17 reasons America needs a recession
11-21-2007, 04:10 PM
#1
17 reasons America needs a recession
- PAUL B. FARRELL
Think positive, this 'slow motion train wreck' is good for the U.S.
1. Purge the excesses of the housing boom
No, it's not heartless. Not like wartime calculations of "acceptable collateral damage." Yes, The Economist admits "the economic and social costs of recession are painful: unemployment, lower wages and profits, and bankruptcy." But we can't reverse Greenspan's excessive rate cuts that created the housing/credit crisis. It'll be painful for everyone, especially millions of unlucky, mislead homeowners who must bear the brunt of Wall Street's greed and Washington's policy failures.
2. U.S. dollar wake-up call
Reverse the dollar's free fall and revive our global credibility. Warnings from China, France, Iran, Venezuela and supermodel Gisele haven't fazed Washington. Recession will.
3. Write-offs
Expose Wall Street's shadow-banking system. They're playing with $300 trillion in derivatives and still hiding over $100 billion of toxic off-balance sheet asset-backed securities, plus another $300 billion hidden worldwide. A lack of transparency is killing our international credibility. Write it all off, now!
4. Budgeting
Force fiscal restraint back into government. America has been living way beyond its means for years: A recession will cut back revenues at all levels of government and cutbacks will encourage balanced budgeting.
5. Overconfidence
A recession will wake up short-term investors playing the market. In bull markets traders ride the rising tide, gaining false confidence that they're financial geniuses. Downturns bruise egos but encourage rational long-term strategies.
6. Ratings
Rating agencies have massive conflicts of interest; they aren't doing their job. They're supposed to represent the investors, but favor Corporate America, which pays for the reports. Shake them up.
7. China
Trigger an internal recession in China. Make it realize America's not going into debt forever to finance China's domestic growth and military war machine. A recession will also slow recycling their reserves through sovereign funds to our equities.
8. Oil
Force the energy and auto industries to get serious about emission standards and reducing oil dependency.
9. Inflation
Expose the "core inflation" farce Washington uses to sugarcoat reality.
10. Moral hazard
Slow the Fed from cutting interest rates to bail out speculators.
11. War costs
Force Washington to get honest about how it's going to pay for our wars, other than supplemental bills that are worse than Enron-style debt financing.
12. CEO pay
Further expose CEO compensation that's now about five hundred times the salaries of workers, compared with about 40 times a generation ago.
13. Privatization
Stop the privatization of our federal government to no-bid contractors and high-priced mercenary armies fighting our wars.
14. Entitlements
Force Congress to get serious about the coming Social Security/Medicare disaster. With boomers now retiring, this problem can only get worse: A recession now could avoid a depression later.
15. Consumers
Yes, we're all living way beyond our means, piling up excessive credit-card debt, encouraged by government leaders who tell us "deficits don't matter." Recessions will pressure individuals to reduce spending and increase savings.
16. Regulation
Lobbyists have replaced regulation. Extreme theories of unrestrained free trade plus zero regulation just don't work; proven by our credit crisis, hedge funds' nondisclosures, private-equity taxation, rating agencies failures, junk home mortgages, and more. Get real, folks.
17. Sacrifice
"We have not seen a nationwide decline in housing like this since the Great Depression, says Wells Fargo CEO John Stumpf. As individuals and as a nation Americans have always performed best in crises, like the Depression or WWII, times when we're all asked to make sacrifices. Pampering us with interest-rate cuts and tax cuts during the Iraq and Afghan wars may have stimulated the economy temporarily, but they delayed the real damage of the '90s stock bubble while setting the stage for this new subprime/credit crisis.
Wake up, the train wrecked. Time to think positive, find solutions, demand sacrifices. End of Story
http://www.marketwatch.com/news/stor...ist=TNMostRead
Think positive, this 'slow motion train wreck' is good for the U.S.
