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Topic: Economy
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| UGoGirl | Posted – 4/11/2007 12:18:35 PM | show profile Looks like the economy is starting to go into free-fall. The housing boom is busting (for example, the value of my house has dropped by about $65K in the last 4 or so months), gas prices are going up as they should, as it looks like we may see shortages this summer, and more companies are announcing layoffs. But, the rich will keep getting richer so no worries from that gang. It's us "little people" who will suffer. |
| Printingman | Posted – 4/11/2007 10:12:32 PM | show profile | email poster Sorry about your house Ugo but my new condo increased in value 5% over the past 6 months. Expecting to double in the next 5 years. I don't see any indicators of a real recession. I guess its a NYC thing or more specifically an outer borough (Brooklyn and Queens) thing |
| hank | Posted – 4/11/2007 10:56:53 PM | show profile ""Looks like the economy is starting to go into free-fall. "" For the 7th year in a row? |
| mailbag | Posted – 4/12/2007 8:29:01 PM | show profile | email poster Personally I do not see a problem with the housing market... the reason is only because housing rose above and beyond what it should have. There really was no reason except for greed... hint real estate agents. They talked people into higher prices, the higher prices caused people to panic and buy, and suddenly the USA became the most expensive place in the world. I don't feel sorry for the fool who dumped $3M on a 2 bd house or condo two years ago. That was their gamble. It is overvalued at $2M, $1M, and maybe $750k too. Since our GDP is tied to consumer spendig that is the measure to watch. April looks to be one of the worst growth months for consumer spending in a long time. If we have a year of that - indeed watch out on the Dow. I predict though the market will stay about where it is for the year after so much profit taking by the rich. |
| UGoGirl | Posted – 4/15/2007 9:47:19 PM | show profile Pman, well don't feel too sorry for me for the recent $65K loss in value of our house. It's still gone up by about $225K since we bought it 7 or so years ago, and anyway we're not planning on moving anytime soon. I know you all think I'm crazy, but our economy is such a house of cards... |
| mailbag | Posted – 4/15/2007 10:30:43 PM | show profile | email poster crazy I don't think you are crazy Ugo. I do think it is crazy to live beyond one's means. I think it is crazy for 20 and 30 somethings to buy a house. (No matter what right now because they WILL be laid off before 50 and take a huge cut in pay on a new job and have to sell -- likely at a loss.) I think credit cards and banks are crazy and those who use that credit for material goods are crazier. And I think the gov't is crazy (since Clinton and NAFTA) for openly allowing outsourcing of jobs without a plan (emphasis on without) to begin innovation first in order to shift jobs into new areas at home. We live in a very selfish country at ever level. Unless this changes there is no hope. So, sit back, be selfish yourself and hoard as much cash as you can because when we retire Ugo we'll need it. And our peers will be envious of our lifestyle -- yours in the USA and mine in the EU. Tough shit on them for being stupid and crazy now. |
| beenthere | Posted – 4/16/2007 12:07:19 PM | show profile The housing market is tanking. The Times had an article about a week ago that renting is now a better option than buying because prices are falling and homebuyers looking to flip within five years will lose money. In SoFla, where I live, there has been riduculous overdevelopment. The market is glutted with unoccupied condos, property taxes are exorbitant and add in the increased hurricane insurance from the last few years . . . nothing is moving. Those trying to downsize are finding that too expensive. My rent has increased 30% in the last 2 1/2 years (there are no tenant protective laws in FL). My boyfriend is actually hoping for an active hurricane season to drive house prices down even more. He wants to buy next year although I'm trying to sway him against it. |
