United States Heading towards a Depression?

Hey even beaten down Michigan is turning the corner out of tough times. Another area is losing it's dependence on a single industry much like southern California weened itself of the defense industry in the early 90s.

 

50/50 chance of recession
10% chance of severe recession (10%+ unemployment similiar to 1980-1981 recession)

A depression is a world event and the economies if Asia and the Eurozone are doing pretty good.

 

A severe recession (10%+ unemployment similiar to 1980-1981 recession) will seem like a depression to most people.

 

Holy crap, only 3 posts to get RP mentioned in a thread that has nothing to do with RP... This is getting a bit old.

On topic...

The US is not even in a recession, therefore, it is impossible to conclude we are headed for a depression. All of the economic indicators right now show we are in what is called a correction.

With little to no inflation, little to now unemployment, and interest rates lower than they have ever been, it is unlikely that a recession or depression is even remotely on its way.

Do keep in mind that today, there are stops in place on the market to avoid a crash, unlike in the past. Also, the US economy is much stronger than it was back then. The recovery after 9/11 is a good example of just how strong and robust the American economy is when handled properly.

At the moment, we are in a correction.

 

Check traditional CPI. It's higher than interest rates, which means that people's savings and "adjusted for core inflation" entitlements are buying less food and energy than they were before.

Which is a fancy way of saying recession.

 

Our economy typically works in 7 year cycles, boom and bust.

The first industries to feel the pain are new homes and auto, which both have been in record lows since the late 90's.

2008 - this my friend is called a recession.

Giuliani - what does this have to do with the price of tea in china???

 

No, sorry you are wrong.

Recession:

"In macroeconomics, a recession is a decline in any country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year. "

Source Wikipedia

There have not been two or more successive quarters with a decline in GDP and or negative economic growth. Things are slowing in some areas, but have not come to a halt, nor have they declined.

Why must you continue to deny reality?

New homes and cars have been at their highest levels... Where did you get the idea it was the other way around?

Here is the definition of a recession:

I"n macroeconomics, a recession is a decline in any country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year. "

The housing market is not a good indicator of anything other than the fact that people have been buying more house than they can afford and banks have been lending money they knew people could not pay back. To have a true recession the first economic indicator would likely be deflation or inflation, neither of which is present.

Typically high oil prices and war will cause a recession, and we have had both for some time, yet no recession...

I agree though, these things do go in cycles. However, the current cycle has been economic growth. Unemployment is at its lowest levels, interest rates are at their lowest levels, inflation is at its lowest level, more people are working than ever before, more people own homes, should I go on? How on earth anyone could possibly describe the period of economic growth we are in as a recession is simply wishful thinking on a course for spreading doom and gloom..

Absolutely everything.. It is a prime example of just how strong our economy is. The stock market crashed and lost more in one day than it ever did when it crashed prior to the great depression, and still not only recovered, but has rebounded to unheard of levels... Our economy has mirrored this trend ever since.

Ultimately those that believe we are in a recession are letting their emotional driven dislike of President Bush dictate their own reality in an effort to further their own agenda...

 

Slowdown in US will impact GDP of emerging economies like Hongkong, Taiwan, Singapore,Brazil,Phillipines.....
However oil exporting nations are raking in $$$$$$ due to record high energy prices......they will try to keep the boat sailing high

 

Really?

http://www.wdef.com/news/car_sales_slow_going_into_2008/12/2007

http://www.baltimoresun.com/business/bal-bz.newhomes29dec29,0,493329.story

 

The housing sector is a less valuable indicator as it tends to rachet prices up quickly when times are good but that racheting eventually hits a wall. All housing prices move up too much until the first person on the buying chain, the starter home buyer, can't buy. So the person wanting to sell the starter home to buy a nice big new home can't sell and buy the new home. At this point the housing market reports sales are no longer red hot but only 90% of red hot and the papers run and you believe the worst.

BTW, we have unemployement down around 4 or 5% even with 30 million illegal aliens flooding our job market and suppressing everyone's wages.

 

lol, yeah right "90% of red hot"

http://www.theaustralian.news.com.au/story/0,25197,22987929-36375,00.html

I know there is a whole lot of real estate and mortgage "professionals" looking for new jobs, I know construction workers who are essentially homeless because there is no jobs anymore.

I don't really think its the end of the world or anything, but I think there will be a lot of people experiencing some financial hardship for the next 3-4 years.

I find usually when a person is talking about how the housing market is still good , or is about to turn around they tend to be real estate agents and are more just wishing for those old commissions coming back, then anything


http://www.msnbc.msn.com/id/22418842/

lol, 90% of red hot

 

ferret,
You missed the point. The point was they are comparing a bubble market buoyed by loose sub prime money to present conditions. The market was very hot in good areas for the last ten years, and now sub prime and flipping is gone, sales churn should be off from the highs.

Hey, I just checked, my area is at 65% of the red hot market of bubbly top.
You can say Orange County housing price off by 9%! Or I can say Orange County average price now over $580,000, up from $175,000 ten years ago. The real estate here can support up to 5 times household income so it was about time for the market to cool a bit to let incomes catch up so ten years from now nice starte homes can fetch $1.5 million.

P.S. Be careful using the term professional when referring to occupations that don't require a degree or certification that can't be had in a few days.

 

Nope. CNN. Auto industry having record lows since 1998. New home sales are at a 12 year low..

We had our boom now it's time for our recession - this is how our economy works, without fail.

 

2001 wasn't really a recession when you compare it to 1991 and 1981. In fact the 1991 recession was only a moderate recession.

The economy is slow right now. It's predicted that GDP growth will be 1.5% for the 4th quarter so we aren't in a recession and not even close to a depression.

The housing is another story. Housing is way over valued in the Northeast and California. We will have to see how it plays out over the next year. A real crash will be a 30-50% drop in prices.

 

We are in a financial crisis, period. Everything is fueled by debt, that will either collapse the system, or totally remove entitlements for future generations as they become tax slaves to finance our obligations to service the deficit.

http://www.youtube.com/watch?v=zXIufIXPsYs
(ignore the title)



.

 

Correct.. In order to have a recession you need two consecutive quarters with negative GDP.. That is not the case currently.

Real estate never really crashes. Homes are still worth more now than they were when they were purchased... Seeing less than the over valued amount, but still more than the value of the homes original purchase price is hardly an indicator of recession.

 

Owners that purchased homes prior to 2001 are o.k. but people that bought in California, Florida and the Northeast will be in for a world of hurt. The neighborhoods having a high percentage of subprime buyers will see the biggest drops.