United States Heading towards a Depression?

Don't forget, "Dollar tanking..."

 

There's a lot of feel good mentality right now. But how many more investment banks may go down.

Merrill Lynch may be the next 'Bear Stearns'

JPMorgan forecast Merrill would write down an additional $2.1 billion of subprime debt, leading to a loss in the first quarter.

Merrill had $24.4 billion of mortgage-related write-downs in 2007, among the most on Wall Street, according to a Reuters tally.

http://news.yahoo.com/s/nm/20080325...jpmorgan_dc;_ylt=AsqagSTylhqs1U1Vt.t7RjeyBhIF

The housing market does not look good for 2008

US$512 billion in adjustable rate subprime mortgage loans will reset in the first six months of 2008.

The weaker job market, inflation and lower dollar (higher cost of living) as well as declining home values spell more foreclosures in 2008.

Many loans due to reset in 2008 have piggyback loans that finance 100 percent of the value of the home in 2006 and many of these homes have negative equity.

 

After the Presidential election things will get worse.

 

The tax rebates should kick in during June for around $1200 per family certain restrictions apply

Oil is back at $102 due to the weak dollar.

China is hurting right now and there should be another revaluation of the Yuan soon which will add to US inflation

 

The econonic news does not look good

1.7 percent dip in last month's orders of durable goods, , the second consecutive monthly decline.

Many analysts believe GDP growth may have dipped into negative territory from January through March

Sales of new homes fell 1.8 percent in February the fourth straight month of declines and pushed activity down to a 13-year low.

http://news.yahoo.com/s/ap/20080327/ap_on_bi_go_ec_fi/economy;_ylt=AtweIc4xbHLymILsOjaxQRGyBhIF

 

The big one is the jobs reports. If unemployment gets out of hand things will blow.

 

The Unemployment insurance weekly claim report will be released Friday March 27

The Employment Report for March 2008 is scheduled to be released on
Friday, April 4, at 8:30 A.M. (EDT).

 

As much as we talk doom and gloom, I really think the market will do fine, probably rebound in the fall.

We're going to drop heavily from now until May to June when the $500 Billion printing press known as the Fed works its inflation magic to prop up the stock markets. The economy looks like shit, but corporate earnings are still going to look fine, which keeps people happy.

Later this summer we'll see the effect of the economic stimulus package and the Fed's auctions of billions in credit. Corporate earnings will look great, durable goods orders will turn right around, but the value of the dollar will drop like a rock. The market will drop until these economic indicators get turned around by inflation. Because the markets are priced in dollars, the economy will look great to anyone not yet privy to how the market works. Gold, silver, and oil are going to new highs when all of this new credit/stimulus hits the market.

Sigh, glad I bought silver by the pounds and put hefty spot orders on silver after this recent fall. I'm looking for $25-$30 an ounce by year end. At this rate, Silver will be funding my college education. Bring on the inflation.

 

That's quite possible. Economic distress is not dependent upon a weak stock market.

The problem is, and will continue to be, whatever looks good, is priced in nominal, fiat currency. As smatts joked recently, we could all be billionaires. Of course, it could be in an economy where it costs $1 million to get a coffee.

Silver is such a good buy right now. Just remember it's a hedge, you're betting against inflation, not for a "real" profit.

Great post.

 

Even though we all know things are bad and most likely will get worse I really do hope for the sake of humanity, we all come to our senses, clean house and fix our economical situation, pull out of Iraq, stop the bleeding and get back on track to RE-building this country that has been divided and destroyed under King Bush for the last 8 years. I believe people as a whole have the potential to do great things, it is unfortunate that once in a while we have a few party poopers that spoil the party for everybody, such is the case with this "party" a bunch of neocon traitors got ahold of our government and took it for an expensive ride. We must change things or we'll be doomed to failure.

 

Things may be bad in your mind, but in reality, things are pretty good. Not sure what part of the world you live in, but I highly doubt Bush had anything to do with your despair.

 

Not worthy of a response.

 

I can piss about 15 feet.

 

Mature response. I canceled mine twice already.