| j.hodl | Posted – 4/16/2007 12:34:07 PM | show profile Housing Market Of course the housing market is in decline. What better evidence than when walking through one's surrounding neighborhood to discover that the most popular sign on homes-for-sale is "Price Reduction." But the housing bubble will fizz down even faster as other economic factors fully kick in. One major reason is that a lot of families that shouldn't have been granted home loans got them, and such loans were structured so one covered only interest on the loan during the early years with actual payoff of the loan kicking in later when the family would have a higher income. Current defaults of such loans are occurring among families where working members did have good jobs but have since lost them to downsizing and outsourcing, and find new jobs paying even lower wages. Couple with that the deregulation of electric and gas utilities that opposite of what was promised are resulting in skyrocketing energy prices. Coupled with rising gasoline and grocery prices (food prices are up primarily due to the other hikes raising the cost of transportation and store overhead). Its a vicious spiral, not unlike what occurred during the Great Depression. And yes, after the worst hits the fan, there will be extreme bargains in houses. You just have to get through the interim misery and ramen soup dinners. |
| UGoGirl | Posted – 4/17/2007 9:46:21 AM | show profile I agree, anyone who buys a house now is crazy. Wait a year or two and you'll have your pick (of course if you have to sell your own house, it's value will go down too). Besides housing, here are a few reasons why our economy is a house of cards: - We import about 66% of our oil, and this percentage will increase. (And we also import natural gas.). -Debt debt debt debt debt... not since the Great Depression have Americans been saving at such a low rate. In fact we're not saving at all. -Incomes for low-income and middle-class families are most definitely not keeping up with costs. -People can't count on stock market increases for their 401 Ks to retire... -We're passing down all our federal debt to the next generation. -As the baby boomers are starting to retire, in 20 or so years they will use up 100% of the federal budget for SS and medicare. That means no federal money for defense, education, transportation, health, research, space travel, etc. -The dollar is falling as other countries realize our position of dominance and stability is over. -We don't produce anything real anymore, as all of our manufacturing jobs,etc. have been shipped overseas. -Climate change and impacts to infrastructure, food, etc. How many New Orleans will we be asked to rebuild? And that's my cheery assessment of the state of the economy today. |
| ZeldaMedia | Posted – 4/17/2007 5:30:53 PM | show profile What scares me I feel like the majority of people are living in oblivion when it comes to realizing that our economy sucks. I was driving down Mass. Ave. in Massachusetts yesterday and was counting how may enormous "FOR LEASE" banners are draped over commercial buildings and have been there for months. How can anyone with eyes not realize that this means that our economy is going to plummet in a very personal catch all way soon? Even with gas prices rising again I still see people buzzing around in their BMWs, Mercedes, Audis, Lincoln Town Cars with their back seats stuffed with bags from Target and other such retail kings of outsourced Chinese produced crap products that don't last. These stupid idiots' lifestyles will be my burden to pay eventually. The trickle down theory has another side to it that will whoop my ass and pocket. I am scared and I am furious at their oblivious obnoxious spending, mass market thinking. It makes me sick. |
| ZeldaMedia | Posted – 4/17/2007 5:31:27 PM | show profile What scares me I feel like the majority of people are living in oblivion when it comes to realizing that our economy sucks. I was driving down Mass. Ave. in Massachusetts yesterday and was counting how may enormous "FOR LEASE" banners are draped over commercial buildings and have been there for months. How can anyone with eyes not realize that this means that our economy is going to plummet in a very personal catch all way soon? Even with gas prices rising again I still see people buzzing around in their BMWs, Mercedes, Audis, Lincoln Town Cars with their back seats stuffed with bags from Target and other such retail kings of outsourced Chinese produced crap products that don't last. These stupid idiots' lifestyles will be my burden to pay eventually. The trickle down theory has another side to it that will whoop my ass and pocket. I am scared and I am furious at their oblivious obnoxious spending, mass market thinking. It makes me sick. |
| questoo1 | Posted – 4/20/2007 5:39:43 PM | show profile Stocks surge, Dow closes near 13,000 It falling, its falling!Why is it my home has appreciated about 90%, my stocks are killing it yet you love to see the doom and gloom. Maybe you've chosen the wrong profession or have not done any wise investing or planning, but it ain't all that bad. You can read whatever #'s and statistics you want and its just that. Im pretty sure you're upset you were not around during the depression so you could have said "look I told you so" |
