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The Real economic trouble hasn't even begun!

Discussion in 'Political Discussion' started by Run DMC, Aug 7, 2008.

  1. Run DMC

    Run DMC In the Starting Line-Up

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    #24 Jersey

    Wait until the prime and alt-A party starts. If you think the economy is out of the woods, you are dreaming. 30 years of Reaganomics is about to come crashing down all around us. I watch real estate in various major metro areas, Boston, San Fran, San Diego, NYC, etc. Real estate prices on upper middle class dumps has barely budged lower, maybe 5-10% max. If you're a yuppie such as myself and you're thinking of buying anything, stocks, real estate, etc. fuggheabouit. The pain has not even started to hit mid to upper middle class America yet, but it's about to:
    http://mrmortgage.ml-implode.com/
     
  2. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    I just watched Mr Mortgage's video and it appears you're right. We have barely begun the foreclosure cycle and there will be thousands of middle priced homes foreclosed upon. Much of it is due to people sucking all the equity out of their homes through refinancing foolishly.

    The fed won't be able to bail all this out and to that I say THANK GOD! We desperately need housing to bottom out completely and naturally. Only then can we begin to re-build the housing market upon solid business models and REAL values.

    I can't believe how much bigger the Alt1 mortgage crisis that is pending will be compared to the sub-prime crisis that is now peaking. Hide your cash and install bars on your windows folks.
     
    Last edited: Aug 7, 2008
  3. Run DMC

    Run DMC In the Starting Line-Up

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    #24 Jersey

    It is scary and getting no headlines as of yet, just like subprime was 2 years ago. This one is going to hit middle and upper middle class, professional america right in the kisser. There isn't enough money in the world to stave this off like the FED did with this subprime mess.
     
  4. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    ONe of the strange phenominons I've seen over the past year is that the general public acts like real estate people in that they deny & underestimate how bad the housing market actually is. Real estate agents will often say "we've hit bottom & things are turning around" just because they think it will positively impact the industry. What I don't understand is private citizens doing the same thing.

    Even some memebers of this board will often act as if they are blind to the facts and declare "It's not so bad" or "it's starting to get better". And it begs the question "Why?"
     
  5. wistahpatsfan

    wistahpatsfan Pro Bowl Player

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    #75 Jersey

    Got cash?
    If you do, join me while we wait this out and watch the RE market continue to bottom out. Stocks and bonds (not counting commodities) will be nothing compared to the profits (long-term) you will be able to make when this market bottoms out. Lots of people will suffer, but that won't change. Hang on to your liquidity.

    My brother is a RE broker, and he admits that his market has no choice but to lie about conditions. They are in a fight for their life. He has a second job which will soon become his first one, but we're both sitting on our reserves and waiting for the "real" bottom to come through...and it won't be this year.
     
  6. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Very realistic view Wista. I understand why real estate agents lie. I met with my agent on Tuesday when she showed me a house that listed at $379K and is now at $318K (assessed @ $487K!), built in 1994, 3,100 sq ft with 2 acres & BI pool. Amazing! Funny, but she did tell me things are going to get worse. her husband is a builder and things are tough for them. However, I have a hard time feeling bad for the RE industry since they made such easy money for the last several years.
     
    Last edited: Aug 7, 2008
  7. Run DMC

    Run DMC In the Starting Line-Up

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    #24 Jersey

  8. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Last edited: Aug 7, 2008
  9. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Mossed81, I just wanted to point out how the mainstream media often overstates good news in it's wishful support of Wall Street and it's own profits by showing you this;

    http://www.reuters.com/article/economicNews/idUSN0727905120080807

    Jobs, store sales soft but homes data brighter

    "WASHINGTON (Reuters) - New claims for U.S. jobless aid rose last week and big retailers had disappointing sales in July, reports showed on Thursday, but a gauge of future home sales rose in a hopeful sign for the battered housing sector.

    The higher-than-expected June signings of home sale contracts offered some hope the housing market may be stabilizing. But the jobless claims and Wal-Mart's weaker-than-expected July sales boosted concerns about consumer spending and the corporate profit outlook, sending U.S. stocks lower and U.S. government bond prices higher."


    I don't understand how they can imply the housing industry may look hopeful when considering the onslaught of the pending Alt1 foreclosures. We KNOW that the financial industry is aware that these foreclosures will be bigger than the sub-prime wave we have been experiencing, so how can a site like Reuters just close their eyes and even write that statement?

