economic indicator

[Davestone]

Here's an indicator for ya,we've been in a housing meltdown in my town for over a year, and i've been saying it's gonna get worse this may be proof.....http://currentworldnews.net/2007/08/...-stop-trading/

[ddmoit]

Dave,

I agree that we're headed for tough times. If I understand Cramer's position though, he wants the Fed to lower rates. I can't agree with that. We would be making the same mistake that Japan made in the '90s that they still haven't really recovered from.

I'm just started reading Crash Proof . In it, the author describes what he think will happen, and what individuals can do in the mean time to best weather the coming times. I'm not that deep into it yet, so that summary is all I have to offer.

Here's some more stuff to think about... http://www.lewrockwell.com/north/north551.html

[Davestone]

Well, i think we have two ticking time bombs,if we lower interest rates foreign investment will pull out,which China already has said it will jettison our dollar to save it's own neck.In October many of those crap adj. rate mortgages come due, this will no doubt lead to a massive default.....Now, when they lowered int. rates to lure investment into housing,then raised the interest rates 17 times they set the stage for this,the big mortgage co. then rebundled these bogus mortgages into hedge funds,which then were borrowed against again,making the rich richer,but bankrupting big operations like BearStearns,but who do you think they will bale out?Not the little homeowner,but the big co. holding these mortgages that created the whole mess.

[flatfloor]

What's going to happen is the same thing that happened the last time and the time before that. Nothing. Some people will lose houses they shouldn't have bought in the first place and some banks and investors will lose some money they gambled with.

[Davestone]

Well, i think we'll also have a lot of people losing houses from losing jobs also,with no building a lot of trades and industry will shut down.We can't all be service oriented. My wifes' restaurant is the slowest it's ever been here,i talk to people daily that are barely hanging on or out of business.I saw for the first time in my life of living in this town a sign advertising Eviction Services.

[ddmoit]

The Fed just pulled $35 billion out of thin air today and pumped it into the market.

That means there are 35 billion more dollars chasing after pretty much the same amount of things to buy as there were yesterday. You may not notice it today, but the dollars that you have are now worth less. You've had purchasing power stolen from you the same as if your wallet was stolen by a thug.

http://biz.yahoo.com/ap/070810/fed_liquidity.html?.v=16

[Davestone]

Wel, at least they did something,i guess,if it stabilizes the market, and keeps us from panicking and having a credit crunch.....we can borrow more easily,which will come in handy cause we don't have as much income or buying power.

[ddmoit]

http://www.lewrockwell.com/orig8/wallach1.html

My rough calculation suggests that over the last two days the Federal Reserve has pumped in enough new reserves to increase the money supply by somewhere between 10% and 15%.

This is a stunning number. The money supply in a year rarely grows by 10%, for it to do so in 48 hours is mind-boggling. Yes, the Fed has come to the rescue by further pushing the dollar on the road to collapse. While most eyes are on the current mortgage crisis, the bigger danger is the potential collapse of the dollar on foreign exchange markets. The dollar has been slowly falling in value against most currencies for a while. It is at multi-decade lows in some cases. I have feared a further major collapse of the dollar even before the Fed's moves over the last two days.

The mortgage crisis will pass. The Fed will print its way out of this crisis. But, the dollar crisis is ahead and the Fed won't be able to print its way out of that since it's been Fed money printing that is the cause of the world being flooded with dollars.

[ddmoit]

http://www.mises.org/story/2676

For those who have gone through the Economics 101 treatment of the Fed, the sudden appearance of MBS [mortgage backed securities] in Fed open market operations might seem odd. Professors have always taught that when the Fed expanded the money supply it did so by buying government bonds and bills. Indeed back in September 2001, the Fed provided liquidity by buying what it has always traditionally bought; treasury securities. So why is the Fed buying MBS now, and when did it acquire the authority to do so?

http://www.mises.org/story/2656

Well, I must now report that after wading hip-deep into the numbers for a consulting project, I have acquired "more information" and now agree with the alarmists this time around: I now believe that at present, the US current account deficit is indeed unsustainable, and I expect the dollar to fall (perhaps sharply) against other major currencies over the next few years.

[Davestone]

Well, even Robert Murphy himself admits he's been pretty wrong in his predictions.I don't think you have to be a genius to scream what we've been screaming for years, you can't send all your industry overseas,and be an economic powerhouse.The dollar may go farther down, but we're not gonna slide off the universe..

[ddmoit]

http://www.ft.com/cms/s/80fa0a2c-49e...0779fd2ac.html

David Walker, comptroller general of the US, issued the unusually downbeat assessment of his country’s future in a report that lays out what he called “chilling long-term simulations”.

[Davestone]

All hogwash,i have it on good authority from a checkout girl at Walmart, things are pickin up and now is the time to buy real estate.

[Davestone]

I did an unofficial survey of my real estate market and it is shocking, i have seen so many homes vacated and abandoned it almost scared me to death this weekend,i'm serious.Tools for sale, boats, work trucks and vans, it's like the movie Grapes of Wrath.

[Swimmer Steve]

North of you in Sarasota the RE market is also depressed. We were hot like you and now I don't see much construction goin' on.The consumer though is hanging tough with retail numbers better than expected Mon. My wife and 2 kids work at the main mall here and say it's quite busy with new stores opening up. Cheer up , you have a great skill and my Cuban co-worker (I'm in medical maint field) says all his Cuban tile-setter friends are "on vacacione". Maybe means less competition down the road?

[ddmoit]

Corroborating story on Florida housing market:

http://www.reuters.com/article/inDep...rpc=22&sp=true