1. Purge the excesses of the housing boom
No, it's not heartless. Not like wartime calculations of "acceptable collateral damage." Yes, The Economist admits "the economic and social costs of recession are painful: unemployment, lower wages and profits, and bankruptcy." But we can't reverse Greenspan's excessive rate cuts that created the housing/credit crisis. It'll be painful for everyone, especially millions of unlucky, mislead homeowners who must bear the brunt of Wall Street's greed and Washington's policy failures.
2. U.S. dollar wake-up call
Reverse the dollar's free fall and revive our global credibility. Warnings from China, France, Iran, Venezuela and supermodel Gisele haven't fazed Washington. Recession will.
3. Write-offs
Expose Wall Street's shadow-banking system. They're playing with $300 trillion in derivatives and still hiding over $100 billion of toxic off-balance sheet asset-backed securities, plus another $300 billion hidden worldwide. A lack of transparency is killing our international credibility. Write it all off, now!
4. Budgeting
Force fiscal restraint back into government. America has been living way beyond its means for years: A recession will cut back revenues at all levels of government and cutbacks will encourage balanced budgeting.
5. Overconfidence
A recession will wake up short-term investors playing the market. In bull markets traders ride the rising tide, gaining false confidence that they're financial geniuses. Downturns bruise egos but encourage rational long-term strategies.
6. Ratings
Rating agencies have massive conflicts of interest; they aren't doing their job. They're supposed to represent the investors, but favor Corporate America, which pays for the reports. Shake them up.
7. China
Trigger an internal recession in China. Make it realize America's not going into debt forever to finance China's domestic growth and military war machine. A recession will also slow recycling their reserves through sovereign funds to our equities.
8. Oil
Force the energy and auto industries to get serious about emission standards and reducing oil dependency.
9. Inflation
Expose the "core inflation" farce Washington uses to sugarcoat reality.
10. Moral hazard
Slow the Fed from cutting interest rates to bail out speculators.
11. War costs
Force Washington to get honest about how it's going to pay for our wars, other than supplemental bills that are worse than Enron-style debt financing.
12. CEO pay
Further expose CEO compensation that's now about five hundred times the salaries of workers, compared with about 40 times a generation ago.
13. Privatization
Stop the privatization of our federal government to no-bid contractors and high-priced mercenary armies fighting our wars.
14. Entitlements
Force Congress to get serious about the coming Social Security/Medicare disaster. With boomers now retiring, this problem can only get worse: A recession now could avoid a depression later.
15. Consumers
Yes, we're all living way beyond our means, piling up excessive credit-card debt, encouraged by government leaders who tell us "deficits don't matter." Recessions will pressure individuals to reduce spending and increase savings.
16. Regulation
Lobbyists have replaced regulation. Extreme theories of unrestrained free trade plus zero regulation just don't work; proven by our credit crisis, hedge funds' nondisclosures, private-equity taxation, rating agencies failures, junk home mortgages, and more. Get real, folks.
17. Sacrifice
"We have not seen a nationwide decline in housing like this since the Great Depression, says Wells Fargo CEO John Stumpf. As individuals and as a nation Americans have always performed best in crises, like the Depression or WWII, times when we're all asked to make sacrifices. Pampering us with interest-rate cuts and tax cuts during the Iraq and Afghan wars may have stimulated the economy temporarily, but they delayed the real damage of the '90s stock bubble while setting the stage for this new subprime/credit crisis.
Wake up, the train wrecked. Time to think positive, find solutions, demand sacrifices. End of Story
http://www.marketwatch.com/news/stor...ist=TNMostRead
11-21-2007, 05:22 PM
#2
Moderator Alumnus
I think #18 should be so that it would influence the 08 election and make some of the stark economic realities we face take a more important role in their debate.
11-26-2007, 05:40 PM
#4
I feel the need...
At the gates of hell
Banks and brokers are having a terrible time. Now the misery is spreading
http://www.economist.com/business/di...fsrc=nwlgafree
NAMING yourself after the three-headed dog that guards the gates to hell was, perhaps, asking for trouble. Cerberus, the private-equity beast in question, now finds itself at the centre of a fierce debate about whether corporate America is in for a hellish time, as the credit crisis spreads from financial services to the rest of the economy.