| mailbag | Posted – 4/20/2007 10:17:26 PM | show profile | email poster questo I don't think that is fair questoo. I agree with Ugo on some scale and I do follow the economy for a living. Got me though on the 13,000 Dow - it makes no sense as far as the 'average' workerbee is concerned. To the Trumps of the world, and all the 20-something millionaires in this country it does make sense. I call it "funny money." That is exactly what our grandparents call the British Pound in WWII - funny money. The joke is on us though now, because the pound buys $2. Does that make you feel good? Mr China man and his yaun will buy your house, your business, and your state in 20 years with the spare change he has in his pants pocket. That is a problem this country refuses to recognize. Enjoy your 13000 Dow now. It is means nothing. |
| UGoGirl | Posted – 4/20/2007 10:27:03 PM | show profile It makes no sense... the dollar is falling because the economy is slowing down. I guess just another freakazoid way for the rich to get richer. But it won't last. |
| keltoi | Posted – 4/20/2007 10:50:09 PM | show profile The past 6 years has been a Republican war on the average American, nothing less. Three million factory jobs have disappeared since 2000, CEO pay is now around 500 times the average worker in the company (compared to about 50 times or less in Europe), the percentage of American income in the hands of the top 2% is the highest it's been since the 1920s, and the tax giveaways of the past 6 years have funneled roughly one TRILLION dollars to the top brackets. And that's not counting the hundreds of billions disappearing into God knows whose pockets in the name of "The War on Terruh". |
| questoo1 | Posted – 4/21/2007 11:39:08 AM | show profile my guess is that you work in a business that is on the decline and have just not "changed with the times" as it were. Is the economy different now? Of course. This is no longer a wage worker economy. There are plenty of opportunities out there. I'm wondering what your idealistic view of this "average american" is? Is it a factory worker? Is it someone who pushes paper for a living with their 3.2 kids? Is it the recent immigrant? |
| mailbag | Posted – 4/21/2007 2:19:39 PM | show profile | email poster pure white trash is the new average "questoo1... There are plenty of opportunities out there. I'm wondering what your idealistic view of this "average american" is? Is it a factory worker? Is it someone who pushes paper for a living with their 3.2 kids? Is it the recent immigrant?" I don't know if you asked someone specific, but will give my 2-cents. Point No.1 - true. There are plenty of opps in contract corporate labor. They are called consultants. You get $100k a year flat fee. You handle your medical insurance at $400 a month, and your taxes and SS and Medicare payments on your own. So, that $100k turns into $50k quickly. But as you are contract, you have zero job stability. And... since there are so many opportunists moving this route after being laid off that contract job will go out to bid each year. You might get it if you come down in price during year No.2 to $85k. No way to move up unless you take on two full time contract labor jobs (that is 80hrs + a week vs 40.) Question on average citizen (USA citizen not american.) I do not think there is one any longer because we've grown more divided than ever before. (Some call it diverse.) I'd like to know how immigrants --esp those who work off the books-- could afford a $300K house loan two years ago in Los Angeles' boom. Now those loans are collapsing. I can't afford a $200k loan and yet I have a stable job/career and pay taxes. How is it that in NYC sellers can't keep a $3 million condo on the market? Who are these average people buying up multi-million pads? Where did they get the money? (Read in the NYT the average age is UNDER 40.) What about those (roughly) 20% of high school drop outs... maybe they are average. They seem to be doing all right with their baggy pants, iPods, cock-eyed cap, and no direction in life and no worries. What about the dirty little secret from hospitals today that are being overwhelmed by meth addicts? Maybe those folks are average. Maybe whatzerface - dead girl, ex playgirl, diet guru, was average. Can't recall her name now, but iconizing pure white trash could very well be our new average in the USA. Gotta a pure white trash president too. |
