What does your crystal ball say about the economy? (expenses, free market, real estate)

[jco]

Just reading through articles online there seem to be two extremes: doom and gloom or the government will save us. I've also read that the elections will help the economy and housing market just to read that it will destroy it in another article. What are your economic predictions for the US?

[peggydavis]

I would say many parts of the country will be in a recession, but not a depression. I think it will be short lived. I don't think the elections will make much difference.

[GreenMachine]

doom and gloom, coming soon.

i can already feel it in my business. everything is going to hell in a hand basket.

everybody, hold on to your money.

greenie

[StealthRabbit]

FWIW... (nothing)

Hopefully a minor and short term correction, and this doesn't spell catastrophe, tho it may for those leveraged into housing. I don't think the entire economy is in jeopardy over this mis-step, but it will be an ugly hit, just as the dot com bust.

I will predict (usually wrong...)

1) more volatility in equity markets and further disclosures of not so smart investments into the housing bubble. ~ 6 month.

2) temporary rebound, in both housing (not likely in Detroit or similar 'off-markets' ) and equities to buy some election dynamics.

3) temporary utopia over election results and very brief 'honeymoon' for newly elected.

4) unless someone gets serious about handling the major problems (unlikely) significant problems are on the horizon, just 'not-yet' (I hope... slightly worried)


We (USA) have sold out our manufacturing / engineering expertise and refused to strategically plan a sustainable future in the sciences. It was reported last week that of the few USA Eng and Science students that actually graduate, less than 25% get a career in that field or even continue education. We cannot expect to have higher social structure and quality of life if we are not willing to contribute. As stated, "we cannot be 'average'" we must far exceed average in test scores and contribution to society, or the growing nations will eat our lunch. We still have a great economic structure for innovation, but, we have created loopholes for foreign investment and corporate profits (and taxes) fleeing off shore. Thus not sustainable for jobs, income, revenue, growth, power.

Take a look at UK, Germany, Hungary, and France for historical perspective of once economically powerful countries. I think the transition is gonna hurt us more than it did them, as the USA has been very benevolent to other countries, I don't see that quality in the future powerhouses. I expect a 2 class society, and burdensome taxes in the future, but no real demise, just slow and painful transition, with lots of ups and downs, just more of them, and more volatility. I'm not sure the average American will be as graceful as the UK in giving up our power, as we have raised the "entitlement" generation, and they are real scary to deal with. (very poor negotiators)

Stay diversified, keep a global outlook, protect but do not hoard, share all you can... relationships will be more enduring than wealth (of which we may not have)

We've been very blessed.

[tallrick]

I see two possibilities, the first one (the worst) is a steady decline of living standards and purchasing power as our currency continues to be debased. Peak Oil takes its toll and we have the situation we are in now, increasing taxes and out of control living expenses. Foolish people continue to give more and more of there income to housing and food inflation follows the energy costs. This brings the end of our economy and a servitude to the well-connected.

The second and a much better possibility is a hard crash of the economy and a sharp decline in consumer spending. Peak Oil shocks everyone into pulling back on spending, the real estate bubble crashes hard and Government faces a fiscal crisis. With no more tax growth and foreign investors fleeing there's nothing left to bubble up. Desperation causes massive political reform and a more sound monetary policy. American Ingenuity once again flourishes if the Government becomes more free market. If this happens the United States will once again be the world's #1 economy. If it becomes more communist/socialist all is lost.

[skytrekker]

At this point there are many 'recession warnings' from most Wall Street Mavens and economists- the housing bust is turning into a meltdown-far beyond sub prime.

The Federal reserves hands are basically caught in a vice. The dollar is falling like a rock into deep water. If the Fed cuts rates again, the dollar falls more and commodities like oil rise as does gold. And even if the Fed does cut rates- banks are in dire straights and not be willing to lend. Adding further to the credit crunch. Oil prices now are causing hurt for many Americans.

There could be some major bank failures;plus a a run on some banks. The economy could be falling off a cliff. A moderate realistic view sees a recession next year- a more optimistic view sees a rapidly slowing economy- the 'doom and gloomers' see an economic meltdown.

Either way- some tough times will be ahead for many of us.

[Baja Boomer]

On February 22, 2006 Michael "Mish" Shedlock published a column on his blog titled "The Red Queen Race". He was pretty much right on the mark, and the column is still relevant today. You might want to read it, even though it's quite long.

http://globaleconomicanalysis.blogspot.com/...

My take: because our sad economic state of affairs involves much more than just the housing meltdown (wait till the unsecured credit card debt starts hitting the lenders!), things are likely to get very bad before they get better. I'm not sanguine that a new administration will be able to help much in the short term, because we are in such a huge complicated mess. Really, what did we expect from a President who ran every company he ever owned straight into the ground?

Get rid of your gas guzzler auto, grow a garden, learn how to can fruits and vegetables, tighten your belt and get a gun (just kidding about that last one ). Watch some "Waltons" reruns and see how they did it.

[Huckleberry3911948]

when chicken licken yells the sky is fallin, lots of stuff happens.
wait 6 months to buy.

[Philip T]

Originally Posted by jco

Just reading through articles online there seem to be two extremes: doom and gloom or the government will save us. I've also read that the elections will help the economy and housing market just to read that it will destroy it in another article. What are your economic predictions for the US?

Yeah the Worse Case and Best Case always get all the attention.

In practice it is generally the Changed Case that things turn out to be.

[gregandvicky]

I have seen this 3 times in my life. Best bend over and grab your backside with both hands. It will be tough on a lot of people for 3 or 4 years.