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Recession--Depression??

Do You think the US Economy is Heading into a Recession--or a Depression?

  • No-the Economy is doing Fine

    Votes: 0 0.0%
  • Yes- a mild short Recession

    Votes: 0 0.0%
  • Yes- a prolonged Recession/Depression

    Votes: 0 0.0%
  • Economic Collapse

    Votes: 0 0.0%

  • Total voters
    0
A

Anonymous

Guest
In macroeconomics, a Recession is a decline in any country's Gross Domestic Product (GDP), or negative real economic growth, for two or more successive quarters of a year. However, this definition is not universally accepted. The American National Bureau of Economic Research defines a recession more ambiguously as "a significant decline in economic activity spread across the economy, lasting more than a few months." A recession may involve simultaneous declines in coincident measures of overall economic activity such as employment, investment, and corporate profits. Recessions may be associated with falling prices (deflation), or, alternatively, sharply rising prices (inflation) in a process known as stagflation. A severe or long recession is referred to as an economic depression. A devastating breakdown of an economy is called economic collapse. Newspaper columnist Sidney J. Harris amusingly distinguished terms this way: a recession is when you lose your job; a depression is when I lose mine.


Reprinted from MoneyNews.com
Recession Points to Lower Rates

John Browne
Monday, Nov. 19, 2007


Same store retail sales are showing signs of trouble, with 26 stores showing negative growth, three of them in double digits.

Despite massive discounting (and, ultimately, profit erosion) Wal-Mart's sales growth dropped from a growth rate of 5.0 percent to just 0.7 percent. Even JC Penney — a prime middle markets store — reported a negative 1.8 percent!

It appears that the decline in consumer spending, as I have long forecast, is now at hand.

CNBC reported that real wages are falling by 1.4 percent.

Some commentators point to a drop in consumer debt as a good sign: Consumers are paying down their debts. It is indeed a good sign in the long-term.

But as we head into a recession, it is bad news. The American consumer appears to be cutting back.

It is clear that recession is close at hand. Indeed, as I have said for some time, we feel the fourth quarter of 2007 will prove to be the start of a long and deep recession.

Normally, recessions start with a decline in consumer demand and lead to weakening real estate prices.

What is strange about this recession is that it has been triggered by a major collapse in real estate prices.

In addition, this recession follows a boom during which leverage and liquidity have been at historic highs. I think this bodes ill. It will be a long and painful recession.

Now, we also see inflation rising. The producer wholesale price of consumer products has come in at a whopping 7.4 percent. Will this increase be absorbed by corporations, reducing earnings, or passed on to consumers and place further upward pressure on consumer inflation (CPI) already running at an annualized rate of 3.6 percent?

So the "stealth inflation" of which I have long warned is now coming out into the open.

In short, as the Fed mentioned in its last statement, the forces of recession and inflation are roughly "in balance." Inflation and recession together spells stagflation—a great economic ill.

Was the Fed's statement, therefore, the first official acknowledgement of stagflation? I think, yes!

This is very bad news. But, in addition, our economy is bedeviled by a plummeting dollar.

As we have pointed out in detail before, a falling dollar is both highly inflationary and likely to prove devastating to our balance of payments over the long-term.

Both a stronger dollar and inflation call for higher rates. But, increased rates could drive our coming recession into a depression.

So, our Fed is between a rock and a hard place. That, in my view, is why the Fed has hesitated for the past year. They have talked tough on inflation but left rates on hold, with "real" rates (net of inflation) actually tightening as I warned of a housing bust-led recession.

In view, if they were not prepared either to defend the U.S. dollar or to hit hard at inflation, I think the Fed should have lowered rates very aggressively over the past few months.

I say aggressively because I sense an unusually deep, housing-bust-led recession is ahead and I believe that history shows it takes some nine to 24 months for lower rates to gain traction and stimulate economic growth.

But that is all looking through the rear view mirror.

In other words, the prospect of a deep recession, especially in an election year, will bring very great pressure on the Fed (despite its so-called independence) to forget inflation and the dollar's plight and concentrate all efforts upon getting us out of inflation, even if it is late — and late it will be!

----------------------
It all adds up to a financial nightmare, with stagflation raging. However, other nations will also face difficulties. The subprime "toxic waste" has been sold internationally. All economies depend upon the viability of paper money, now threatened by a dollar collapse.

