Discussion:Bad News: US Growth Bleak

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CrowJD (talk|edits) said:

4 January 2010
Good news: but it will be bleak just for the next decade or so.

http://www.reuters.com/article/idUSTRE6021LK20100103?feedType=RSS&feedName=domesticNews

And, from Paul Krugman:

"There can’t be a new housing boom while the nation is still strewn with vacant houses and apartments left behind by the previous boom, and consumers — who are $11 trillion poorer than they were before the housing bust — are in no position to return to the buy-now-save-never habits of yore."

http://www.nytimes.com/2010/01/04/opinion/04krugman.html

P.S. I wonder where that 11 trillion went? I think I know. I wonder if it will ever trickle down? D'oh!

Natalie (talk|edits) said:

January 6, 2010
Crow, I'm not even going to read these articles. In fact, I'm thinking of deleting the whole discussion.

Matrix8 (talk|edits) said:

6 January 2010
Booms come and go. Favored asset classes tend to shift around as the investing public's imagination and speculative appetite seeks newer pastures. 1980s was junk bonds. Early 90s was biotech and real estate. Late 90s was internet. Mid 2000s was real estate. What's next? Some say non-real estate hard assets like gold and soybeans. There could be another mini-bust in real estate if interest rates jump higher. However bad it is here, it is much worse in most parts of the world.

CrowJD (talk|edits) said:

6 January 2010
1980 was when Ronald Reagan got in there and began cleaning things up with his trickle down. He made unregulated greed our national motto. In greed and a quick buck we trust. Is it any surprise that gambling in all forms has taken off like wildfire?

Well, the Reagan gang "cleaned" things up allright; and since then, every time we have one of these gimmick booms go bust, the top 1% clean out the pockets of the rest of us. This money does not just "disappear", and it sure doesn't trickle down.

Our economy seems to exist now NOT for the good of all, but to manufacture bubbles from which to extract trillions from the middle class and send it upwards. It is not a balanced, healthy economy. It's a gimmick, rip-off economy. It's in the control of the lobbyists on K Street, and the moderate democrats are right in there with the elephants feeding at the trough.

Meanwhile, the politicians have fooled the public into thinking that they are really fighting about abortion, prayer in school, guns, and gays; when in truth, that's entertainment (bread and circuses) to keep the ignorant masses fired up and occupied, while in the meantime, the politicians crack the national safe and run off with the money along with their corrupt friends.


Here's an interesting article about whether the Fed. may be creating yet another bubble, a stock market bubble: http://articles.moneycentral.msn.com/Investing/top-stocks/default.aspx?feat=1528464

Pent-Up (talk|edits) said:

6 January 2010
Homes were over-priced, so what, now their more affordable.

Good for those looking to snatch up a bargain.

CrowJD (talk|edits) said:

6 January 2010
No, that's not how the gimmick economy works. Real estate was yesterday's gimmick. We're on to the next gimmick now Pent-up.

You'd have to wait until real estate got REALLY, REALLY low now to buy some. Keep in mind, the government is artificially propping up the real estate market now (first time homebuyer credit, etc).

Also, keep in mind, it will be a lot harder to get a mortgage going forward, so this takes the liquidity out of the real estate market. And it's liquidity that makes prices go up i.e. excess liquidity creates bubbles.

It will be much harder to make money in real estate going forward.

Matrix8 (talk|edits) said:

6 January 2010
Gimmick Economy, very nice description, CrowJD. If the 70s and 80s serves as an analogy, real estate will be stagnant in the next number of years. While inflationary forces support real estate, higher interest rates and mortgage payments will undermine it, resulting in a net flat movement from these two opposing forces colliding against each other. When people have forgotten about real estate, and interest rates have peaked into the double digits, then you should start thinking about real estate when you see interest rates and inflation coming down. Especially if you see rental yields go into the higher single digits and people are not buying real estate for capital appreciation anymore.

CrowJD (talk|edits) said:

6 January 2010
Matrix, I am beginning to think we have a "planned" economy like the Soviet's did, except we put the American spin on it.

The Wall Streeters, the Big Bankers and the Corporate Welfare Queens sit around and PLAN how they are going to rip off the public, then they execute the plan, more money flows out of the middle class, and the government serves as enabler for the crooks.

I am not sure that standard economic theory applies anymore in our lawless country.

Take a look at that Money Central article I posted up there. It shows just how involved the Fed. is with all this.

NMexEA (talk|edits) said:

6 January 2010
Crow, that $11 trillion went the same place your lap goes when you stand up. That's the thing about money that us un-moneyed people, a.k.a. the Great Unwashed a.k.a. Victims a.k.a. Taxpayers a.k.a. the Little People often don't understand. Banksters, a.k.a. Masters of the Universe, conspire to create VAST amounts of money in the normal course of fractional deposit banking (in all of its various guises, regulated and otherwise) but the exact same process that creates all that money (and the not entirely false prosperity that goes with it) works just as well, and MUCH faster, in reverse.

