The economy, did you see it coming?

[Dago]

A couple years ago I was telling family and friends that I thought the economy would just be going down as a result of the corporate attempt to outsource all possible work outside of the country.  It just seemed obvious to me that if companies in this country sent work out, and as a result unemployed the working class, the middle class, the body of our population that spent and bought the most the economy would suffer.  Eventually the people not working, or subsequently underemployed would no longer be able to buy products.  When they stop buying products, the companies who sell those products would find sales dropping.  It becomes a downward spiral, the less they sell, the more they lay off workers, the more out of work, the less being spent.

I am not by any means an economist, I don't even pretend to by wise in the ways of the financial world, but sure seems to me this is the case.  During previous times of economic hardship, wasn't one of the key points to recovery "and provide jobs to the citizens"?  Doing the opposite would seem to have lead us down a bad road economically.   Will any of the greedy selfish corporate CEOs and Washington politicians recognize this and actually do anything to reverse the trend? 

I doubt it.

[wrag]

I'm inclined to look over what has happened and give serious consideration to the possibility that our current economic situation was planned.

That the individuals involved KNEW they were driving us into.

One of those they LIED to us things.

A classic create a situation that requires the surrender of more power and grab the power.

Now we get the we can fix it BUT you have to do what we say......

[Dago]

I'm inclined to look over what has happened and give serious consideration to the possibility that our current economic situation was planned.

That the individuals involved KNEW they were driving us into.

One of those they LIED to us things.

A classic create a situation that requires the surrender of more power and grab the power.

Now we get the we can fix it BUT you have to do what we say......

I am inclined to believe lack of forethought on the parts of a lot of arrogant greedy people is the root of the problem rather than some back room conspiracy.  The people who created this mess already have all the power.  This is hitting and trashing their financial portfolios as well as ours.

[sluggish]

I saw the housing buuble burst coming from a mile away and can't understand how anyone was surprised by it.  I believe it is the ultimate root of the current situation.

[CAVPFCDD]

Out sourcing was a small part of it, it was the sub prime mortage crisis.

One person who deserves major credit for calling this was Jim Cramer, His show is nutty and hes nutty but he is usually spot on with the market and he realllllllly knows his stuff. So if you ever want advice watch Mad Money, when this whole story broke he showed clips from last year and even earlier of him warning everyone about the situation we're in now, he saw it coming and he was ignored.

[Dadsguns]

I saw the housing buuble burst coming from a mile away and can't understand how anyone was surprised by it. 

I agree and also felt it was time for it to burst, but I feel the ultimate root rests with the lending practices that were encouraged and approved by some of our experts........

[sluggish]

I agree and also felt it was time for it to burst, but I feel the ultimate root rests with the lending practices that were encouraged and approved by some of our experts........

Those very lending practices greatly contributed to the housing bubble.  When you make loans available to people unable to repay them it puts more people in the market, increasing demand and making prices rise.

[Getback]

Yes, saw it for a long time. That's why my little ole house is still my little ole house. Ironically, I see it getting worse. Personally I think our leadership wanted this to happen so they could move along with their agenda. They were warned time and time again and no one did nothing to prevent it. Being the sheeple we are we just accept it.

[edog1977]

I think it all boils down to the fact that there are too many people on this planet, and our resources are finite.  Eventually we're going to reach the breaking point.

[LLogann]

The housing problem could have past without such tremendous issues if it weren't for March 14, 2008.  The day the Bear died.  Actually the problem was March 12th when CEO Alan Schwartz went live on CNBC explaining how they had all this liquidity left.  That, in and of itself, started the whole downturn of the markets.

[oakranger]

My mom and where just talking about this mess too.  What she sees is U.S. stepping back the way it was in the 50s'-60's.  I asked her what she meant by that.  She said the way we bought a house and getting a load for it, buying a car, how we had no checks or created cards.  I think she may be right.

[ghi]

This guy Peter Schiff ,   did see it , amazing economic forecast,deserves the Nobel Prize in economics, maybe  he was  wrong about the Dollar collapse, but  this crisis is not over yet,

http://uk.youtube.com/watch?v=2I0QN-FYkpw&feature=rec-HM-r2

[FiLtH]

 A few years back when I got mutual funds and the guy said in so many years I could have a million bucks I knew it was'nt gonna happen. I wondered how the heck they could do it. Guess they couldnt.

[Getback]

This guy Peter Schiff ,   did see it , amazing economic forecast,deserves the Nobel Prize in economics, maybe  he was  wrong about the Dollar collapse, but  this crisis is not over yet,

http://uk.youtube.com/watch?v=2I0QN-FYkpw&feature=rec-HM-r2

Wow!! Did you catch the recommendation on Washington Mutual? The bought a bunch of sub-prime loans from that rip off couple and then went belly up. Amazing how much fun they made of this guy and he was right. Wonder if there eating crow now.

[drdeathx]

Dago,

It's not the jobs going overseas, its the Chinese controlling the dollar. Some say we are dependent on imports(which may be true due to Chinese not importing nearly enough from us)..... Inflation would rise so high if the production came back. We are now about to suffer deflation which can be worse. Do some research. We tend to take the least path of resistance when assigning blame.

Our dollar is not bad considering what we are going though at the present time but the Chinese control our dollar through various methods. Take steel. They buy it all up when the price goes down creating a shortage and the effect is higher price(Shortage). Now they sit on all they have and watch others pay premiums. The USA has always been reactive and in the case of our economy, it is too late.


Times were good and our property values rose between 7-15% and now we are paying another price. The lending situation is another separate deal. Now our home values shrunk adding to deflation.

The lending institutions bought up so many bad loans when times were good to raise their value and execs got huge multi-million dollar bonuses along with the stocks increasing(I bet your 401k's and pension funds were heavily invested in these banks LOL). Don't forget many of these loans should never been approved. Investments in these institutions were global investments from all over the world. Now seeing the feds lowered the prime, you will see much more borrowing between the banks and some people actually looking to buy a new home. We are paying for everyone's greed including our investing in these institutions. Some mortgages were bought and sold countless times.
 
Retailers and manufacturers are taking lower margins which again adds to deflation but supplies purchased domestically(such as steel for example, remain rather high). This makes purchasing foreign supplies and products cheaper. It is kinda a trickle down effect.

Although some say we are in a recession, we actually are not until this quarters GDP gets released. The definition of recession is 2 or more quarters consecutively of negative GDP(Gross Domestic Product). 2nd quarter was up and last quarter was down .5%. We can safely assume this quarter will be negative so in January it will be 100% official.

Notice gas prices so low??? Supply and demand. There is a surplus so oil has decreased. OPEC has adjusted production again to regulate price. Oil will go up soon but they need to be careful due to the pressure on the automobile industry developing more hybrids and looking to alternative fuel sources.

The reason I gave these common issues is this is a world economy. We cannot develop a automobile that does not run on gas overnight. The global strain would lead to disaster. We need to slow our dependency on oil over a period of time. As far as China, we do not tax our imports in proportion that other countries tax their imports(Namely ours). It is definitely the wrong time to raise any taxes. There is a fine line to what is currently happening. Damned if you do damned if you don't.

Most of these issues are like water seeking its level. Once banks start doing business again, the home values will level(And increase). Once the auto industry balances their business', they will build more cars(New technology). When the dust settles, all will be good. We need to look to the future, not react to the present. THE JOBS ARE NOT COMING BACK! We probably have 1 more tough year ahead. Hopefully not longer.