    I'm a big supporter of only putting reality in the news and to say that housing may look hopeful is the furthest thing from reality I can think of. Especially considering our stubborn New England market has only declined a little over 10%, we know we have a long way to go.

    Logic states that a household income around $100K is about 40% higher than the average for Massachusetts. Therefore, families with this income "SHOULD" be able to afford a mid-priced home in an average town in MA. But the fact is, they can only afford a $380,000 home with 20% down and that is not even close to a mid priced home.

    Now, if we look at the most important entry-level sector which families with HH incomes around $70K should be able to afford, we're not even close to the bottom. The average entry-level home is selling for around $325K in eastern MA. Right now, a family making $70K can only afford a $260K home with 20% down.

    I guess we'll just have to wait & see how this shakes out.
     
  10. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    I think a real test of the economy will come this winter if home heating oil remains at $4/gallon or more. Our oilman president has certainly been good for oil companies. Maybe he started the war in Iraq, not to get their oil, but to boost consumption and thus boost prices and oil company profits?

    [​IMG]

    By the way, the chart isn't up-to-date, at least according to this site:

    http://www.newenglandoil.com/massachusetts/zone10.asp?x=0

    [​IMG]
     
    Last edited: Aug 8, 2008
  11. patsfan13

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    Pelosi and Reid said they had a plan to lower gas prices before the 2006 election, care to share that with us Patters?

    What plan does BO have to lower energy prices?
     
  12. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

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    A very good op ed on drilling and the dems "plans"

    http://www.humanevents.com/article.php?print=yes&id=27951




    The audacity of ignorance??
     
  13. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    I think Obama recently proposed several things, including selling crude oil from the strategic petroleum reserve and he's said he to get bipartisan support for a plan he'd support limited offshore drilling. In addition, he's proposed significant investments and incentives to develop new technology for making more fuel efficient cars, making nuclear energy more effective and safer, and doubling the use of renewable resources. As far as Pelosi and Reid's ideas, I'm not really following them.
     
  14. patsfan13

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    Tapping the emergency reserve will have no long lasting effects on a supply/demand issue. Waiting for legislation from congress isn't leadership?

    What specifically is his propoasl and how would it lower oil prices?
     
  15. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    He's proposed many solutions, such as investing or tax credits for insulating homes, investing in the auto industry so it develops more fuel efficient cars, making nuclear energy safer and addressing hazardous waste issues so it could become a bigger part of the solution, having a use it or lose it policy for oil and gas leases to encourage exploration, offer tax incentives so people buy more hybrid or other energy efficient cars, invest in developing clean coal technologies, etc. Obviously, the theory is that less consumption will lead to lower fuel prices.
     
  16. Real World

    Real World Moderator Staff Member

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    So I take you're a supporter of drilling our own reources, so as to increase supply, keep US dollars at home, and ease the financial strain on US families? Afterall, I'm not sure that a family inflating their tires is going to get them more heat per gallon with their boiler.

    I thought we went into Iraq for the oil? That's what people have been saying since day 1. Are you telling me now that it wasn't about the oil, and actually was to make it more scarce?
     
  17. patsfan13

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    Less consumption = less economic activity = poorer country.


    Drill Here, Drill now, Lower prices.
     
  18. patsfan13

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    I was wondering how the war in Iraq increased demand in China and India???;)
     
  19. PatriotsReign

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    #18 Jersey

    You really don't know you economics Patsfan...you should stick to what you know.

    Less consumption on oil does NOT mean less "consumption" in the economy. As a matter of fact, it would result in INCREASED consumption on goods & services that would benefit the economy more than $$ spent on oil/gas.

    Reduced petroleum consumption would give people more disposable income to spend on "consumable goods" like clothing, food, household goods, appliances, etc. Money spent on these goods results in more jobs and more economic stimulation than money spent on petroleum products. Remember, consumer spending (which does not include $$ spent on petroleum) is responsible for two thirds of US economic activity.

    less petroleum consumption = increased economic activity = wealthier country

    Care to try again?
     
    Last edited: Aug 8, 2008
  20. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

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    Perhaps I shlould have said less energy rather than less consumption, our economy is based on the availibility of cheap energy. Energy is used to grow our food, manfacture products, heat our homes, to transport goods.

    If energy is more expensive we are poorer .
     

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