Only months ago Cerberus was praised as the saviour of the American car industry when it bought Chrysler from its German owner and struck a remarkable deal with the unions to cut jobs and benefits. But on November 20th it emerged that Cerberus's bankers had abandoned efforts to sell $4 billion of the debt it took on when it bought Chrysler. Investors turned up their noses even when offered a 3% discount.
Cerberus has also been hit by growing problems at GMAC, the financing arm of General Motors, in which it bought a 51% stake for $14 billion last year. GMAC reported a net loss of $1.6 billion for the third quarter, up from a loss of $173m in the same period last year.
More controversially, on November 14th Cerberus pulled out of a $4 billion deal to buy United Rentals, a power-tool rental firm. This provoked so much criticism that the famously secretive private-equity firm broke its vow of silence, telling the Wall Street Journal that the attacks on its credibility and integrity were “unfounded” and that it still has “more than $10 billion of available liquidity”.
What happens to private equity may be a leading indicator of how the crisis in the financial system will affect the rest of the business world, both because private-equity deals are so dependent on large amounts of debt, and because many of the shrewdest judges of corporate value work for private-equity funds. The number of new private-equity deals has plunged with the financial crisis, and nobody expects activity to pick up again soon. The collapse of deals suggests that the business climate has changed sharply.....
Only months ago Cerberus was praised as the saviour of the American car industry when it bought Chrysler from its German owner and struck a remarkable deal with the unions to cut jobs and benefits. But on November 20th it emerged that Cerberus's bankers had abandoned efforts to sell $4 billion of the debt it took on when it bought Chrysler. Investors turned up their noses even when offered a 3% discount.
Cerberus has also been hit by growing problems at GMAC, the financing arm of General Motors, in which it bought a 51% stake for $14 billion last year. GMAC reported a net loss of $1.6 billion for the third quarter, up from a loss of $173m in the same period last year.
More controversially, on November 14th Cerberus pulled out of a $4 billion deal to buy United Rentals, a power-tool rental firm. This provoked so much criticism that the famously secretive private-equity firm broke its vow of silence, telling the Wall Street Journal that the attacks on its credibility and integrity were “unfounded” and that it still has “more than $10 billion of available liquidity”.
What happens to private equity may be a leading indicator of how the crisis in the financial system will affect the rest of the business world, both because private-equity deals are so dependent on large amounts of debt, and because many of the shrewdest judges of corporate value work for private-equity funds. The number of new private-equity deals has plunged with the financial crisis, and nobody expects activity to pick up again soon. The collapse of deals suggests that the business climate has changed sharply.....
11-27-2007, 10:29 PM
#5
You want me to break it?
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Do we get to vote on this? 
I'd be for it if the assertions are valid. I'm not educated enough to judge that and sorry, when it comes to my money, I'm hesitant to trust the internet.
I'd be for it if the assertions are valid. I'm not educated enough to judge that and sorry, when it comes to my money, I'm hesitant to trust the internet.
11-29-2007, 04:40 PM
#6
I feel the need...
Consumers Can't Hang on Forever as Trouble Brews
Nov. 29 (Bloomberg) -- I wrote in this column in early 2002 that Time magazine erred in not naming U.S. consumers ``Person of the Year,'' in recognition of their impressive purchases of cars and houses in the 2001 recession.
The U.S. consumer has stayed remarkably resilient, even in the face of a recovery with declining family income. Now, however, many forecasters see them as they would Butch Cassidy and the Sundance Kid trying to escape from the Bolivian army: you may have a good run, but the forces you are about to face are overwhelming.
Richard Berner of Morgan Stanley called the combination of a softening job market, higher oil and food prices, rising mortgage costs, tighter lending standards, and falling home prices, a ``perfect storm'' for consumers.
And yet, the consumer is still firing away....
