The Economy, What is Your Belief?

[Dale Mabry]

I was talking with a client today and she was telling me to start investing. After a prolonged discussion, it struck me that she thought we were on the rebound right now. Anyway, I was wondering where everyone here thought we were and why. I think my stance is obvious, I think we are plateau-ing right now, but believe another significant drop is in our future. My reasons are:

1)What caused this problem and what has changed?
Big salaries and incentives for taking big risks to make short-term gains. Salaries for these execs is already above what it was, and the financials made record profits last quarter. Big risks lead to big reward, so I don't imagine conservative investment got them those profits. I am aware the gov't infusion was so large that making a profit was insured, but if the salaries of these execs is based off of long-term performance, why are these companies tripping over each other to give their execs $10 million dollar bonuses not even a full year from receiving massive bailouts.

2)Housing
Every year home sales increase over the summer, this past summer they rose slightly, last month they fell. All of this, despite giving $8,000 to new home buyers. This credit is set to expire, and 7 million homes are either in foreclosure or on their way. Do the math, home prices may be increasing, but unless they are increasing above the $8,000 credit the gov't is paying, the increase is artificial. Banks are not looking to help out the distressed borrower because they will just get the money from borrowers via a large gov't bailout. The gov't is continuing to perpetuate this by not letting the market set itself. Heard any info on September new car sales? The prediction is a 40% decline from the C4C program, and lower than from before the program.

So what is everyone else thinking right now?

 

[ROID]

lol.........now is the time to invest for a newbie.

by newbie i mean someone who hasn't lost his ass in bullshit. NOW is the time to invest in the market.

i'm a thousand-aire as we speak. I'm so happy I could piss my pants, literally.

then again, why not listen to the liars that drive the mercedes on this board.

 

[katt]

Actually I think now is the time to invest. In my area, we are back to the 'regular' prices on homes after the 05 over-inflated market. They are where they would have been if the market had the steady increase each year rather than soaring into the atmosphere and giving everyone a false sense of value.

If I had money to invest, which I don't I would definitely be purchasing.

 

[lnvanry]

Now is an good time to invest but not great...the FED will raise interest rates sometime (1quarter or the next). They will put it off for as long as possible, but when they do raise them, the market will drop a good 7-10%...it will then do the fluctuated rise, with the dips during FED interest rate hikes until we reach a level back to norm (ie 3.5%ish)

 

[Doublebase]

I have a little over 10k to invest in the stock market. I'm just doing my research right now and trying to find the right company. I want to just stick with one stock this time. Putting all my eggs in one basket so to speak. That way I can concentrate on it better. Its in an IRA so I don't have to worry about capital gains tax.

As for the housing market, I hear they extended the 8k for first time home buyers. I'm always looking to buy investment properties. Now is a good time for that. It's just scary because who knows if I will have a job next month.

 

[maniclion]

I believe that all we need is optimism, not arm-chair economists giving us their bleak outlooks to try and seem like they know how the fuck this shit works in the first place. All I know is what I see and I have seen many multi-kilowatt solar electric systems flying up on roofs faster than we can re-stock our shelves, I saw a new Lamborghini dealerships grand opening last night on my way home from work...on the other hand our state is forcing teachers to take extra days off unpaid but I see that as a continuance of under-budgeting for education in hopes of getting extra federal support next go round.....using the children's' futures as bargaining chips for federal aid so the Governor and friends can keep their cushy paychecks........

 

[lnvanry]

I have a little over 10k to invest in the stock market. I'm just doing my research right now and trying to find the right company. I want to just stick with one stock this time. Putting all my eggs in one basket so to speak. That way I can concentrate on it better. Its in an IRA so I don't have to worry about capital gains tax.

As for the housing market, I hear they extended the 8k for first time home buyers. I'm always looking to buy investment properties. Now is a good time for that. It's just scary because who knows if I will have a job next month.

careful with that approach.

BTW, word in DC is that the 8k home buyers incentive is not only going to be extended but the amount is prolly going to be raised...upwards of 12-16k. The 8k model hasn't done a good enough job stimulating the residential market.

 

[Dale Mabry]

careful with that approach.

BTW, word in DC is that the 8k home buyers incentive is not only going to be extended but the amount is prolly going to be raised...upwards of 12-16k. The 8k model hasn't done a good enough job stimulating the residential market.

Are you shitting me? Why not let the market set itself and the banks come down on price? Isn't this just getting banks their money by ripping off taxpayer dollars rather than forcing them to come down on price? On the one side, it does help first time buyers get a downpayment, but if they can't come up with $8k on their own, do they really need to be buying a house?



DB-Are you really worried about your job? Haven't you been there forever?

