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Suffice it to say that the banking industry isn't out of the woods, yet. We've still got some suffering to do. And frankly, we need it. Homes are still waaaay over-priced in places like California and Florida. Until the market fully corrects itself, things will remains stagnant.
Hi CMartel2,
Of course. Thats the source of most of our money. When banks write mortgages they produce bank credit and essentially monetize real estate. Where the money going to come from with out it?
Quote:
Granted, some of the above loans can be recast into fixed rate mortages, but let's be honest: most of these people bought more house than they could afford. 80% took the minimum payment option. In other words, aside from just having the tax payer buy the whole house and give it to the irresponsible buyer, there's just not much wiggle room.
As is, the banking system and money creation complex is dead. The interest mortgage deduction, population growth, home ownership rates, Fannie , Freddie, Gennie Mae, lowering interest rates have all propped up housing asset prices which has been the life blood of the FIRE economy and it extended it into a 50 year super cycle.
Anyone who thinks this was caused by a recent sub prime crisis is so deluded and clueless to the actual money creation complex of bank credit money they don't know they are playing in a puddle next to the ocean. The sub prime was a last desperate extension of the collapse that would simply have happened earlier if it were not for monetizing sub prime debt. . I suppose some people just figured the rest of the economy would inflate to relieve pressure on debtors to tread water. It was not happening.
Now I know the doom and gloom crowd will jump on me with another graph or other reason why we should all buy ammo and lock ourselves in the bunker with lots of gold, but here is a little more encouraging news.
US Economy Is Finally Showing Signs of a Recovery - Economy * US * News * Story - CNBC.com (http://www.cnbc.com/id/29740421 - broken link)
I think it's time for the bears to put away their claws and for the bulls to raise their heads.
I've noticed that the general attitude of people is improving (at least around here). People are taking vacations. Making plans for Easter. Spending money on home improvements.
Hopefully this is a spring clean up for the economy.
I think it's time for the bears to put away their claws and for the bulls to raise their heads.
I've noticed that the general attitude of people is improving (at least around here). People are taking vacations. Making plans for Easter. Spending money on home improvements.
Hopefully this is a spring clean up for the economy.
I've noticed the same positive momentum around my area as well. I think that people are getting tired of hoarding money, and are getting the "itch" to spend a bit more- especially with all of the great retail deals out there. The latest reports are indicating that consumer confidence is finally improving:
I'm venturing to guess that we may be close to hitting bottom, or we may already have. If that's the case, the slow recovery can begin (crossing fingers).
Last edited by downtownnola; 03-18-2009 at 04:41 PM..
Reason: Link
Our government is now the lending system for our consumption. Turning our government into a credit agency is the last leg of the collapse of an economic system.
on the positive side, i think on a personal level that you can be as happy as you want to be if you are prepared.
Location: where you sip the tea of the breasts of the spinsters of Utica
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There are shock waves, things go up and down for a while before really crashing. In GD 1, the stock market crash happened in 1929, but I don't think the actual economy bottomed out in terms of GDP and unemployment until something like 1933. We've hit a couple of shock waves which have circled the globe and will set off other events internationally, which will send their own shock waves back at us, and so on.
I sense a temporary small upswing for a while. I don't think things will bottom out for another 2-3 years though, and then another few years of trending back up slowly (assuming that there are no other catastrophes such as nuclear war or pandemic).
A very big problem with recovery will be increased demand for oil - but we've already peaked on production of any easily extracted oil. So increased demand for a diminishing product will lead to astronomical prices, which will hinder recovery tremendously.
Pray the TPTB will show uncharacteristic wisdom and begin to get serious about developing alternative energy sources.
If the system is going to crash and we're all doomed, why are we only seeing that mantra from "experts" here on this board and not anywhere else? Are the real world economists all part of "the conspiracy" along with the government and the Fed?
I'm sure there are some rose colored assumptions coming from some people in the media and the mainstream economists, but NO ONE is predicting a collapse, except on this board. In fact, the general consensus and the indicators are pointing to things getting "less worse" and trending toward future growth.
Many people are warning about inflationary pressures and a return to the late 1970's, but the majority opinion is that deflation is not a concern anymore and we'll see things become less bad and then a plateau followed by slow growth. Collapse has not been mentioned.
Now I know the doom and gloom crowd will jump on me with another graph or other reason why we should all buy ammo and lock ourselves in the bunker with lots of gold, but here is a little more encouraging news.
US Economy Is Finally Showing Signs of a Recovery - Economy * US * News * Story - CNBC.com (http://www.cnbc.com/id/29740421 - broken link)
along with:
The People’s Bank of China sees potential rebound in gold, oil, other resource prices, but feels outlook for U.S. dollar uncertain beyond start of year as the U.S. deficit and low rates sap attraction of dollar assets.
this look like a scooby doo "rut-row" squeeze play on our purchasing power.
Last edited by floridasandy; 03-19-2009 at 10:26 PM..
Things will get better. They are already getting better. I'm mildly optimistic that we have reached the bottom and are climbing out.
I'm not seeing much improvement at all right now. I know a few people who are out of work. The best I can hope for in general is the economy turning around by the end of this year.
I am also worried about the inflationary impacts of the rapid rise in crude oil prices yet again. A barrel of oil just went up 8-9% yesterday and is now in the $50-55 dolar range. Gold also catapulted up $70 in one day. If the dollar loses value, gold is used as a hedge bet. It's like this economy can never find middle ground. We go several months worrying about rampant deleverging and deflation, and then we turn around and we are back where we started again with the speculative traders betting on higher oil prices yet again.
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