| UGoGirl | Posted – 4/21/2007 2:43:09 PM | show profile Quest: "my guess is that you work in a business that is on the decline and have just not "changed with the times" as it were. " Quest, let's just say you're completely wrong. I am lucky enough to work in a sector that can't easily be outsourced, business is booming and the future looks bright in my own line of work. This doesn't mean we, collectively, aren't heading for very hard times (even if I personally am not). I am not personally having economic problems, but plenty of people are and will be. My point is that people should be able to work full-time, AND have health insurance, AND be able to send their kids to college (not necessarily an expensive private college but something). If a family has two workers working full-time but still can't make ends meet (despite living very frugally) there's something wrong. |
| questoo1 | Posted – 4/21/2007 5:56:58 PM | show profile Why should they? My parents both had to work their way through school and pay for their own health insurance as their parents did as well. I was fortunate to have my health insurance covered, but I also paid my way through school. So just not seeing it. |
| j.hodl | Posted – 4/21/2007 6:53:07 PM | show profile Apparently questo hasn't been watching the market too closely. I've had part of my retirement account in stocks sice 1998. In 2001-2003, my portfolio dipped 30 percent. But I was in relatively conservative stocks. A friend who invested in risky stocks took a bath. He took a week's vacation to Cancun in April 2000. When he left, his investment in Internet stocks was valued at $63,000. When he returned, they were worth $11,000. Maybe if he didn't think $1 a minute was too much to use a computer at that Internet cafe. And check you house value. In most parts of the country, house prices are dropping because there is too much housing on the market and not enough buyers. Its the old supply and demand. When I thought I was getting a job in Long Beach back in 1997, I was surprised at how low the prices were on vacant houses and condos. Then I found that because of some military base and factory closures nearby, a lot of previously employed people defaulted, and the banks were trying to unload them. But because there were too much other housing available (families moving to new jobs elsewhere), they couldn't ask much. Don't think you are getting ahead just because of inflation. I remember some of my Mom's friends cheering that they were getting interest rates of 12 to 14 percent on special CDs at a time of high inflation (it peaked in late 1981 at over 21 percent). Of course, house and car loans were greater than 14 percent, but they weren't buying. They though it was Reagan's doing and he was a hero to them. Then the Fed brought inflation under control. Suddenly, those same CDs rolled over were earning only 4.5 percent, and these same people blamed Reagan for the lower returns and called him a bum. And don't get too pleased with the Stock Market hitting 13,000. What goes up usually goes down. And just a month ago, a single action by the government of China had stocks round the world dropping faster than they are currently rising for a week. So keep your eyes open. Watch the news. And keep in touch with broker. Up to a point. Groucho Marx said the only sound stock tip he ever got was from the wardrobe woman at the Oriental Theater in Chicago. |
| UGoGirl | Posted – 4/21/2007 7:00:58 PM | show profile yeah yeah yeah, and I worked and took out loans too. I'm no hero and neither are you. Anyhoo back to the subject. We're in debt way over our heads, the dollar is falling, and America is going up for sale. Guess who will be buying off chunks of America? How about top oil and natural gas exporters for starters... Russia, middle east, etc. **** ...Robert Brown, the chief investment officer at Genworth Financial Asset Management, contends that Americans will eventually need to call on those same attributes if the U.S. dollar continues to fall as he and many other analysts expect. ?The forces are so clear cut, so self-reinforcing,? he said of the decline. ?Nobody can figure out the timing.? While the economic shift would likely draw out some winners in the U.S. economy, such as companies that sell goods and services overseas, it would also likely sharply reduce America?s purchasing power and cause seismic shifts in some sectors of the economy. ... The dollar?s decline has taken place over a period of years, but more recent pullbacks have tested historical benchmarks. The dollar, which began to weaken broadly in early 2002, has fallen more than 50 percent from its October 2000 trading peak against the euro. It has recently come close to hitting its record low against the 13-nation currency and is near a 26-year low against the British pound. ?Over the long term, having your currency fall 50 percent is another force for change in the economy and that will create social pain. There are slices of the economy that will have to get restructured, that will have to