The U.S. consumer has stayed remarkably resilient, even in the face of a recovery with declining family income. Now, however, many forecasters see them as they would Butch Cassidy and the Sundance Kid trying to escape from the Bolivian army: you may have a good run, but the forces you are about to face are overwhelming.
Richard Berner of Morgan Stanley called the combination of a softening job market, higher oil and food prices, rising mortgage costs, tighter lending standards, and falling home prices, a ``perfect storm'' for consumers.
And yet, the consumer is still firing away....
11-29-2007, 04:48 PM
#7
I feel the need...
Dreaded `R' Word Starts Tripping Off the Tongue
Nov. 28 (Bloomberg) -- Everywhere you turn, recession is staring you in the face.
The Sunday New York Times featured a story on the prospects for recession on the front page of the Week in Review section. The following day, the Wall Street Journal ran a recession article on page one.
Across the pond, Harvard's Larry Summers made waves in a Nov. 26 Financial Times column, in which he said ``the odds now favor a U.S. recession.'' Newspapers in Europe and Asia are commenting on comments on recession.
Economists are scurrying to pencil in another reduction in the Federal Reserve's benchmark rate on Dec. 11 and to pare their expected target for next year, comments by policy makers notwithstanding.
Less than two weeks ago, Fed Governor Randall Kroszner was surprisingly blunt when he told an industry conference that ``the current stance of monetary policy should help the economy get through the rough patch during the next year.'' Data consistent with the slow growth he foresees won't suggest monetary policy is ``inappropriate,'' he said.
The message was about as clear as it gets when it comes to central bankers: No rate cut in December. Unfortunately, the market's outlook isn't aligned with the Fed's forecast.....
The Sunday New York Times featured a story on the prospects for recession on the front page of the Week in Review section. The following day, the Wall Street Journal ran a recession article on page one.
Across the pond, Harvard's Larry Summers made waves in a Nov. 26 Financial Times column, in which he said ``the odds now favor a U.S. recession.'' Newspapers in Europe and Asia are commenting on comments on recession.
Economists are scurrying to pencil in another reduction in the Federal Reserve's benchmark rate on Dec. 11 and to pare their expected target for next year, comments by policy makers notwithstanding.
Less than two weeks ago, Fed Governor Randall Kroszner was surprisingly blunt when he told an industry conference that ``the current stance of monetary policy should help the economy get through the rough patch during the next year.'' Data consistent with the slow growth he foresees won't suggest monetary policy is ``inappropriate,'' he said.
The message was about as clear as it gets when it comes to central bankers: No rate cut in December. Unfortunately, the market's outlook isn't aligned with the Fed's forecast.....
Batten down the hatches...
Trending Topics
12-04-2007, 06:30 PM
#8
I feel the need...
Credit crisis: Long road to recovery
It's six months into the credit crunch and investors are still shaken. Businesses and households should get ready to hunker down in '08.
http://money.cnn.com/2007/12/04/mark...ex.htm?cnn=yes
A new year, a new start. For the credit markets, that's wishful thinking.
Nearly six months since the credit crunch started, the situation is still grim - and there are few encouraging signs, which doesn't bode well for businesses and households next year.
Toxic debt keeps cropping up on bank balance sheets. The housing slump still hasn't found a bottom, and investors remain skittish. Market watchers expect the credit environment to remain challenging into the better part of 2008. That will take a toll on corporate profits and squeeze American consumers, not to mention put a drag on economic growth.
"We're pretty close to a point where the capital markets fail to function properly," said John Addeo, a high-yield fund manager at MFS Investments. "I believe the Fed has the ability and wherewithal to resolve that issue, but what we really need to see is a restoration of confidence in the financial system."
When the mortgage mess triggered a wave of turmoil in the summer, investors had hoped problems would remain relatively contained. Instead, they've seeped into all pockets of the debt market.....
Nearly six months since the credit crunch started, the situation is still grim - and there are few encouraging signs, which doesn't bode well for businesses and households next year.