In the past few days, we have seen both French President Nicolas Sarkozy and Japanese Prime Minister Yasuo Fukuda expressing great concern over the plunge of our dollar.

I believe that the recession, I have long warned of is now squarely on the cards.

full story:

http://moneynews.newsmax.com/money/archives/articles/2007/11/19/103210.cfm?s=al&promo_code=3DCE-1
 

backhoeboogie

Well-known member
Will the economy get depressed enough to get fuel prices back down?

A depressed economy will get the prices down to where everyone wants them.
 

Tex

Well-known member
backhoeboogie said:
Will the economy get depressed enough to get fuel prices back down?

A depressed economy will get the prices down to where everyone wants them.

If it is as result of the dollar's continual fall---I wouldn't bet on it.

The big oil producers (even the Saudis have shown an interest) are trying to price oil in different currencies other than just dollars.

That won't help you out there, backhoe.
 

Faster horses

Well-known member
Just wondering about this regarding inflation:

I remember Pat Goggins writing seveal years ago that inflation for agricultuare is not a bad thing. It helps farmers and ranchers as it allows them to pay off loans easier because of the inflated dollar.

...so--what do you all think???
 

Mike

Well-known member
I have been warned 10 MILLION times about us having a deep depression since I was knee high to a grass hopper. :roll:

It could happen tomorrow if everyone really thought so.............
 
A

Anonymous

Guest
Faster horses said:
Just wondering about this regarding inflation:

I remember Pat Goggins writing seveal years ago that inflation for agricultuare is not a bad thing. It helps farmers and ranchers as it allows them to pay off loans easier because of the inflated dollar.

...so--what do you all think???

Pat Goggins has also said that what this country needs to straighten it out is a good old fashioned depression... :???:

I think we've actually had a period of inflation now for several years-- with national inflation being closer to 5% per year than the reported 2%, which has been being reported- under the cooked system started by Clinton, and actually doesn't give you the true costs people are paying....In some areas this may even be higher--as this last year the costs to the average Montana farmers/ranchers was figured to be closer to 10% higher than the previous years...And in the national economy- we have not only had inflation- but stagnation with inflation costs rising faster than wages...Our area of the country workforce hasn't been effected as much by stagnation- because of the increased oil and coal industry demand.......

I think we are now in worse shape- as the country is going into stagflation- and it isn't going to be as easy to fix and will take a lot longer- and the pain to everyone will be felt a lot harder....

Both the energy (oil) cost and the housing mortgage scandal are going to be national triggers to keep this thing snowballing...A good source in Federal law enforcement tells me that this fraud/corruption investigation in the mortgage industry is just snowballing- and will do nothing for government or banking confidence...They don't even come close to having the investigators available to handle it-- and they already have 1/3 of the entire number assigned...
Evidence is appearing just the last couple of days- tying many top Banking Institutions into outright conspiracy and fraud with some Appraisal firms that were cooking values of housing.....


Stagflation, a portmanteau of the words stagnation and inflation, is a term in general use within modern macroeconomics used to describe a period of out-of-control price inflation combined with slow-to-no output growth, rising unemployment, and eventually recession.



Stagflation is a problem because the two principal tools for directing the economy, fiscal policy and monetary policy, offer only trade offs between growth and inflation. A central bank can either slow growth to reduce inflationary pressures, or it can allow general increases in price to occur in order to stimulate growth. Stagflation creates a dilemma in that efforts to correct stagnation only worsen inflation, and vice versa. The dilemma in monetary policy is instructive. The central bank can make one of two choices, each with negative outcomes. First, the bank can choose to stimulate the economy and create jobs by increasing the money supply (by purchasing government debt), but this risks boosting the pace of inflation. The other choice is to pursue a tight monetary policy (reducing government debt purchases in order to raise interest rates) to reduce inflation, at the risk of higher unemployment and slower output growth.
 

Tex

Well-known member
Faster horses said:
Just wondering about this regarding inflation:

I remember Pat Goggins writing seveal years ago that inflation for agricultuare is not a bad thing. It helps farmers and ranchers as it allows them to pay off loans easier because of the inflated dollar.

...so--what do you all think???

This is true, as long as your debt has a fixed interest rates. Most operating loans do not.

