensive.

    One other thing about vacancies and commercial space. The lenders have to be cutting back money available to vacant buildings with regard to enticing tenants. Lots of major and minor commercial real estate across the nation either has or will have problems with lenders over the next couple of years.

    I gotta think commercial space will take plenty of hits into the future.
     
    earlpearl, May 7, 2009 IP
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