Toxic debt keeps cropping up on bank balance sheets. The housing slump still hasn't found a bottom, and investors remain skittish. Market watchers expect the credit environment to remain challenging into the better part of 2008. That will take a toll on corporate profits and squeeze American consumers, not to mention put a drag on economic growth.
"We're pretty close to a point where the capital markets fail to function properly," said John Addeo, a high-yield fund manager at MFS Investments. "I believe the Fed has the ability and wherewithal to resolve that issue, but what we really need to see is a restoration of confidence in the financial system."
When the mortgage mess triggered a wave of turmoil in the summer, investors had hoped problems would remain relatively contained. Instead, they've seeped into all pockets of the debt market.....
12-10-2007, 04:47 PM
#9
I feel the need...
Bernanke May Risk `Fool in Shower' Label for Economy
Dec. 10 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke may have to risk becoming the proverbial ``fool in the shower'' to keep the U.S. economy out of recession.
Renewed turbulence in financial markets puts Bernanke, 53, under pressure to open the monetary spigots wider to pump up the economy. Traders in federal funds futures are betting it's a certainty the Fed will cut its benchmark interest rate from 4.5 percent tomorrow, and they see a better-than-even chance the rate will be 3.75 percent or below by April.
``The Fed has to assure the markets that it's ready to ride to the rescue and cut rates by as much as necessary,'' says Lyle Gramley, a former Fed governor who's now a senior economic adviser in Washington for the Stanford Group Co., a wealth- management firm.
The danger of such a strategy is that Bernanke may become like the bather, in an analogy attributed to the late Nobel- Prize-winning economist Milton Friedman, who gets scalded after turning the hot water all the way up in a chilly shower. The monetary-policy equivalent would be faster inflation or another asset bubble in the wake of aggressive Fed action to tackle the slowdown in the economy.....
Renewed turbulence in financial markets puts Bernanke, 53, under pressure to open the monetary spigots wider to pump up the economy. Traders in federal funds futures are betting it's a certainty the Fed will cut its benchmark interest rate from 4.5 percent tomorrow, and they see a better-than-even chance the rate will be 3.75 percent or below by April.
``The Fed has to assure the markets that it's ready to ride to the rescue and cut rates by as much as necessary,'' says Lyle Gramley, a former Fed governor who's now a senior economic adviser in Washington for the Stanford Group Co., a wealth- management firm.
The danger of such a strategy is that Bernanke may become like the bather, in an analogy attributed to the late Nobel- Prize-winning economist Milton Friedman, who gets scalded after turning the hot water all the way up in a chilly shower. The monetary-policy equivalent would be faster inflation or another asset bubble in the wake of aggressive Fed action to tackle the slowdown in the economy.....
12-11-2007, 01:51 PM
#11
The sizzle in the Steak
Commodities are on the rise.
12-11-2007, 02:42 PM
#12
Senior Moderator
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Originally Posted by Fibonacci
Banks and brokers are having a terrible time. Now the misery is spreading
http://www.economist.com/business/di...fsrc=nwlgafree
http://www.economist.com/business/di...fsrc=nwlgafree
My sister-in law's brother is married to the sister of Steve Feinberg. Met him a few times. You'd never know he runs one of the largest private equity investment firms in the USA.
12-23-2007, 07:35 PM
#13
I feel the need...
Amount of unpaid credit card bills is rising
Experts link increase that could threaten economy to housing crisis
http://www.msnbc.msn.com/id/22379989/
SAN FRANCISCO - Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come.
An Associated Press analysis of financial data from the country’s largest card issuers also found that the greatest rise was among accounts more than 90 days in arrears.
Experts say these signs of the deterioration of finances of many households are partly a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy.....
An Associated Press analysis of financial data from the country’s largest card issuers also found that the greatest rise was among accounts more than 90 days in arrears.
Experts say these signs of the deterioration of finances of many households are partly a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy.....