Look what the weak dollar is doing for commodity prices right now. Might be the best year in the last 20 for farmers.

If you remember way, way back, William Jennings Bryan's speech on an inflationary monetary policy that included silver spoke to the problems farmers had in the late 1800s and how inflation would help them out:

It was one of the most famous speeches in American History, ranking up there with the Gettysburg Address.

Here it is:

http://historymatters.gmu.edu/d/5354/
 

Goodpasture

Well-known member
We are borderline economic collapse right now. From a budget surplus o a multi trillion dollar deficit has the entire world scared of the American Dollar. OPEC is accepting Euros as prime currency. We cannot put teeth into our safety laws because we owe the bulk of the money to China. Just as we once owed Japan, what we have to do is pay our debts with the currency produced by our labor and industry......but Bushco still has the idea that corporations should get tax cuts and be able to write off the cost of moving jobs offshore. So, instead of insisting that we pay our bills with sweat and work (through taxes) he is going to push for more money to be printed, making the dollar less useful than toilet paper. Another 4 years of neocon economics, and our Federal Reserve Note will be worth their weight in confederate dollars.
 
A

Anonymous

Guest
I have seen little it in the media yet--my law enforcement source says the criminal part has been being kept confidential until they could get a good handle on it-- but the part that is going to rock the economy and the banking world is going to be the Civil cases...Not only will many important bank CEO's probably face criminal charges-- but in the last couple days the victims of these Banks/Appraisal firms conspiracies have been filing civil lawsuits against these lending institutions-- and many may cease to exist after the suits are over...

That said-- I saw on a news report the other day that average "Golden Parachute retirement accounts" that these major lending institutions top CEO's have is $66 million.... :roll:
No skin off their hindend if millions were defrauded and their company goes broke-- take their parachute and bail.... :( :( :mad:
 

Tex

Well-known member
Won't be a problem if you have diplomatic immunity like Bush's Netherland's ambassador. :twisted: :evil:
 

Goodpasture

Well-known member
I am a disciplinary hearing officer for the Oklahoma Real Estate Appraisers Board. We have hearings scheduled, two a week, from now till the middle of February and more in the pipeline. I am filing three complaints this week. The process to get an appraiser complaint to that level requires nearly half a year of investigation. Most of the appraisers that get that far have their license revoked (we do not like to let a guy who performs fraudulent appraisals surrender it....gives him the opportunity to move to Kansas or Texas or some where and start all over again). I also do upgrade work-product reviews, and of the 30 or so I have seen in the past year, 80% were incompetent. I finished such a review this morning about 4. I am seriously considering filing a complaint over the files he submitted as HIS BEST WORK! He has done several hundred appraisals over the past four years, and I bet NONE of them are worth the paper they are written on.

The problem, is this is the STANDARD, not the exception. And if Wall Street took those to the bank, the problems the media is reporting is like saying it was an ice cube that hit the Titanic.

The market is going to be corrected in one of two ways......real estate portfolios are going to be valued at below 50% of last years valuation, or phony money is going to be printed and sent to the investors to instill confidence. If the first, the economy will take a hit and adjust (and the fallout will be tremendous.....everything from Unions funds to insurance funds invested in REITs are going to be turned into toilet paper) and we will hit a major depression. If we print more money, and it kills the dollar (which it will) then we are in for a catastrophic depression.

And yes, virtually every state is scrutinizing appraisers now.
 
A

Anonymous

Guest
Well at least GW found a way to get Iraq from being the number one problem on the Pollsters surveys :wink: :lol: :( :( :cry:

November 19, 2007
Economy Eclipses Iraq as “Most Important Problem”Public dissatisfaction with how things are going at highest level in years

by Lydia Saad
Page:1234PRINCETON, NJ -- As U.S. housing market and stock market troubles have intensified over the past month, Americans have grown more likely to identify the economy as the nation's top problem, and less likely to name the Iraq war. At the same time, the percentage of Americans saying they are satisfied with the way things are going in the country has dropped to the lowest level Gallup has recorded since 1992.

Gallup measures public perceptions of the nation's most important problem every month as part of the Gallup Poll Social Series. The latest survey, conducted Nov. 11-14, 2007, finds 31% of Americans citing any of several economic issues as the nation's top problem, up from 22% in October.

