United States Heading towards a Depression?

What light... I have always been for higher interest rates at this juncture. Nothing like watching my money market go from 5.64% to 3.99% overnight! I had really thought that at this point interest rates would have gone through the roof enabling me to capitalize heavily on my savings... Apparently not.

 

The rates will drop again before they begin to rise which most likely won't be till the next presidency.

 

I don't know.. I think we will still see a rise after the sell off this spring...

If you really want to help the economy, freeze the level with which Credit Sharks can charge for Credit cards to no more than 2 over prime. I think where a lot of people are in trouble is in credit card debt. Most were likely ok, when they were given these 8% or lower CC's, only to see them illegally rise to over 30% or more.

Also, it would be nice if we could get some people in office that would encourage people to save money. The only way to do that as I see it, is to allow us to make savings tax exempt, across the board.

This means anything you make that you save goes directly from your employer to your bank account and is not taxed as income, as long as it stays in the bank for a certain period. Any interest you earn on that savings is NEVER taxed, even when you with draw.

No one saves any money because the government punishes you for doing so. What incentive is there to save???

 

The U.S. economy has entered into a recession that will be more painful and drawn out than the usual downturn, according to the the director of the Reuters/University of Michigan consumer sentiment survey. Curtin said that inflation pressures will continue complicating the task of policy-makers citing data from industry group The Conference Board.

"This is no ordinary recession," Curtin said. "The aftereffects will last much longer than the typical downturn."

Richard Curtin said the Conference Board's expectations index is a strong predictor of economic contractions, and that it is currently flashing red.

http://news.yahoo.com/s/nm/20080208/us_nm/usa_economy_recession_dc;_ylt=Aj_x9Mj8LVtrkPj_.zzKaW2yBhIF

 

The US can't expect too much help from India and China. The US exported 16 billion dollars to India in 2007 and exported approx 6 billion dollars a month to China. Total exports to China for 2007 were approx billion.

We are currently running a -23 mllion dollar a month defecit with China.

The combined exports to India and China for all of 2007 only equal 50% of the stimilus tax rebates of 152 billion.

 

Japan and China are Australia's largest export markets for a combined 25 billion per year of exports.

However, Australian banks may feel some pain from sub-prime loan losses in the US market.

 

There's no good news on the inflation front. Interest are decreasing and inflation is soaring. That smells bad in my book.

U.S consumer prices rose at a 5.6% annual rate during the December 2007 quarter.

The market is priced for 100% odds of a 50 basis-point cut occurring at the Fed's March 18 meeting and for 32% odds of a 75 basis-point cut, up from Thursday's 24%, according to Miller Tabak's Crescenzi.

For the April 30 meeting, the market is priced for 100% odds of a cumulative 50 basis points in cuts and 94% odds of 75 basis points in cuts, up from Thursday's 90%.

http://www.marketwatch.com/news/sto...-F977-4BF6-8C25-4AEB49402AC2}&dist=TNMostRead

 

Check this out. The power of public opinion.

http://wiredispatch.com/news/?id=39179

With a little bit of education, I'm pretty sure that people will understand what role the FED played, and how it is powerless to save them.

 

What people say and what they do are two different things. I think most people can't control themselves and they will spend the money. However most of what they buy is imported and all we are doing is stimulating the economy of China and Japan.

Interesting poll number was that "48 percent of homeowners polled worried that the value of their homes would drop"

It's not the role of Government to support a bubble. This is the real danger of a severe recession is the Fed's preocupation with the housing bubble.

 

G7 guys see that there could be a potential for $400 or more Billion worth of write offs.

http://fe15.news.re3.yahoo.com/s/nm/20080209/bs_nm/g7_dc

 

You can bet they will. Australian local councils and local governments are already looking to sue American investment banks for selling them sub prime investments. This scam was a massive ponzi scheme that has reached every corner of the globe.

The estimates so far are minor compared to what the real fall out will be. Worthless investments based on sub-prime loans were sold and resold over and over again. Pyramided up.

All of these institutions who bought the resales stand to lose trillions overall and then there is the litigation.

http://business.theage.com.au/council-to-sue-underwriter/20071221-1ijb.html

 

61% of Americans now believe the US economy is now suffering through its first recession since 2001, according to an Associated Press-Ipsos poll.

By one rough rule of thumb, a recession occurs when there are two consecutive quarters — six straight months — when the economy shrinks. That did not happen in the last recession, though. The economy contracted in the first quarter of 2001, turned positive in the second quarter, shrank in the third quarter and turned up again in the final quarter of that year.

The National Bureau of Economic Research, the recognized arbiters for dating recessions, uses a more complicated formula. It takes into account such things as employment and income growth. By that measure, the last recession was in 2001, starting in March and ending in November.

http://news.yahoo.com/s/ap/20080210/ap_on_bi_ge/recession_vibes;_ylt=AlQNdwWeATLuVjRAjFxXS8ys0NUE

 

All people hear about is recession this, recession that. We're in a bear market, but a recession? eh..

 

The media and politicians call it a recession so if you wait long enough it will become one, then once their profits start to get hurt by it they will say our economy has been saved and suddenly everyone will go out and buy things again. I don't watch the three major networks for a reason

 

Inflation is what will cause a severe recession. The collapse of the housing bubble is a healthy correction. But the Fed is setting us up for some real pain in the future.

The US Postal service has just raised the cost of a first class stamp to 42 cents. The last increase was 2 cents on May 14, 2007. That's a 7.6% increase in the cost of a stamp in one year. How does the Fed think that inflation isn't going up?