Our country suffered through economic depressions in the 1780s, 1840s, 1870s, and 1930s. We have not had another one in the last roughly 70 years. Are we due?
The Great Depression of the 1780s is interesting, btw, because it led to the overturning of the Confederation, and the powers-that-be had to call George Washington back into service because we were on the verge of a communist revolution (not kidding!). Only someone of his stature could restore order.
The Great Depression of the 1930s finalized the heavy hand of government in our economy. What’s next?
[quote]Zap Branigan wrote:
Do you start a new thread on this topic every day or does it just seem so?[/quote]
Only on days that contain the letter ‘r’.
I’m interested in your take, Zap — what’s the difference between now and yesterday? Have we somehow created a system that’s immune to a collapse? The fed, for ex, was created to blanket the country with money in case of a downturn. Is that game over or no?
[quote]Headhunter wrote:
Zap Branigan wrote:
Do you start a new thread on this topic every day or does it just seem so?
Only on days that contain the letter ‘r’.
I’m interested in your take, Zap — what’s the difference between now and yesterday? Have we somehow created a system that’s immune to a collapse? The fed, for ex, was created to blanket the country with money in case of a downturn. Is that game over or no?
[/quote]
We are into a recession and it will last a little while but we are too strong to have problems like we did in the Great Depression.
I think people will be buying fewer BMWs and living in mansions they cannot afford.
I think the American economy has way too much inertia for this current situation to be anything more than a blip.
In the end,solid citizens,such as the the two of you,will continue to pay your debts,borrow money judiciously(I hope),and over a period of time,it’s that kind of behaviour that will make the current situation a memory.
Capitalism,is at the end of the day,also a system where the good behaviour of the many,makes up for the dodgy behaviour of a few.
A bit like Socialism…
A friend of mine, a Japanese, was recently in Tokyo. She says she saw homeless people in the train station, something she’s never seen before (she said).
The Japanese learned in the 90s that it doesn’t help to have low interest rates, if no one will borrow. You can’t force people to borrow.
America runs on credit. Have we reached a point where no one (or few) will borrow?
[quote]Headhunter wrote:
A friend of mine, a Japanese, was recently in Tokyo. She says she saw homeless people in the train station, something she’s never seen before (she said).
The Japanese learned in the 90s that it doesn’t help to have low interest rates, if no one will borrow. You can’t force people to borrow.
America runs on credit. Have we reached a point where no one (or few) will borrow?[/quote]
I hate to be Mr. Doom-and-Gloom. I have a fabulous wife, 3 great children, my wife inherited a boatload of money and a huge house, I have a job that’s fun (the teaching part anyway), on and on.
But when I see huge debts, out of control spending by our government, promises of higher taxes, rising unemployment, crashing homes prices…well, those things just plain suck.
I also know a little history and I know we had 4 depressions in the first 150 years of our Republic, but haven’t had one in about 75 years. Has this phenomenon been legislated out of existence? By OUR government, a bunch of crazies if there ever was one? By Nancy Pelosi and Harry Reid?
“Meanwhile, the total debt homeowners still owe on their properties last year exceeded the amount they have paid off for the first time since records began in 1945, the Federal Reserve said on Thursday.”
[quote]Headhunter wrote:
“Meanwhile, the total debt homeowners still owe on their properties last year exceeded the amount they have paid off for the first time since records began in 1945, the Federal Reserve said on Thursday.”
[/quote]
That can be blamed on nothing more than a whole bunch of idiots buying way above their means. On the upside, if the gov’t will stay out of the way, it could be a buyer’s market real soon.
I think we have an overactive Fed Chairman. Greenspan was hailed as a genius. A lot of the current situation can be blamed on him.
[quote]rainjack wrote:
Headhunter wrote:
“Meanwhile, the total debt homeowners still owe on their properties last year exceeded the amount they have paid off for the first time since records began in 1945, the Federal Reserve said on Thursday.”
That can be blamed on nothing more than a whole bunch of idiots buying way above their means. On the upside, if the gov’t will stay out of the way, it could be a buyer’s market real soon.
I think we have an overactive Fed Chairman. Greenspan was hailed as a genius. A lot of the current situation can be blamed on him. [/quote]
I agree. Too much meddling. They need to back off and let people take their lumps. Their meddling should be limited to prevent catastrophes like the Great Depression, not minor shit like a 1% bump in unemployment.
