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It was never there in the first place. You astutely and correctly noted that the whole thing was a crock of excrement to begin with. Since none of the underlying issues to correct it were really addressed in the first place, it was merely the "extend and pretend" game of treating the symptoms but not the disease. Cough syrup only goes so far when you have double pneumonia and are in dire need of antibiotics and bed rest: The DOW SHOULD have been allowed to collapse to around 4k. Goldman Sachs SHOULD have been pulverized and fractured into about a dozen pieces. GM SHOULD have been allowed to fade into history a-la TWA and Pan Am. Paulson, Bernanke, Blankfein, and Geithner should have been sent to prison. And so on and so forth.
That's basically what happened here. Indeed the Voice Of Authority (along with the CNBC cheerleaders) had merely hoped to create a sulf-fulfilling recovery by repeating ad nauseum ad infinitum that all was well. So go out and spend. You know....if you tell the same lie over and over enough times, some people will start to accept it as truth.
I am one of those who doesn't believe in the legitimacy of the markets (DOW, S+P, CPI, etc.) any more than I believe in the Easter Bunny or the Tooth Fairy.
Those numbers are so concocted, maniupulated, and misleading as to be laughingly worthless. For example, the CPI conveniently ignores rising fuel and energy prices yet puts them front and center when they are falling.
You can't have it both ways *and* expect to hold any kind of credibility.
You are exactly right, for those who understand investing and how to value investments (whether that be a publicly traded company on the DOW or a rental property) they would know that things are still overpriced (especially housing). Housing prices are a function of rent. If you can buy a house for $600,000 but there is only demand for a renter to rent for $2,000/month (24,000/yr). This equates to a 4% return, that doesn't include property taxes, home insurance, or pay for upkeep. Once you factor all these things in you will probably end up with a 0, or negative percent return. There are a lot of houses (especially in california and Florida) that are priced at these levels even with how far prices have ALREADY fallen. Even if the price was a little cheaper and you could get a realized 4% return, why would you waste your energy with a 4% return on rental property that you have to constantly look after, update, and deal with tenants when you could get a 4% return from a stocks dividend or long-term bond. Housing prices are still severely overpriced and there are quite a few economists/investors that understand this formula but when they speak they are considered "doom and gloomers." They aren't doom and gloomers they just understand facts, investing, and basic economics.
To add to this, the gov't is PAYING home builders to build MORE houses. Before this crash home ownership was at an all time high for our country (meaning with more stringent lending standards we wouldn't even be able to fill all the houses we had BEFORE this crisis) and now we are adding even more houses to our inventory. How does that make sense? The gov't justifies it because they said they want people to have "jobs." Well they may have jobs but they are useless jobs if the job serves no purpose and will just result in an even bigger drop in home prices because the supply will be so high with little demand within the next few years (as interest rates rise, more banks fail, etc). Just for the record, this last quarter had more delinquent borrowers than any quarter during this crisis, and had the most bank closures than any quarter during this crisis. Things getting better?...hardly. Am I getting healthier if my common cold turns into Pneumonia? It doesn't make sense.
Last edited by hskrfan2187; 05-20-2010 at 09:21 PM..
I've never seen this video before, but there are a lot of facts in it. I'm glad they threw some Peter Schiff clips in there, if there was any true constitutionalist that should be in the Senate it is that man.
Last edited by hskrfan2187; 05-20-2010 at 09:01 PM..
A few short months ago the media was telling us how we were in recovery and how much better everything was getting. The eternal optimists were having a field day pointing out how wrong the “Doomers” were, and talking about Dow 15,000, and recovering housing markets. How things have now changed. Today we are looking at a market down another 300 after a 500 point loss in a couple of weeks. Unemployment numbers are up, and leading indicators are down. North Korea has been identified as the ones responsible for the sinking of a South Korean military ship, and is threatening all out war if they are retaliated against by military actions or sanctions. Europe is in chaos as the world has given them a vote of no confidence for their bail out plans. The Euro is dropping like a rock, and the Greece is facing civil unrest. World wide people are turning against their own governments as leaders are either being thrown out in elections as here in the US or resigning in disgrace as in Brittan. The banking industry has increasing numbers of “problem” institutions and the number has now grown to 775. Freddie Mac and Fannie Mae are continuing to loose money in mass quantity, and are in need of billions more to throw down their ever growing rat hole. Foreclosures are at an all time high. Our Federal deficit is growing at such a rapid pace as to even put fear into the IMF and the FED. Years of rewarding morally wrong behavior is beginning to catch up with us and yet we continue to try to fix the problems with the same morally wrong solutions. More debt, more pork, more give a ways to the financially irresponsible. How long before we find ourselves in the same situation as Greece? If this is recovery I suppose I really do not understand the meaning of the word.
Dont listen to the media they tell you want you want to hear or what they want you to hear. They lie constantly. You cant believe a word. I knew there was never a recovery and there might not be one. There are way too many corrupt people out there in the world and I would go into this a LOT more, but I will not.