 

[Dale Mabry]

I believe that all we need is optimism, not arm-chair economists giving us their bleak outlooks to try and seem like they know how the fuck this shit works in the first place. All I know is what I see and I have seen many multi-kilowatt solar electric systems flying up on roofs faster than we can re-stock our shelves, I saw a new Lamborghini dealerships grand opening last night on my way home from work...on the other hand our state is forcing teachers to take extra days off unpaid but I see that as a continuance of under-budgeting for education in hopes of getting extra federal support next go round.....using the children's' futures as bargaining chips for federal aid so the Governor and friends can keep their cushy paychecks........

The 2 examples you gave are something rich folk are the primary consumers of. Rich folk don't drive the economy, middle-class folk do. Around here, all of the places the well off frequent are doing quite well, but so many other businesses have shit the bed. Who would you rather sell Ipods to, the 500k people in the upper class, or the 7Mil in the middle class?

 

[Big Smoothy]

I was talking with a client today and she was telling me to start investing.

Invest in what?

Surely not the financial markets - nobody is bullish long-term.

Invest in gold - no, it's a hedge.

Bird-dogging cheap real estate? Maybe in isloated areas if you get a steal in a rental market.

After a prolonged discussion, it struck me that she thought we were on the rebound right now. Anyway, I was wondering where everyone here thought we were and why. I think my stance is obvious, I think we are plateau-ing right now, but believe another significant drop is in our future. My reasons are:

1)What caused this problem and what has changed?
Big salaries and incentives for taking big risks to make short-term gains. Salaries for these execs is already above what it was, and the financials made record profits last quarter. Big risks lead to big reward, so I don't imagine conservative investment got them those profits. I am aware the gov't infusion was so large that making a profit was insured, but if the salaries of these execs is based off of long-term performance, why are these companies tripping over each other to give their execs $10 million dollar bonuses not even a full year from receiving massive bailouts.

2)Housing
Every year home sales increase over the summer, this past summer they rose slightly, last month they fell. All of this, despite giving $8,000 to new home buyers. This credit is set to expire, and 7 million homes are either in foreclosure or on their way. Do the math, home prices may be increasing, but unless they are increasing above the $8,000 credit the gov't is paying, the increase is artificial. Banks are not looking to help out the distressed borrower because they will just get the money from borrowers via a large gov't bailout. The gov't is continuing to perpetuate this by not letting the market set itself. Heard any info on September new car sales? The prediction is a 40% decline from the C4C program, and lower than from before the program.

So what is everyone else thinking right now?

The standard of living for the average American has been declining for a couple of decades.

By "standard of living" I don't mean buying stuff at Wal-Mart, $30-50,000 cars w/ debt and houses with large amounts of square footage.

Regardless, unemployment base rate will likely be higher for years to come and the standard of living in the US will continue to decline. The decline started in about 1970.

Result will be less security, working until our 70s, and having financial hiccups wiping people out, as they have in the last 1.5 years.

 

[maniclion]

The 2 examples you gave are something rich folk are the primary consumers of. Rich folk don't drive the economy, middle-class folk do. Around here, all of the places the well off frequent are doing quite well, but so many other businesses have shit the bed. Who would you rather sell Ipods to, the 500k people in the upper class, or the 7Mil in the middle class?

Well the Nissan Dealership moved to a new larger location recently and one of the Honda dealerships moved into a very expensive lot in Downtown. Both of those companies are driven by the middle class and they must be doing well to afford the more lucrative locations. Though Hawaii is a different beast from the mainland, there are a lot of asian families whose grand parents were smart enough to buy one or two homes way back when and so a lot of families have inherited homes so they don't have huge mortgages and more spending money.....

 

[lnvanry]

Are you shitting me? Why not let the market set itself and the banks come down on price? Isn't this just getting banks their money by ripping off taxpayer dollars rather than forcing them to come down on price? On the one side, it does help first time buyers get a downpayment, but if they can't come up with $8k on their own, do they really need to be buying a house?



DB-Are you really worried about your job? Haven't you been there forever?

no, they shouldn't be owning their own house if they can't come up with 8k...I agree. I'm just conveying what I hear in the beltway...not my idea

 

[Doublebase]

DB-Are you really worried about your job? Haven't you been there forever?

I work for a small company that rents wireless equipment to do live television events. If the companies like NBC, FOX, ESPN don't have enough sponsors then they cut out equipment they don't have to have such as wireless cameras. So we are forced to lower prices. Hence not making as much money. We only layed off 2 people in my company. There are about 65 of us. I'm pretty sure my job is secure it's just is the company secure? Its really tough out there. Fortunately there aren't to many companies that do what we do.

I also hear that the 8k may go up to 15k and be extended to everyone. Not just first time home buyers. If that is the case I will most definatly be buying an investment property.

 

[Doublebase]

I would just look at the 8k as an incentive. Not money I have to have to afford the house. That is just stupid. I wouldn't buy a house unless I could afford it on one income.