I might be wrong about this, but weren’t the past depressions a local phenomenon, meaning confined mostly to the US, with little effect on other countries?
Now that we have a “global” economy, with various methods of moving money around electronically (both macro and micro levels)and the plethora of financial tools (currency manipulation/hedging methods etc, does it make it more difficult to crash the economy?
Boston posted this in another thread and it has me more spooked than usual.
"According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries’ combined GDPs. Not only does this dwarf any previous house-price boom, it is larger than the global stockmarket bubble in the late 1990s (an increase over five years of 80% of GDP) or America’s stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history. �?� "
Let that sink in — the biggest bubble in history
Banks and PMI are leveraged to the hilt and going down fast, pulling money and assets with them, in a chain reaction that’s just beginning.
[quote]Headhunter wrote:
Boston posted this in another thread and it has me more spooked than usual.
"According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries’ combined GDPs. Not only does this dwarf any previous house-price boom, it is larger than the global stockmarket bubble in the late 1990s (an increase over five years of 80% of GDP) or America’s stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history. �?� "
Let that sink in — the biggest bubble in history
Banks and PMI are leveraged to the hilt and going down fast, pulling money and assets with them, in a chain reaction that’s just beginning.
[/quote]
Biggest bubble in history? What does that really mean? There are more people, and more wealth than ever before.
Stands to reason that an asset bubble will get bigger proportionate with the wealth available to create said bubble.
Correct me if I’m wrong please,but let’s say your average person has a house (primary residence),and now the assesed value of the property is less than the mortgage value.
When does this issue become a problem?
In my view ,only if the individual wants to sell.
Up until that point it’s of no consequence.
[quote]Neuromancer wrote:
Correct me if I’m wrong please,but let’s say your average person has a house (primary residence),and now the assesed value of the property is less than the mortgage value.
When does this issue become a problem?
In my view ,only if the individual wants to sell.
Up until that point it’s of no consequence.
Or am I not understanding something here?[/quote]
The homeowner will probably have trouble refinancing, or getting a HEL.
The main problem is that the downturn has killed the house flipping industry.
I have a brother inlaw who has bought, lived in, and sold 8 houses in 10 years, or so. The house he is in now will be the last one for a while.
In all honesty - I don’t really care about the housing bubble. I own my house, so all the mortgage bankers can suck the knob as far as I am concerned.
[quote]Neuromancer wrote:
Correct me if I’m wrong please,but let’s say your average person has a house (primary residence),and now the assesed value of the property is less than the mortgage value.
When does this issue become a problem?
In my view ,only if the individual wants to sell.
Up until that point it’s of no consequence.
Or am I not understanding something here?[/quote]
Assessed value is what you pay taxes on and doesn’t necessarily equate to market value.
Having a home assessed for $ 100,000 and being able to sell it for $ 200,000 is a good situation.
Having a $ 200,000 mortgage on a home that people will only pay $ 100,000 for is a bad situation.
[quote]jp_dubya wrote:
The invisible hand. Let the market forces run. Intervention is counterproductive. Intervention extended the great depression.[/quote]
And while you’re at it, please note that intervening in sovereign countries’ internal affairs is not only counterproductive, but very dangerous.
Remind me, how much money you lot spent on Iraq so far?
[quote]rainjack wrote:
Neuromancer wrote:
Correct me if I’m wrong please,but let’s say your average person has a house (primary residence),and now the assesed value of the property is less than the mortgage value.
When does this issue become a problem?
In my view ,only if the individual wants to sell.
Up until that point it’s of no consequence.
Or am I not understanding something here?
The homeowner will probably have trouble refinancing, or getting a HEL.
The main problem is that the downturn has killed the house flipping industry.
I have a brother inlaw who has bought, lived in, and sold 8 houses in 10 years, or so. The house he is in now will be the last one for a while.
’
In all honesty - I don’t really care about the housing bubble. I own my house, so all the mortgage bankers can suck the knob as far as I am concerned.
[/quote]
You said what I was trying to get at in a clearer manner.
I don’t see how being forced to live in the house one is paying off for a
longer period because the market has become less speculative and more realistic can be a bad thing.
It’s how my parents lived,and my grandparents before them.
The constant media fed obsession with ‘upgrading’,‘getting ahead’ and ‘instant satisfaction’ leads down this road.
Sometimes,one just CANNOT FUCKING AFFORD IT and needs to be patient and save.
