United States Heading towards a Depression?

All of this is based on your assumption that house prices continually go up which is false.

Also, debt consolidation on the surface sounds like a good idea but people are slaves to their habits. Most people eventually give in to their normal debt accumulation habits and use their credit cards again.

 

Home equity loan defaults are soaring and home equity loan amounts are dropping below home loan amounts.

http://money.cnn.com/2008/02/01/new...ty.fortune/index.htm?section=money_topstories

Some of the more recent bad news: Last quarter of 2007 the CPI surged by 5.6%; increased deterioration in loan quality in 2008 and payrolls decline 17,000 in January

 

there should be a plus side to this, prices on stuff should drop because so many buyers will be removed from the market

if you have self control and can save money, you should be able to buy more with it, even with inflation

 

I don't know but, who is going to buy all those suvs, boats, real estate, and flat screen tvs once peoples credit is taken away?

They still need to sell the stuff, Americans can't save money for shit, they will have to put that stuff on sale

Prices on a lot of stuff is going drop, just like real estate is dropping. Food and fuel might go up, but big luxury items I bet start falling big time.

During the depression prices on stuff drop dramatically, There are killer deals on Big used boats and trucks in Florida right now, all the red necks got to sell off their stuff.

 

soaring food and energy prices continues to threaten spiralling inflation......credit card defaults add more woes to already ailing financial institution from subprime writeoffs...........fiscal stimulas along with aggressive rate cuts minus huge war related expenses won't this whole fiscal mess........stock market mahem adds woes to already nervous investors/traders....

 

http://www.nytimes.com/reuters/business/business-usa-economy-services.html?_r=1&oref=slogin
Services Index Plunges, Pointing to Recession

 

There's not too many fire sales at the moment. At best house prices are going to 2006 levels.

However some fire sales are coming in 12-18 months.

The ISM's new composite index measuring the health of the service sector was 44.6 in January 2008

In March 2001, the beginning of the last recession, the index had a break-even reading of 50. And during that recession, the index hung around 48 or 49 -- several points higher than January's reading.

The economy lost 17,000 jobs in January. Factories eliminated 28,000 jobs in January and have cut 269,000 jobs over the past 12 months.

http://biz.yahoo.com/ap/080205/economy.html

 

This is a good thing.. It is not a loss, but a correction.. I wish people would stop creating a correction as a recession.

Odd, this seems to contradict that statement:

http://blogs.wsj.com/economics/2008/01/30/adp-report-shows-big-rebound-in-job-market/

Unless you would have added this to the 17,000 number "which was the first nationwide loss of jobs since August 2003." FIVE STRAIGHT YEARS OF JOB GROWTH... You get to a point where the economy cannot create any more jobs to offset those lost in sectors that typically decline during the beginning of a new year. Why are we treating FIVE YEARS OF JOB GROWTH as if it was FIVE YEARS OF JOB LOSS?

http://www.bls.gov/news.release/empsit.nr0.htm

Doom and gloom continues..

 

Last time ISM report was this bad we had a recession last for like 15 months.

 

Good article: "The Fed isn't fooling anyone"
'The central bank's interest-rate cuts may be a quick fix for 2008, but they'll create a massive inflationary push in 2009, leading us right back into another boom-bust cycle. '

http://articles.moneycentral.msn.co.../TheFedIsntFoolingAnyone.aspx?ref=patrick.net

 

Depends on what you consider a fire sale, in bubbly places there are deals 20-30% of the peak

 

Current home prices are too high at 25x rent to price. 10-14x is the historic norm.

Here's a Forbes Five-year projection of home prices.

http://money.cnn.com/magazines/fortune/price_rent_ratios/

 

All the more reason to welcome this correction....

 

Deflating the housing bubble is a good thing. The issue is the FEd/Govermment trying to support the bubble with inflation and deficit spending.

Former Fed Chairman Paul Volcker said he doesn't see how the U.S. can keep borrowing and consuming while letting foreign countries do all the producing and a U.S. Economic crisis is imminent.

The 150 billion stimilus package has now ballooned into a $205 billion Senate stimulus bill. The 58-41 vote fell just short of the 60 required to break a GOP filibuster and bring the Senate version of the stimulus bill closer to a final vote.

Republican leaders objected to add-ons such as a $14.5 billion unemployment extension for those whose benefits have run out, $1 billion in heating aid for the poor and rebate checks to people collecting Social Security and don't pay taxes.

Republican also want to amend the meaure making clear that illegal immigrants can't get rebate checks.

http://news.yahoo.com/s/ap/20080206/ap_on_re_us/economy_stimulus

 

I think it is wrong to lower interest rates at this point.. If anything, they should be going way the hell up. Tax cuts, or keeping the tax cuts in place is all that is needed to spur the economy. Lower interest rates at this point are not going to do anything to encourage people to save their money, which is what they should be doing at this point IMO.

 

Halleljuah! My brother has seen the light, and it is righteous and true!

 

If clinton is president I will agree with this thread in every aspect!