12-24-2007, 01:50 PM
#14
What is the probability that the U.S. economy will fall into a recession in 2008? We would answer, 65.5%. The bases for our answer are the Kasriel Recession Warning Indicator (the trademark-pending KRWI) and an econometric technique known as Probit modeling. ... Since the late 1960s, every recession ... has been immediately preceded by or accompanied by both of the KRWI variables in negative territory. The KRWI has not given a false qualitative signal – i.e., it has not predicted a recession when one did not occur. Aside from its impressive track record in identifying recessions, the KRWI has another attractive attribute – its variables are not subject to much, if any, revisions. For a theoretical explanation of the KRWI see, The Inverted Yield Curve - Is It Really Different This Time?.
http://web-xp2a-pws.ntrs.com/content...ent/us1207.pdf (link includes probability charts)
http://web-xp2a-pws.ntrs.com/content...ent/us1207.pdf (link includes probability charts)
10-31-2008, 07:24 PM
#15
I feel the need...
Putting the air back in
Staring at recession, policymakers in rich economies are considering how to avoid a prolonged slump. Here are some options—and some obstacles
http://www.economist.com/displayStor...fsrc=nwlgafree
DEBT is out; cash is in. Financial institutions are finding it hard to borrow from anyone but the state—and they are reluctant to lend to anyone else. Firms, aware that credit is drying up, are striving to raise cash. They have already run down their inventories and are trimming investment and jobs. Householders whose homes are worth less than their mortgages must save hard to reduce their debts. Those that cannot service their mortgages will default, causing more trouble for banks and, via lower house prices, other homeowners.
Just a few months ago, the main worry of policymakers in many economies was whether, as the prices of oil and other commodities shot up, they could contain inflation. But the flight from debt and the dash for cash, inelegantly called “deleveraging”, means a bludgeoning for demand. Now central banks and governments are facing a new set of questions. First, can they stop deleveraging from gaining momentum and wrecking their economies? And second, will the tools of conventional macroeconomic policy—cutting interest rates, lowering taxes and increasing public spending—be enough?
The standard response to a demand shock is to use monetary policy: cut interest rates and increase the money supply. Lower interest rates spur spending by making saving less rewarding. Banks able to borrow more cash at lower cost from the central bank will usually offer more and cheaper loans to firms and households, to pay for new equipment, buildings and consumer goods, or to cover running costs.....
Just a few months ago, the main worry of policymakers in many economies was whether, as the prices of oil and other commodities shot up, they could contain inflation. But the flight from debt and the dash for cash, inelegantly called “deleveraging”, means a bludgeoning for demand. Now central banks and governments are facing a new set of questions. First, can they stop deleveraging from gaining momentum and wrecking their economies? And second, will the tools of conventional macroeconomic policy—cutting interest rates, lowering taxes and increasing public spending—be enough?
The standard response to a demand shock is to use monetary policy: cut interest rates and increase the money supply. Lower interest rates spur spending by making saving less rewarding. Banks able to borrow more cash at lower cost from the central bank will usually offer more and cheaper loans to firms and households, to pay for new equipment, buildings and consumer goods, or to cover running costs.....
11-12-2008, 04:45 PM
#16
I feel the need...
U.S. Slump May Be Longest in Decades as Growth Fell Off `Cliff'
The U.S. downturn will be the longest in three decades, and the drought in consumer spending may be the worst ever, according to economists surveyed by Bloomberg News.
The implosion of credit markets last month will cause the economy to shrink at a 3 percent annual rate in the fourth quarter and decline at a 1.5 percent pace in the first three months of 2009, according to the median estimate of 59 economists surveyed Nov. 3 to Nov. 11. Following last quarter's 0.3 percent drop, the slump would be the longest since 1974-75.
``The economy fell off a cliff in October,'' said Richard Berner, co-head of global economics at Morgan Stanley in New York. ``We had a huge financial shock that intensified the credit crunch and triggered a sharp downturn.''