 

[danzik17]

I would just look at the 8k as an incentive. Not money I have to have to afford the house. That is just stupid. I wouldn't buy a house unless I could afford it on one income.

Pretty much the 8K just lets me hit 20% on the downpayment with plenty of cash left over.

Unfortunately there's just no houses for sale in my area that I'm too interested in.

 

[danzik17]

Invest in what?

Surely not the financial markets - nobody is bullish long-term.

Invest in gold - no, it's a hedge.

Bird-dogging cheap real estate? Maybe in isloated areas if you get a steal in a rental market.



The standard of living for the average American has been declining for a couple of decades.

By "standard of living" I don't mean buying stuff at Wal-Mart, $30-50,000 cars w/ debt and houses with large amounts of square footage.

Regardless, unemployment base rate will likely be higher for years to come and the standard of living in the US will continue to decline. The decline started in about 1970.

Result will be less security, working until our 70s, and having financial hiccups wiping people out, as they have in the last 1.5 years.

Coincidence that it happened to be around the time when Nixon completely decoupled the dollar from being backed by gold?

 

[mcguin]

national unemployment rates are the key essential determination in regards to how as a nation we're doing financially. And right now it still blows, nobody has work. When the middle class has money and isnt struggling, thats when our economy will rebound.

 

[ALBOB]

I also hear that the 8k may go up to 15k and be extended to everyone. Not just first time home buyers. If that is the case I will most definatly be buying an investment property.

Tell me more about THAT! We've got bids in on three rental properties right now. We've got the $18K we'll need for the downpayment on whichever one comes back first but, if the gov is gonna fork over $15K of the money they've stolen from me in the past, where do I sign up?

 

[Big Smoothy]

Coincidence that it happened to be around the time when Nixon completely decoupled the dollar from being backed by gold?

You seemed well versed in this area.

I assume you think it's relevant. Yes, there are quite a few people who think going off of the Gold Standard was the start.

By making the $USD a fiat currency, the gov could print more money, and also because of the 1972 Saudi Arabian deal to have OPEC buy and hold oil bourse in US Dollars the US gov could run massive deficits and get away with it.

Riding on the backs of the rest of the world.

The party for the US Dollar will have to come to end, probably over a period of time.

 

[Big Smoothy]

national unemployment rates are the key essential determination in regards to how as a nation we're doing financially. And right now it still blows, nobody has work. When the middle class has money and isnt struggling, thats when our economy will rebound.

I think the time-line for struggle may be a few years.

The Durable Goods consumption numbers for August came out today.

Declines in aircraft order may have skewed the stats, but the numbers are bad, and in the false prosperity of a consumption-driven economy, Durable Good consumption is an important statistic.

Also, the job seeker for job available ratio is 6 : 1.

Very bad ratio.

 

[danzik17]

You seemed well versed in this area.

I assume you think it's relevant. Yes, there are quite a few people who think going off of the Gold Standard was the start.

By making the $USD a fiat currency, the gov could print more money, and also because of the 1972 Saudi Arabian deal to have OPEC buy and hold oil bourse in US Dollars the US gov could run massive deficits and get away with it.

Riding on the backs of the rest of the world.

The party for the US Dollar will have to come to end, probably over a period of time.

If HR 1207 passes and isn't watered down, I think that will come sooner than you think. A full audit might just reveal how many trillions of dollars the fed is simply creating out of thin air which could spark rampant inflation depending on the numbers. That's one of the major reasons some are opposed to it.

 

[Doublebase]

Tell me more about THAT! We've got bids in on three rental properties right now. We've got the $18K we'll need for the downpayment on whichever one comes back first but, if the gov is gonna fork over $15K of the money they've stolen from me in the past, where do I sign up?

I know right. I will let you know as soon as I do. I just put an offer in on a house today.

 

[Big Smoothy]

If HR 1207 passes and isn't watered down, I think that will come sooner than you think. A full audit might just reveal how many trillions of dollars the fed is simply creating out of thin air which could spark rampant inflation depending on the numbers. That's one of the major reasons some are opposed to it.

Some powerful interests are opposing auditing and trasparency of the Fed.

When is HR 1207 due for a vote, danzik?

And nobody, not anyone, is bullish on the US Dollar.

 

[danzik17]

Some powerful interests are opposing auditing and trasparency of the Fed.

When is HR 1207 due for a vote, danzik?

And nobody, not anyone, is bullish on the US Dollar.

H.R. 1207: Federal Reserve Transparency Act of 2009 (GovTrack.us)

From what I've read it's expected to go to vote sometime in mid-October or early November. It's still sitting in committee though, so who knows what can happen - there's still a very large chance of it being watered down to the point where it's nothing more than a symbolic act.

 

[Big Smoothy]

^ Thanks for the info, danzik.

Yes, I expect a lot of watering down b the time it comes to a vote.