The beginning of a Very Great Recession or Depression

[Amsel]

I would like to open some dialogue on the current economic status of our nation. It is extremely hard to get an accurate asessment or "no spin" info about the future of the USD.

"There has been and will be resistance to the inevitable deep recession that is coming. The American consumer is not cutting back willingly. They are being dragged kicking and screaming towards the joys of frugality. The “material generation” needs to dematerialize. My biggest concern is that our politician leaders and their cronies running our government will continue to try and reverse the normal capitalistic course of recession and expansion. Companies need to fail, housing needs to find its bottom based on supply, demand and price. Those who gambled must be allowed to lose and suffer the consequences. If the government attempts to shift the losses to those who lived lifestyles of thrift, an angry uprising will ensue. Government intervention in this natural process could lead to a decade long depression. Let’s hope that reasonable heads prevail. "

*The Great Consumer Crash of 2009 : Information Clearing House - ICH

The last time the FDIC had borrowed funds from the Treasury was at nearly the tail end of the savings-and-loan crisis in the early 1990s after thousands of banks were shuttered.

The fact that the agency is considering the option again, after the collapse of just nine banks this year, illustrates the concern among Washington regulators about the weakness of the U.S. banking system in the wake of the credit crisis, the Journal said.

FDIC may borrow money from Treasury: report - Yahoo! News

[FLYBOYJ]

Amsel, I couldn't agree more and it will be after the elections we'll see if a lot of this comes to pass. My 401K has taken a beating until I put it all into a money market account which is doing well considering the instability of Wall Street.

Several years ago my wife and I developed our own economic policy. All credit cards were paid off as well as auto loans. We bought our house with an ARM and the minute the rate changed we dumped the ARM and went fixed (this is when the real estate boom was at its highest). We developed a life style that enables us to save but also live comfortable. There was a bit of sacrifice but I see it paying off, especially when I see other folks complaining about the economy, gas prices, etc.

I remember the last "crash." 1989-1992 and it was because of that economic downturn Bill Clinton was able to pull off his first election victory and in some ways I see the same thing happening today. YES - "Companies need to fail, housing needs to find its bottom based on supply, demand and price. Those who gambled must be allowed to lose and suffer the consequences. If the government attempts to shift the losses to those who lived lifestyles of thrift, an angry uprising will ensue. Government intervention in this natural process could lead to a decade long depression. Let’s hope that reasonable heads prevail."

Again, I couldn't agree more.

[JugBR]

if the financial system was soo good they could be capable to predict the economic crisis, but thats not that we see. but the bomb allways explode !

[FLYBOYJ]

Originally Posted by JugBR

if the financial system was soo good they could be capable to predict the economic crisis, but thats not that we see. but the bomb allways explode !

Actually there were some who did see it coming. This is a cycle and it happens every 10 to 15 years. When 9-11 happened it kind of induced a mini recession - steps were taken to rebound the US economy and it worked brilliantly but like anything that goes up, something will bring it down. The price of gas went up and the mortgage industry gave loans to people who shouldn't have been trying to buy a home to begin with - in a nut shell that's why we're in the current position we're in.

[timshatz]

I dunno guys. I read the article (all 16 pages) and I came away thinking it wasn't very good. Slanted, chicken little, the sky is falling stuff. At one point, the writer notes that pricing for housing has gone from an average price of 125K to 225K in 7 years. But the actual average for that time would've put housing prices around 200K. Further, housing prices have already come down from an average of 242K.

In short, his numbers are off in some places and skewed in others.

While there are parts of the basic premiss I agree with (we do not save enough in this country and are way to heavily in debt) the Recession we are in now is working that problem through the country. It's going to hurt a lot of people who've never been through a serious Recession (under 40) but by watching your expenses you should be fine.

Flyboy J, good move. You are on the right side of problem. The people who are going to get hit by this one are the suckers. Same as always. "There's a sucker born every minute". Very true. Probably the ones who thought they could make a million dollars in real estate and not have to work for it. Right.