Declines in household spending will extend into next year as the worst financial crisis in seven decades forces employers to keep cutting payrolls on top of the 1.2 million jobs already lost this year. President-elect Barack Obama has said the U.S. needs a second economic stimulus package ``sooner rather than later.''
The pace of contraction this quarter would be the worst since 1990. Berner is among economists projecting the current slump will also be the most serious in a quarter century as the lack of credit causes a reinforcing, vicious circle of declines in confidence, spending and hiring.....
The implosion of credit markets last month will cause the economy to shrink at a 3 percent annual rate in the fourth quarter and decline at a 1.5 percent pace in the first three months of 2009, according to the median estimate of 59 economists surveyed Nov. 3 to Nov. 11. Following last quarter's 0.3 percent drop, the slump would be the longest since 1974-75.
``The economy fell off a cliff in October,'' said Richard Berner, co-head of global economics at Morgan Stanley in New York. ``We had a huge financial shock that intensified the credit crunch and triggered a sharp downturn.''
Declines in household spending will extend into next year as the worst financial crisis in seven decades forces employers to keep cutting payrolls on top of the 1.2 million jobs already lost this year. President-elect Barack Obama has said the U.S. needs a second economic stimulus package ``sooner rather than later.''
The pace of contraction this quarter would be the worst since 1990. Berner is among economists projecting the current slump will also be the most serious in a quarter century as the lack of credit causes a reinforcing, vicious circle of declines in confidence, spending and hiring.....
04-22-2010, 07:39 PM
#17
I feel the need...
Honey, I Lost the House. Now It’s Time to Party
“What a relief, Marge, not to have that huge mortgage payment hanging over our head anymore.”
“You can say that again, Harry. Let’s celebrate. Maybe take a nice vacation. Or buy a new car.”
“What if the bank forecloses on our house? We could be living on the street next year.”
“Exactly. Which is why we need a new car. Maybe something roomy like a Chevy Suburban.”
By now you’ve probably seen the analysis, if you can call it that, on how mortgage defaults are driving consumer spending.
Yes, you read that correctly. Those deadbeat homeowners, facing possible eviction and in some cases unemployed, are throwing caution to the wind -- and money at retailers.....
“You can say that again, Harry. Let’s celebrate. Maybe take a nice vacation. Or buy a new car.”
“What if the bank forecloses on our house? We could be living on the street next year.”
“Exactly. Which is why we need a new car. Maybe something roomy like a Chevy Suburban.”
By now you’ve probably seen the analysis, if you can call it that, on how mortgage defaults are driving consumer spending.
Yes, you read that correctly. Those deadbeat homeowners, facing possible eviction and in some cases unemployed, are throwing caution to the wind -- and money at retailers.....
Slump is over, party time!
04-23-2010, 08:50 AM
#19
Team Owner
04-23-2010, 02:20 PM
#20
# 4 and 16 just aren't going to happen.
Basically the U.S. is a nation of spoiled brats at this point who want everything cheap and fast, and the sleaze-baggy polititians all know it's political suicide to take baby's bottle away (through tougher fiscal policy and balanced budgets), and in reality they all care far more about their own political careers/weath than promoting benevolent stewardship of the country.
Country goes BK at some point, or enough people come to their senses and become fiscally responsible by their own devices, but I don't think that's going to happen.
Basically the U.S. is a nation of spoiled brats at this point who want everything cheap and fast, and the sleaze-baggy polititians all know it's political suicide to take baby's bottle away (through tougher fiscal policy and balanced budgets), and in reality they all care far more about their own political careers/weath than promoting benevolent stewardship of the country.
Country goes BK at some point, or enough people come to their senses and become fiscally responsible by their own devices, but I don't think that's going to happen.
04-23-2010, 03:29 PM
#21
Карты убийцы
Now could our fiat money suffer from hyperinflation... yes. Could nations lose faith in the greenback and decide not to buy our dollars... yes. But bankruptcy in the sense applied to individuals and companies does not apply to the Fed.
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