That's why, GOP claims to the contrary, there is essentially ZERO possibility of serious inflation in the next ten years. A far greater danger is serious DEflation which I think has already taken hold. Japan lost a solid decade to deflation (so far). Housing prices fell off a cliff. Even more ominously, wages are now falling, both among those still employed and among those now un- or under-employed. These things stifle demand and that is the familiar vicious cycle. The only method we've yet identified for ending a deflationary spiral is a world war. Homebuyer credits and cash for clunkers are just blips in the face of that evaporated $11 trillion.

And having a record level of preexisting federal debt coupled with irresponsible and unnecessary tax cuts, thanks to Pres. Reagan and the two Bushes ("Deficits don't matter!") doesn't help. First, owing so much tends to tie the government's hands. Second, and this is seriously open to debate but not as far as I am concerned, the distribution of wealth in this country hasn't been so seriously lopsided since 1929. Even Herbert Hoover finally admitted such a seriously unequal distribution contributed to the Great Depression, or, as I'm calling it, GD One.

Death&Taxes (talk|edits) said:

7 January 2010
There are times I think Joseph Goebbels is alive and doing well pushing narratives that sound so deceptively true but on examination are mostly false. This from USA Today:

"Opponents, however, argue that the estate tax amounts to double taxation, first when the money is earned and again when it is transferred to heirs."

If this is true, then just what is the 'stepped up basis' that we always mention; could it be paper capital gains that have never been taxed?

Such arguments are pure Goebbels.....and when repeated often enough are taken up by people who should know better.

CrowJD (talk|edits) said:

7 January 2010
Here's a little straight shooting today from Nobel economist Joe Stiglitz on Bloomberg:

http://www.bloomberg.com/avp/avp.htm?N=av&T=Stiglitz%20Says%20%60Wall%20Street%20Is%20Talking%20Up%20The%20Recovery'&clipSRC=mms://media2.bloomberg.com/cache/vuUrlC9airDI.asf

Hope the link works.

Aunt Emmy (talk|edits) said:

8 January 2010
Honey, iffen its straight shootin you wants heres some. The US aint goin nowhere but down unless them you-yuns git busted and the EPA is dumped. Not a smart move to do business in the US. Labor costs too much fer what you git. Regalations too many. Them is the two biggest job killers and them real good jobs that any good worker used to be able to find just aint there and aint been there for a long time. No more good blue collar work for nobody anymore. No more good skilled tradesmen around here anymore. There aint no greater evil than trickin the stupid and stealin from the pore. We all gonna be pore folks pretty soon but we aint all as dumb as we look. Rather be pore and free than pore and shackled to some forced life by a buncha misguided elitist natterin nabobs. We gonna be pore anyway. We might as well be left wif our pride at least.

Take the foolishness pounded into our younguns at the dam public schools and they has succeeded in makin a whole generation into whinin graspin beggars with a hand out to the guvmint fer everthang. Buncha weak fools with no backbone cryin about society bein a bad place and them evil capitalists never give no one a good break and somebuddy gots a lot more and we dont think they deserves that much and we wants some of theirs for our own and we is so small and helpless and we needs big guvmints to take it away from them evildoers who is out there makin too much money and gives it to us since we is too stupid and weak to make some fer ourseffs oh boohoohoo. And we makes a lot of money but we dont make enough to beat world poverty and thats what we wants to do and they dont wanna play our game so we needs the big guvmint to take theys money away and spend it on our game instead of let them play theys own game wif theys own money. Oh boohoohoo it aint fair it aint fair.


Aunt Emmy has been away dryin out and hopes you chilluns has been well.

Smokeytax (talk|edits) said:

12 January 2010
AUNT EMMY!!

WELCOME BACK!!!!

You're a breathe of fresh air. I don't exactly know what you're saying, but I love the way you say it.

Kevinh5 (talk|edits) said:

12 January 2010
'dryin out'? Your picture looked like you were already kin to a raisin, Emmy. How much more dryin did you need? Or was it the corn squeezins they needed to wring out of you? I've been known to enjoy a pint or two myself.

Kevinh5 (talk|edits) said:

12 January 2010
Smokey, my father grew up on a farm. Whenever we drove through farm country, he'd roll down the windows and yell 'smell that fresh air' which normally meant we were driving by a hogpen or cow field. How anyone could think that manure smelled like a breath of fresh air I don't know.

Smokeytax (talk|edits) said:

13 January 2010
Kevinh5 - That's a hoot. I'm definitely going to change the way I describe things that are unique and surprising.

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