PS- The unemployment figures he notes are way off. There is no way unemployement in this country stands at 14%. While people have stop looking for a job, the base of 5.6% might have another percentage point or so added to it for people who have stopped looking. Maybe. And keep in mind the percentage of hard core unemployed (read- Unemployable) is usually around 3-3.5%.

[Amsel]

It is somewhat difficult to find solid and credible evidence on our economy and it's future. While American news outlets will understate conditions to ease a potential run on the banks , others may have nothing but doom and gloom. The potential is there for a catastrophic, life changing depresssion and not much can be done about it except taking drastic measures in how we use credit and banks. So far I can't see anything being done besides a quick fix patch which will eventually lead to higher inflation and worse economic woes in the future.

Video- CNBC.com

[FLYBOYJ]

Originally Posted by Amsel

So far I can't see anything being done besides a quick fix patch which will eventually lead to higher inflation and worse economic woes in the future.

I think everything should be left as is and allow the economy to ride itself out as you stated earlier. At the same time I would keep tax breaks in place - many folks complain about the Bush tax breaks and how it favored the "rich" (no one has really defined when someone is rich). It's the folks at the upper middle class and upper class who will continue to invest their money if their tax base is kept favorable.

[FLYBOYJ]

Originally Posted by timshatz

Flyboy J, good move. You are on the right side of problem. The people who are going to get hit by this one are the suckers. Same as always. "There's a sucker born every minute". Very true. Probably the ones who thought they could make a million dollars in real estate and not have to work for it. Right.

Thanks - it took a few years for it to sink in but I think I'm finally on the right track.

[Amsel]

Originally Posted by FLYBOYJ

I think everything should be left as is and allow the economy to ride itself out as you stated earlier. At the same time I would keep tax breaks in place - many folks complain about the Bush tax breaks and how it favored the "rich" (no one has really defined when someone is rich). It's the folks at the upper middle class and upper class who will continue to invest their money if their tax base is kept favorable.

One of the main things we can do as a consumer is to not live beyond our means. We need to have harsh punishments against employers who use illegal immigrants to drive down wages. We also need to bring manufacturing back to the U.S. I am not too sure what can be done about speculation in the oil business. The main thing is to bring the dollar back up to strength.

[mkloby]

Originally Posted by timshatz

Flyboy J, good move. You are on the right side of problem. The people who are going to get hit by this one are the suckers. Same as always. "There's a sucker born every minute". Very true. Probably the ones who thought they could make a million dollars in real estate and not have to work for it. Right.

PS- The unemployment figures he notes are way off. There is no way unemployement in this country stands at 14%. While people have stop looking for a job, the base of 5.6% might have another percentage point or so added to it for people who have stopped looking. Maybe. And keep in mind the percentage of hard core unemployed (read- Unemployable) is usually around 3-3.5%.

Dude - you mean the infomercial I saw at 3am was lying?

Also, if policies that squeeze corporations and small business owners are put into practice, such as raising corporate taxes, minimum wage, and increasing FICA the unemployment rate can be expected to rise.

[Oreo]

Originally Posted by FLYBOYJ

I think everything should be left as is and allow the economy to ride itself out as you stated earlier. At the same time I would keep tax breaks in place - many folks complain about the Bush tax breaks and how it favored the "rich" (no one has really defined when someone is rich). It's the folks at the upper middle class and upper class who will continue to invest their money if their tax base is kept favorable.

I absolutely agree. Now-- getting politicians to actually do that. . . . . .

[Oreo]

Originally Posted by mkloby

Also, if policies that squeeze corporations and small business owners are put into practice, such as raising corporate taxes, minimum wage, and increasing FICA the unemployment rate can be expected to rise.

Absolute fiscal suicide.

[Oreo]

Originally Posted by Amsel

One of the main things we can do as a consumer is to not live beyond our means. We need to have harsh punishments against employers who use illegal immigrants to drive down wages. We also need to bring manufacturing back to the U.S. I am not too sure what can be done about speculation in the oil business. The main thing is to bring the dollar back up to strength.

Don't get me started, boss. . . . .

[wilbur1]

Lets blowup wallymart

[FLYBOYJ]

Originally Posted by wilbur1

Lets blowup wallymart

Why???