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Political & Elections -> Economics, Philosophy and Isms -> Housing (and what else?) In a Depression
Post Info TOPIC: Housing (and what else?) In a Depression
BigG


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Date: Jan 18, 2011
RE: Housing (and what else?) In a Depression
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I think it was Heinlein quoting someone else who noted that economies operate on positive feedback (that is positive in an engineering sense, not a moral or psychological one).

Thus they tend to either oscillate out of control with booms and  hyperinflation, or grind to a halt with depression and deflation.

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pima


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Date: Jan 18, 2011
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How much else is hidden

A lot.

If a homeowner cannot afford their mtg pmt, chances are they aren't going to Lowe's for paint or new wall paper either!

That creates a negative economic spin not only for home improvement, but if they aren't ordering carpet from Mohawk, than the textile world takes a hit, plastics take a hit because GE isn't ordering more since people are keeping their fridges longer. Dupont takes a hit because people aren't ordering Corian. ETC. ETC. ETC.

Look in your home, now pretend you are 1 of the Million that in 2010 who got hit with a foreclosure notice. Where do you start skimping to make the bills?

First, will be the house, no new flowers for the yard, no new curtains, carpet or linens.

Next, no new clothes for the kids. Again textiles just like carpet, curtains, linens, etc.

Next, food. Mc D's is the treat instead of Lone Star. They are forced to cut back staff and we are back to number 1.

Finally, no new car...which combined with housing, it creates the whammy since cars have textiles, plastics and steel like housing. Which means these suppliers need to cut employees to stay a float...go back to the fact that if the homeowner can't afford their mtg, and repeat!

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ImSoAnarchist


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Date: Jan 13, 2011
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Any real asset is better than fiat money.

I like this.

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BigG


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Date: Jan 12, 2011
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Yeah, I am up a few percent also.

But I am expecting an adjustment.

IMO demand for stock, rather than company performance, is driving the market. Any real asset is better than fiat money.

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longprime


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Date: Jan 12, 2011
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Recommended reading:doh

Big Shortblankstare
Too Big to Failhmm
How Markets Fail, The Logic of Economic Calamities.  John Cassidy. 2009winkconfuse

Not holding breath evileye, since after Christmas, I'm up a few percent in the securities market.


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BigG


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Date: Jan 12, 2011
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Houses have declined in value more than in the Great Depression;

http://www.cnbc.com/id/41019790

How much else is actually "depressed" but hidden by self-serving government agencies?

If people knew how bad tings really are, they would panic. Economic statistics have become more "crowd control" than reliable guidelines as to real conditions.

But don't worry, the financial sector is "living large" on the free and reduced rate loans it gets from the federal government and then lends back to the...federal government(?!!);
http://boingboing.net/2009/10/19/investment-banks-bor.html

How can this possibly create any real wealth?

-- Edited by BigG on Wednesday 12th of January 2011 09:33:12 AM

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