For the first time in more than a year, this "net economic" figure exceeds the percentage naming the situation in Iraq. Currently, 24% say Iraq is the top problem -- down from 33% in October, and the lowest percentage for Iraq seen since September 2006.



This month's rise in net economic mentions to Gallup's "Most Important Problem" measure comes mainly from five-point increases in the percentages of Americans citing the economy generally (14% today, up from 9% in October), as well as fuel prices (now 7%, up from 2%).

Other problems on the minds of at least 5% of Americans are healthcare (named by 12%), government performance and leadership (11%), immigration (7%), and ethics and morals (5%). Education, terrorism, and foreign aid are each mentioned by 4% of Americans; the environment and poverty by 3% each. Only 2% name crime. The full results are shown at the end of this report.

The poll cannot definitively answer why the economy has replaced Iraq at the top of this list. It's certainly possible that Americans perceive some improvement in the war, given recent news reports of a drop in insurgent attacks and U.S. casualties, and are thus less likely to think of Iraq as the nation's top problem. However, it's also possible that rising public concern about the economy (as documented in the new poll) is causing it to crowd out Iraq to some degree when Americans are asked to name the top problem facing the country.

Dissatisfaction Widens

Since January 2004, Americans' perceptions of the way things are going in the country have been consistently more negative than positive. However, the percentage of Americans saying they are dissatisfied has gradually increased -- from an average of 55% in 2004 to 70% in 2007.



The public's mood has become even grimmer over the past month, with the percentage dissatisfied rising from 72% in a mid-October USA Today/Gallup poll to 76% today. Only 20% of Americans are now satisfied with the way things are going in the nation, down from 26% in October, and from an average of 28% thus far in 2007.

The percentage currently saying they are satisfied with how things are going in the country (20%) is the lowest since July 1992. The lowest in Gallup's records was 12%, recorded in July 1979.



Economic Gloom Stirs Dissatisfaction
This past month's decline in public satisfaction with the way things are going might be understood in terms of consumer confidence. It comes at the same time Gallup finds Americans' already negative attitudes about the nation's economy growing even worse. Those economic attitudes, in turn, are strongly correlated with overall public satisfaction with the country's direction.

A majority of Americans who are positive about the national economy -- compared with very few of those who are negative about the economy -- say they are satisfied with the general direction of the United States. The basic relationship between these two attitudes is almost exactly the same in November as it was in October.



What's changed is that fewer Americans now fall into the "positive" and "mixed" consumer confidence categories, while there has been a nearly 10-point increase (from 57% to 66%) in those classified as "negative."

full report:

http://www.gallup.com/poll/102823/Economy-Eclipses-Iraq-Most-Important-Problem.aspx?version=print

Rasmussen Consumer Index
Consumer Confidence Falls Again to Lowest Level in Four-and-a-Half Years
Monday, November 19, 2007

Consumer confidence continues its downward descent on Monday. For the second straight day, the Rasmussen Consumer Index fell to its lowest level in more than four-and-a-half years. At 91.5, the Index is down two points from yesterday, down seven from a week ago, down eleven from a month ago, and down thirty-one from a year ago.

The Rasmussen Consumer Index measures the nation’s economic confidence on a daily basis and has now been below the 100.0 baseline level for two full weeks. That baseline was established in October 2001 meaning that economic confidence today is lower than it was in the aftermath of the 9-11 terrorist attacks.

Today, just 27% rate the economy as good or excellent while 36% say fair and another 36% say poor. Those figures represent a sharp decline from the beginning of 2007 when 40% said the economy was good or excellent and just 23% said poor.

Just 13% of Americans now say the economy is getting better while 68% say it is getting worse. Forty-two percent (42%) say the country is in a recession already and another 13% say a recession is coming within six months.

When it comes to personal finances, 36% say their own finances are good or excellent while 22% rate them as poor. Just 25% say their finances are getting better while 50% take the opposite view and say they are getting worse.

The Rasmussen Investor Index fell four points on Monday to 107.6. That’s down nine points from a week ago, and thirteen points over the past month. So far, in 2007, the Rasmussen Investor Index has fallen more than 36 points after starting the year at 143.9.

