So is the sale of my home hopeless?

[JamesBoyer]

Originally Posted by sholden

That's simply just not the case. Yes recessions are made worse by people's fear resulting in lower spending and hence less production and hence fewer jobs and hence less spending and so on. But that's a good thing!

This "avoid/limit the recession" by convincing/forcing people to spend money is the cause of the current problems. It does work, it avoids and shortens recessions. However, recessions serve an essential purpose - they free up poorly invested capital so that better more productive investments can be made.

Running an economy build on consumer debt is unsustainable - at some point the debt has to be repaid and at that point consumption must drop. All buying things on credit does is move future consumption to the present, and in fact reduces overall consumption due to interest having to be paid. Note, this only applies to "consumption", borrowing to invest is a completely different beast. Since the interest in that case is paid by the profits from the investment.

Currently the US has managed to put a huge junk of its capital into housing, instead of into productive investments. That needs to change, the only alternative is that the US turns into just another garbage economy like Argentina.

If the the 2001 recession hadn't been "avoided/limited" by pouring money into the system (and inflating housing prices as a side effect) we wouldn't be in this mess. Basically the pain we should have gone through then has been delayed until now, and the longer it is delayed the worse is will be since the bad investments have increased.

People saving 25% of their income would be a wonderful thing. Those savings are the capital that will be invested in productive endevours that bring about future prosperity. Yes it hurts now. Avoiding short term pain is a bad idea, since it's a required part of long term prosperity.

The "make everyone feel good" so they spend and invest is garbage. It would be fine if people felt good based upon good fundamentals, but faking it doesn't work. Faking it means people feel good about investments which are bad - you need a recession to purge the bad investments so that people will justifiably feel good about what remains at the end.

Delaying the pain will turn what should have been a large recession in 2001, into a full blown depression. If the government would stop trying to delay the pain we might get away with just a very severe recession now - but they aren't doing so so depression here we come.

Now, was that positive enough for everyone?

I can see that you are totally in line with your economic beliefs with Herbert Hover, US president who presided over the country entering into the great depression. A man who lead a government which did very little to help the economy once they were aware it was going down in flames.

It was the wrong approach then and now.

[theoakman]

Originally Posted by JamesBoyer

I can see that you are totally in line with your economic beliefs with Herbert Hover, US president who presided over the country entering into the great depression. A man who lead a government which did very little to help the economy once they were aware it was going down in flames.

It was the wrong approach then and now.

Complete revisionist history. I would suggest you read "America's Great Depression" by Murray N. Rothbard to learn what Herbert Hoover's administration was all about. You can even get it for free.

http://mises.org/rothbard/agd.pdf

The government solved every depression in the 1800s by not doing anything. The only one they ever tried to solve turned into the great depression. To label Hoover as a "do nothing" president is beyond ridiculous and it's a fallacy that is spread by too many people in the mainstream media. Hoover was the most interventionalist president we ever had. Here's a quote from Hoover in 32 which defines his presidency.

we might have done nothing. That would have been
utter ruin. Instead we met the situation with proposals
to private business and to Congress of the most gigantic
program of economic defense and counterattack ever
evolved in the history of the Republic. We put it into
action. . . . “the common run
of men and women.” Some of the reactionary economists
urged that we should allow the liquidation to take
its course until we had found bottom. . . . We determined
that we would not follow the advice of the bitterend
liquidationists and see the whole body of debtors of
the United States brought to bankruptcy and the savings
of our people brought to destruction.

[sholden]

Originally Posted by JamesBoyer

I can see that you are totally in line with your economic beliefs with Herbert Hover, US president who presided over the country entering into the great depression. A man who lead a government which did very little to help the economy once they were aware it was going down in flames.

It was the wrong approach then and now.

Alternatively you could learn some history

Let's see, what are some of the things Hoover, Mr "very little" according to you, did:

* set up the National Credit Associationto back-stop banks
* set up the Reconstruction Finance Corporation with $2 billion to save banks from failure
* Persuading companies to commit $1.8 billion to new infrastructure projects.
* $600 million in federal public works
* $1.5 billion of loans to stimulate employment
* Persuading companies to maintain wage levels

Basically 90% of the "New Deal" was actually Hoover, he just lost an election before people noticed. And yes the numbers are tiny, inflation is so much fun.

Sure if you think Keynes is the be all and end all of economics then spend-spend-spend is the solution to all economic problems. You would think the joys of stagflation not that long ago would have convinced the last remaining Keynesians of the idiocy of that theory, but apparently not.

[Bill Keegan]

Originally Posted by JamesBoyer

Oh please, stop that.

Such conspiracy theories belong in the X Files. They have very little place in real life, and would tend to be extremely difficult to pull off considering getting Realtors to agree on anything other than the raw data is worse than trying to heard cats.

James, you really should be less defensive. She didn't say anything that wasn't true. Sellers usually do set their listing prices based, at least in part, on data they get from their listing agent. And many of those agents will in fact manipulate that data, most often by bringing data that supports what they want to show, and leaving contrary data behind. Sure, sellers often inflate the value of their own homes, and feel that somehow they are immune to market forces, but certainly we can agree that real estate agents bring, and sometimes manipulate, the data, can't we?

[Amazonas]

Originally Posted by Bill Keegan

James, you really should be less defensive. She didn't say anything that wasn't true. Sellers usually do set their listing prices based, at least in part, on data they get from their listing agent. And many of those agents will in fact manipulate that data, most often by bringing data that supports what they want to show, and leaving contrary data behind. Sure, sellers often inflate the value of their own homes, and feel that somehow they are immune to market forces, but certainly we can agree that real estate agents bring, and sometimes manipulate, the data, can't we?

Indeed!...If the accountants in charge of keeping Enron's balance sheet and income statements as accurately as possible, delivarately manipulated the financial statements, then what can deter any person(s) of doing the same in any other segment of business activity? I can not help to use the Enron case simply because despite having the SEC, AICPA, and FASB as regulators that did not stop them from dismissing business ethics to engage in greed. Maybe because they're partners in crime. Sorry for the hijack...

[Diana Sacchiero]

Where in ocean county are you located? If I can sell, I'd like to buy in Ortley Beach. Are you in that Area? House or condo.?