A few short months ago the media was telling us how we were in recovery and how much better everything was getting. The eternal optimists were having a field day pointing out how wrong the “Doomers” were, and talking about Dow 15,000, and recovering housing markets. How things have now changed. Today we are looking at a market down another 300 after a 500 point loss in a couple of weeks. Unemployment numbers are up, and leading indicators are down. North Korea has been identified as the ones responsible for the sinking of a South Korean military ship, and is threatening all out war if they are retaliated against by military actions or sanctions. Europe is in chaos as the world has given them a vote of no confidence for their bail out plans. The Euro is dropping like a rock, and the Greece is facing civil unrest. World wide people are turning against their own governments as leaders are either being thrown out in elections as here in the US or resigning in disgrace as in Brittan. The banking industry has increasing numbers of “problem” institutions and the number has now grown to 775. Freddie Mac and Fannie Mae are continuing to loose money in mass quantity, and are in need of billions more to throw down their ever growing rat hole. Foreclosures are at an all time high. Our Federal deficit is growing at such a rapid pace as to even put fear into the IMF and the FED. Years of rewarding morally wrong behavior is beginning to catch up with us and yet we continue to try to fix the problems with the same morally wrong solutions. More debt, more pork, more give a ways to the financially irresponsible. How long before we find ourselves in the same situation as Greece? If this is recovery I suppose I really do not understand the meaning of the word.
This thing has got a loooooooong ways to go on the downside. When gold is at $2,000 or 2,200. Euro down to parity. Dinosaurs like GM gone like twa or pan am. Goldman, and other players smashed and pulverized. Then *maybe* you get to some kind of fair value on the dow or s&p. Dow 4,000, S&P 450?
The only thing that's "recovered" is the optimism of the mainstream media. Even with 12% or 20% unemployment, they do about 5% gloom (real news) and 95% cheerleading.
Maybe a bigger story is, what's happened to all "recoveries" over the last 30-35 years? Have they all been mirages? And only now are we catching on that this one has been false. But they've all been false in some way. This one has just been magnified.
The dow is going to drop like a rock one of these days when the market really forces the issue. These down 300 days are going to be like kiddie play.
The S&P 500 has been flat over the last 10 years against a backdrop of very low interest rates (30 year between 4-6%). 10 year basically 3-6%.What happens when those double, or higher?
We're in the mother of all corrections. We're also correcting for those jobless recoveries we had as we are now finding out that we recovered only because they laxed the lending laws and everyone and their brother were existing on loans, not money they earned/saved.
There will be no recovery until the debt is purged.
Hello. I have a quick questions for the posters above and other "doomers". I don't mean to put a label on you or anything, but I have a quick question. Is your personal quality of life materially worst than it was two years ago? Does your pessimism stem from your own hardship or just from things you read about or see on the news?
Let me answer that. My pessimism is based on the fact that last year I bought a Freddie Mac repoed farm for less than the cost of a new-used pickup truck. Also this year my wife's work hours have been cut by 25% and my daughter completely lost her job and is unable to find any work. Both are located in a major SW city. On the rental front, I have owned a commercial property for almost ten years that has never been vacant since I've owned it yet it has been empty for the last seven months. Also I should mention that the commercial renter I still have is about to go broke and leave.
Anyone that thinks we are in a recovery has their head so deep in the sand that they can see the Chinese bank that has all our money.
Until we get some government spending cuts and bureaucracy(waste) and taxation simplification underway, along with a pro business, pro investment environment, we go nowhere.
We continue to herd business overseas with our burdensome, overbearing needy governments(local to federal) and stupid threats like cap and tax.
We are repeating all the mistakes of the Great Depression. Which by the way would have been a footnote in history as a sharp recession if the stupid government had got out of the way and not crushed investment with absurd taxes and stupid policies like the Smoot Hawley act.
Until we get some government spending cuts and bureaucracy(waste) and taxation simplification underway, along with a pro business, pro investment environment, we go nowhere.
We continue to herd business overseas with our burdensome, overbearing needy governments(local to federal) and stupid threats like cap and tax.
We are repeating all the mistakes of the Great Depression. Which by the way would have been a footnote in history as a sharp recession if the stupid government had got out of the way and not crushed investment with absurd taxes and stupid policies like the Smoot Hawley act.
Nothing to say but.... Somebody gets it. There's a reason college tuition is out of control...it became unaffordable when the government started guaranteeing student loans, making it easy for everybody to get loans. Once that happened its basic supply and demand...More demand, less supply, Increased prices. There were decades or history in our country where if you wanted to go to college all you had to do was work a summer job to afford it. That was when the free market ran college tuition...now the government runs it. Yet people continue to look to the government to fix our problems...the government IS THE PROBLEM!
Nothing to say but.... Somebody gets it. There's a reason college tuition is out of control...it became unaffordable when the government started guaranteeing student loans, making it easy for everybody to get loans. Once that happened its basic supply and demand...More demand, less supply, Increased prices. There were decades or history in our country where if you wanted to go to college all you had to do was work a summer job to afford it. That was when the free market ran college tuition...now the government runs it. Yet people continue to look to the government to fix our problems...the government IS THE PROBLEM!
The student loan deal isn't one bit different than the mortgage screw up and the "recovery"(reality) will be painful for many. The more government meddles the more of a mess it is.
When I went to college in the 1990's, my junior college tuition was $1200 a year and when I transferred to a 4 year school it was $2100 a year. Would not want to know what it is now.
The student loan deal isn't one bit different than the mortgage screw up and the "recovery"(reality) will be painful for many. The more government meddles the more of a mess it is.
When I went to college in the 1990's, my junior college tuition was $1200 a year and when I transferred to a 4 year school it was $2100 a year. Would not want to know what it is now.
Oh I understand the mortgage debacle. I was just using the student loan situation as an example. One thing that's encouraging is that it's unsustainable and will have to come crashing down and hopefully we let the free markets take over again...but the fact that we are keeping it going this long with added debt each day makes it a little worrisome in the same sense because the crash and correction is going to be harder with each day we do the wrong thing.
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