The Investor Index reading for today is the lowest of 2007 and the lowest since mid-March 2003.
full story:

http://www.rasmussenreports.com/public_content/business/indexes/rasmussen_consumer_index
 

backhoeboogie

Well-known member
Tex said:
That won't help you out there, backhoe.

:D I'd be better off financially if prices continue to climb.

On the other hand, if we have a depression, it would be time to buy up everything while prices are cheap. (e.g. land) I have very little (maybe 3%) blended into foreign stocks. Nickels in CDs are losing money but it is a good hedge, in case a depression hits. My crystal ball has never been all that great, but it does okay. At this point in life, at this age, it is best to consider all possibilities and plan accordingly. Being conservative with investments might pay off - or it might not. Petro royalties have always been right there with the economy. Plus I have no real plans for early retirement. Pelosi scares me. Other than that, deal the cards and I'll play. No choice. I won't bluff and I won't fold winning hands either.
 

Cowpuncher

Well-known member
The replies above give more insights into the persons posting than what is going to happen to the economy.

Right after World War II, there was fear that the world would drop back into a depression. At the time, Montgomery Ward and Company were the undisputed champs of the retail/mail order field. Sear was a distant second.

The chairman of Wards was certain that a depression was on its way. Sears had different thoughts. Wards curtailed investment while Sears forged ahead. We all know what happened. Sears rapidly passed Wards and eventually Wards went the way of the dinosaur.

Some years later, Sears abandoned their proven marketing systems and were quickly overcome by K-Mart (who eventually bought Sears) and then Walmart.

Anyone who thinks the economy is similar to the 1930s will spend a lot of time worrying when they could be planning the future.

What do I think? I am going to keep right on doing as I have for the last 55 years. I have weathered the ups and downs without concern and am comfortable in my belief that I am smart enough to cope with whatever comes.

After all, I forsaw the S & L crisis, the Dot.Com boom and the current subprime problem. Just plain old common sense. Don't climb out on a limb unless you have something else to hold you up.

When this crisis has passed, some smart financial people will be cooking up the next one.
 

backhoeboogie

Well-known member
Cowpuncher said:
What do I think? I am going to keep right on doing as I have for the last 55 years. I have weathered the ups and downs without concern and am comfortable in my belief that I am smart enough to cope with whatever comes.

Me too. We can feed all of ours. Cowpuncher, I like your outlook. Enjoyed all of that post of yours.
 

Tex

Well-known member
It is a recession if your neighbor loses his job.

It is a depression if you lose yours.


Like Einstein said, it is relative.
 

aplusmnt

Well-known member
You guys have me scared. Seems in todays spoiled world I have heard about how bad the economy is doing, is going to do ever since I was old enough to work and understand the value of a dollar.

There have been tough times but all in all the last 28 years of my working life I have came to one understanding, if you work hard the money will always be there. If you want success and financial freedom all it takes is a little hard work and sacrafice. The problem is today people do not want to sacrifice. They want all the luxuries life has to offer.

A depression might be a good thing, maybe it would teach Americans to fight to live and work to prosper instead of sitting around waiting for the government to solve problems for them.

If times get rough, I will sell a few cars, sell the boat, cancel my satellite TV, quit taking the kids to Disney World and start cutting more wood to keep warm. My family is spoiled as most are but they know how to work and they know the only things that matter in life are family, shelter and food. Everything else is OK as long as you can afford it, but if you cant then cowboy up and quit crying!
 

Goodpasture

Well-known member
aplusmnt said:
A depression might be a good thing,
You sure about that? Last time we had a depression we got 16 years of Democrats running Washington.......
LMAO-1.gif
 

backhoeboogie

Well-known member
aplusmnt said:
If times get rough, I will sell a few cars, sell the boat, cancel my satellite TV, quit taking the kids to Disney World and start cutting more wood to keep warm.

Got any trucks or heavy equipment? If nobody has the nickels to buy those off of you, I'd pick them up for pennies on the dollar :lol: Don't much care about television, a car or a boat. Don't have any use for golf clubs either. Shotguns? Come on aplus, you have to have something I'd be interested in stealing from you.

Seriously, if you can't find a job, there isn't much hope of getting that second job to make ends meet. I had the second and third job for years and years already. All those extra nickels were invested. Some were invested wisely. I can still hoe a garden if need be and have some good ones.
 
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