United States Heading towards a Depression?

Discussion in 'Politics & Religion' started by decoyjames, Dec 27, 2007.

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  1. wisdomtool

    wisdomtool Moderator Staff

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    #741
    The way they drop interest rates, it will soon be as what Japan had experienced near zero interest rates and still a falling economy.

     
    wisdomtool, Mar 5, 2008 IP
  2. bogart

    bogart Notable Member

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    #742
    The US is lot diffrent than Japan. The Japanese have a trade surpluss and trillions in cash reserves and the US is a debtor nation with a 4.1% inflation rate.
     
    bogart, Mar 5, 2008 IP
  3. wisdomtool

    wisdomtool Moderator Staff

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    #743
    Japan suffered a lot during that period, wonder what will happen to USA under such circumstances

     
    wisdomtool, Mar 5, 2008 IP
  4. bogart

    bogart Notable Member

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    #744
    The Japanese suffered due to the effects of a deflationary spiral. The US wouldn't be that lucky. I beleive the US faces the greatest danger in a dollar collapse and inflation.
     
    bogart, Mar 5, 2008 IP
  5. wisdomtool

    wisdomtool Moderator Staff

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    #745
    IMHO Deflation is worse than inflation, I won't really consider the Japs lucky.

     
    wisdomtool, Mar 6, 2008 IP
  6. alstar70

    alstar70 Peon

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    #746
    I think the next president will determine whether the USA has a depression or not - the price of oil is not helping - if they are serious they will start to move the USA to a post-oil economy?!
     
    alstar70, Mar 6, 2008 IP
  7. wisdomtool

    wisdomtool Moderator Staff

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    #747
    Frankly whoever is the President won't be able to help much by then. Economical growth or decline isn't normally at the finger tips of one man.

     
    wisdomtool, Mar 6, 2008 IP
  8. guerilla

    guerilla Notable Member

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    #748
    Deflation and inflation are neither good nor bad. They are ying and yang.

    What's bad is only having deflation, or only having inflation.
     
    guerilla, Mar 6, 2008 IP
  9. smatts9

    smatts9 Active Member

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    #749
    I also think deflation is worse than inflation.
     
    smatts9, Mar 6, 2008 IP
  10. bogart

    bogart Notable Member

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    #750
    Americans' percentage of equity in their homes fell below 50 percent for the first time on record since 1945, the Federal Reserve said Thursday.

    Home equity, which is equal to the percentage of a home's market value minus mortgage-related debt, has steadily decreased even as home prices jumped earlier this decade due to a surge in cash-out refinances, home equity loans and lines of credit and an increase in 100 percent or more home financing.

    Moody's Economy.com estimates that 8.8 million homeowners, or about 10.3 percent of homes, will have zero or negative equity by the end of the month. Even more disturbing, about 13.8 million households, or 15.9 percent, will be "upside down" if prices fall 20 percent from their peak.

    http://news.yahoo.com/s/ap/20080306/ap_on_bi_ge/home_equity

    Hyper-inflation like went on in Argentina in the 1970s is worse. It wipes out the middle class. At the end it costs you millions to buy a loaf of bread.
     
    bogart, Mar 6, 2008 IP
  11. korr

    korr Peon

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    #751
    There was deflation in America during the later part of the 19th century (in between two panics) where American's purchasing power actually grew and new industry was popping up everywhere.

    Deflation isn't, in itself, a bad thing. A sudden, swift contraction of the money supply is a whole different phenomenon that may lead to results including deflation.

    Or Brazil when you need tanks on the street and military dictatorship to keep people going to work.
     
    korr, Mar 6, 2008 IP
  12. guerilla

    guerilla Notable Member

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    #752
    http://www.newsweek.com/id/118914/page/1
    Reviving the Real Estate Market
    Why lower home prices are the only true solution to the housing collapse

    Excerpt
     
    guerilla, Mar 6, 2008 IP
  13. smatts9

    smatts9 Active Member

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    #753
    Mortgage Markets `Utterly Unhinged'

    There are also something like 1.3 million or so home loans that get to be reset this year.

    There is a lot of leverage that needs to be unwound.
     
    smatts9, Mar 6, 2008 IP
  14. Mia

    Mia R.I.P. STEVE JOBS

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    #754
    Anyone here about the three biggest lenders, Country Wide, Citigroup etc, paying out $460 mil to their CEO's over 5 years? That's over 30 mil a piece each... No wonder these guys are in trouble. My suggestion.. If you hold a cc or other no-reclaimable/intangible debt to these guys, just don't pay it. They deserve to crash and burn.
     
    Mia, Mar 6, 2008 IP
  15. smatts9

    smatts9 Active Member

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    #755
    Hell yeah, I've been preachin' burn n' die for these companies for some time now. You can lump in Lehman Bros. in there too. It is not the $460 mln. that put them in trouble, that is just a drop in the bucket over the years.
     
    smatts9, Mar 6, 2008 IP
  16. Mia

    Mia R.I.P. STEVE JOBS

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    #756
    $460 million is not just a drop in the bucket when compared to a 20 billion dollar loss. It is 1/2 billion in that equation of loss... if it were 20 million to 20 billion, yeah, drop in the bucket... 1/2 bil to 20 bil? It's a noticeable part of the problem.
     
    Mia, Mar 6, 2008 IP
  17. smatts9

    smatts9 Active Member

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    #757
    They would be completely fine if it were not for stupid decisions and this does not include CEO Pay. There are many other companies paying their CEO's loads of money and they are fine. A lot of it is stock options as well.
     
    smatts9, Mar 6, 2008 IP
  18. Mia

    Mia R.I.P. STEVE JOBS

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    #758
    It's not just the CEO pay, but as recently as a week ago CountryWide sent their 30 top executives on a multi-million dollar week long ski outing in Aspen...
     
    Mia, Mar 6, 2008 IP
  19. wisdomtool

    wisdomtool Moderator Staff

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    #759
    A week ago? I am surprise that there is no outrage from the shareholders? Also do those top executives have the heart to go on such vacation given the state of their company? Goodness!

     
    wisdomtool, Mar 6, 2008 IP
  20. slinky

    slinky Banned

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    #760
    WTF are you babbling about? The shareholders don't deserve any of this mess which is the result of CEOs and corporate executives raping more American corporations without any fear of punishment. The victims of Enron were the shareholders and they are at the mercy of these corrupt boards, executives and politicians who won't take them down.

    What is even worse is the supposed "foreclosure crisis" which taxpayer dollars should not be funding to help 'bail out.' Who are the baliees? People who extended themselves way beyond their financial means. People who bought second and third homes and shouldn't have. Let them deal with their own messes instead of having creditworthy, responsible Americans continue to bail out those truly responsible for this mess.

    America is in for a long, hard haul because it's been everyone out for himself, starting from Citizen Number One, and they could care less about the welfare of the country and people so long as, during their lifetime, they have more than what they need financially.
     
    slinky, Mar 7, 2008 IP
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