go away. They?ll have to get replaced with other ones,? Brown said. ... Cheaper prices for U.S. assets could even help portions of the struggling housing market, said Quincy Krosby, the chief investment strategist at The Hartford. ?I think this is going to accelerate foreign purchases of U.S. property,? she said. European buyers, she said, could, buy second homes in the United States in not only bustling cities but also, for example, near golf resorts. ...while some sectors of the economy might benefit from a flagging dollar, many observers expect the longer-term ramifications will pose difficulties for the U.S. economy. ?If you want to take over companies or if you want to expand, it makes it harder,? said Merk, adding that U.S. assets become less-expensive targets. ?You can?t defend yourself. Your currency is worth less in an international arena, and we?re in a globalized world. You?re going to be up for sale. All U.S. assets are up for sale,? he said. Although analysts might disagree on how widespread some pain will be as the dollar slips, all agree no one would benefit from a crash. AP, Weaker Dollar altering economy |
| mailbag | Posted – 4/21/2007 8:11:08 PM | show profile | email poster There are econ reasons for the euro growing into such a strong currency at a baseline. The best reason is little debt and an emerging powerhouse, stable economy. I can't prove this of course, but my hunch is that the wealthy folks in this country did heavy bidding on the euro in 2002. If you had $100 million sitting around - which all the right people do (those who supported Bush primarily) have made a killing in Europe. They don't care what happens to the dollar. If I calculated correctly, that $100mil is now $156 mil without doing a damn thing. This is their money they can do what they please using their ATM card. I think the new dollar rich folks - aka those who drop cash on $3 million condos in NYC - are involved with hedge funds. Some of those have grown so fast - again it does not matter what happens to the dollar in their view. What is the breaking point? I've said before that even the fed won't let the dollar drop "too low" although none of us dust bunnies know what "too low" is. Another problem is this nation's debt. For without our current debt both by fed standards and personal standards (average consumer has been living in the red for 23 months) there could be no real concern. You put this on a micro level (meaning to your own household) and you find ways to get by no matter what as long as you do NOT have debt. With debt that 'middle' income group pays more for their goods, digs deeper to balance inflation, and unless their pay checks can increase as fast - they fall further behind. Throw in layoff, illness, family crisis... the only savior is a good inheritance. |
| mailbag | Posted – 4/21/2007 8:20:50 PM | show profile | email poster pt 2 - scams I also think this story is a taste of what is to come. The only reason it caught my eye is -- my credit card company just sent me a new card (diff number) and said it could not tell me why they switched, but that a number of Citi's card holders had been breached. Hmmm thought I... nothing unusual has happened on my card in years. Now I wonder if this was not the cause: http://www.cnn.com/2007/US/04/21/new.york.identity.theft.ap/index.html Second point - why would these guys steal customer cards to make money - if they really didn't need money? I believe we are basically honest by nature. Had these 13 men been earning enough to get by.... would they have avoided such a scam? Now I want to know where these guys worked. Will have to check with PACER. :) |
| LotusBlossom | Posted – 4/22/2007 9:59:36 AM | show profile American Consumer I was at a conference last week where an economist for a major US investment bank was speaking. He is known as a perma-bear, but still I think his points were compelling. He said there is one (1) factor in the global economy, and it's the American consumer; We are the buyer and the rest of the world are sellers. And to finance what has really been a seven-year splurge, we're using our houses like ATM cards to buy more stuff, refinancing away. The housing downturn, and the subprime defaults that are strengthening it, are ominous portents. But strong consumer confidence, which is a perception, can trump many dismal realities. He said to look closely at the guy next to you on the subway: He's the one determining your economic future. |
| mailbag | Posted – 4/22/2007 3:07:24 PM | show profile | email poster "LotusBlossom ...He said to look closely at the guy next to you on the subway: He's the one determining your economic future." Now - I've very worried. ugh. Just rode the subway - not a pretty picture. |
