General Economic Conditions Continue to Deteriorate

[ebsprintin]

Phil,

I'm going to wait for your 2008 recession prediction to come true before I try to process your next iteration of doom and gloom.

eb

[springrivergroup]

AND NOW THIS

Here is a Statement Of FHFA Director James B. Lockhart.

"Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States.

Enterprises will be allowed to grow their guarantee MBS books without limits and continue to purchase replacement securities for their portfolios, about $20 billion per month without capital constraints."

My coment,

The debt of the US just doubled in ONE DAY to bail out the "investors" in these bad debts and we get to pay.

The stock holders (read IRA and retirement plans) just lost everything and the bond holders (Russia and China) will get paid fully. Would have been better for the people in the US if they just would let them go chapter 7.

[greg334]

Well I think it is time the US government gets out of the housing and banking industry all together. The Dems won't do it. Instead they pass the Monkey protection act of 2008 and will have 15 more days in congress.

[LDB]

Things are bad right now. Nobody sensible can deny it. The problem is that rather than acknowledging things as bad we've got large numbers, either due to an agenda or accepting too much of what is presented by those with an agenda, saying things are BAD! Just as global temperatures follow a sine wave, so do economic results. We are in a downward part of the wave at the moment but we're not at the doom and gloom level some would suggest.

[ATeam]

Phil,

I'm going to wait for your 2008 recession prediction to come true before I try to process your next iteration of doom and gloom.
eb

The National Bureau of Economic Research Business Cycle Dating Committee has become the accepted entity that dates the beginning and end of recessions. This is generally done well after the fact.

The former head of that organization, Martin Feldstein, has been saying in recent interviews that he believes the current recession started in late, 2007 or early 2008. When the current recession is officially dated, I believe the Bureau and Feldstein will agree.

Note that the NBER does not follow the popular definition of a recession as two consecutive quarters of negative GDP growth. Instead, it works with the benefit of hindsight and weighs numerous factors that are more comprehensive and nuanced than a simple GDP track.

Feldstein is one of the people I listen to when he speaks about general economic conditions. I don't do the kind of research he and others of his ilk do, but I respect it and base many of my opinions on their work.

[ATeam]

springrivergroup raises an important point. We saw today the government effectively nationalize much of the U.S. mortgage market. The power and scope of government has been increased by an order of magnitude. There are in governemnt big-government advocates and small-government advocates. Today, the big-governemnt advocates received a huge gift from the Bush administration.

[Falligator]

Today, the big-governemnt advocates received a huge gift from the Bush administration.

And if ya'll remember it's exactly what the Bush adminstration campaigned against during the first election. Oh....another lie from the republicans. Well....everything that Bush has said during the first campaign has been a total lie. Just another example of what we'll see out of our current presidential candidates.

[davekc]

Without a doubt the economy is stressing. But, it has a long way to go before we get to the conditions of 10 years ago or the wonderful Carter years.

[LDB]

Martin Feldstein, has been saying in recent interviews that he believes the current recession started in late, 2007 or early 2008.

recession: noun, An extended decline in general business activity, typically two consecutive quarters of falling real gross national product.

Unless Mr. Feldstein has information never made public we have not had two consecutive quarters of decline and are not in a recession. Further, with as absolute and as simple a definition as that, it is foolish of him to suggest a recession would not be identified until much later. GNP numbers are usually available within days of the end of the quarter. There would be no need to wait any longer than 4/15, 7/15, 10/15 or 1/15 to know and announce a recession and you can be positive the party out of power would not wait to announce it. Again, we are in bad times but we are not in BAD times and will not be unless people continue to lap up the leftist media renderings and thereby cause the situation.

[greg334]

Phil,
This was more about the congress with a knee jerk reaction. Everyone is happy except the home owners who are really hurting.

I just finished reading a draft of an analysis on the bail out and here is who it is helping;

Home builders

Home speculators

Home sellers of large dollar homes

Investors

Who it don't really help is the people who are struggling, there is less help for them than expected. Like the other bail out, the lenders are the ones who win at our expense.

Buffet, who is really out of touch with reality said this morning that the government has to do something and then dropped a comment that it is because the investors are hurting. SO this costs us $200 billion plus to help an industry that is pretty much inflated and needs to adjust itself.

The analysis closed with this "... this move will in effect create another bubble and may crash harder in the future...."

As for the economy, more doom and gloom. Bad? Leo come to Michigan. See what the country will enjoy in January under the Messiah.

[dabluzman1]

There are programs in place to help the home owners.
Speaking from personal experience, my mortgage company, in May of 2008, offered me
a "modification" to my existing loan.
This program re-evaluated my position, home value and market.
No fees were involved.
My loan "paper" was rewritten to the current market which was over 3.5% less than
my existing loan.
Net result, my home mortgage droped $200.00 + / month.
How did I receive this consideration?
I ASKED!!
Mortgage companies do not want your house. They want you to make payments.
One of the biggest concerns of mortgage companies is the "ostrich" effect delinquient
mortgage owners take.
Bury your head in the sand and hope it all goes away.
Being prepared in any economic condition is also knowing options to better your stance.
Asking for a better program isn't a negative if it enhances your bottom line.
Pride cometh before the fall ( it is the end of summer you know ).
Seeking relief when the means are available is smart not begging for charity or sympathy.

Ask your bank or mortgage company what they can offer you.

Be informed.

[greg334]

There are programs in place to help the home owners.

I know and glad you got to do that. The point is that not everyone has this option.

I know of a few families who are now out of their homes, one of them never missed a payment and was in the house for 19 years had only 11 years left on the loan. She was dumped by the lender while she was working with them to pay the increases they said they wanted to keep her house but because the lender could write it off as a bad loan, get the loan amount and then get the remaining interest from this bailout, they foreclosed - she as officially evicted yesterday.

All of this is the 1920's all over again with government assistance to take homes.

[layoutshooter]

Just more socialism. Anyone who thinks that Bush or Reagan or anyone since the 1930's is a conservative come speak to me. I have some ocean front property to sell you, cheap, in New Mexico!!! Our government has been trying to "nationalize" our entire economy for as long as I can remember. They just too another huge chunk. When we get "free" health care that will have taken over another 30%. That should give them in excess of 50% of the economy. The end of free markets and freedom. We will then be Marxists all. Then wait for the fun to start. You have not seen poverty or bad times yet, you will then. They will TELL you what you can or can not own. They will tell you were and when to work and what work you will be allowed to do. They can do that, THEY control the economy!!! Just glad I am 57, won't have to put up with it for too long. Only about 25-30 years left at the most, unless I fight, which I will. Either way, I won't live under thier thumb for long. Layoutshooter

[blizzard]

This recession can be a gold mine for an intelligent driver. What I mean here is (someone who has their own authority and can provide outside carrier work for thew big 3)! For instance, as the expediting industry continues to experience a decline in rates and available freight, there is going to be a major shake-up within the industry. As in the case of "The Colonel" a lot of people who have been in the industry for a while have decided to jump ship because it is getting increasingly harder to make money. Well, at least to make the kind of money that an owner operator used to make a few years back. What this entails is that the big 3, along with the various other smaller mom and pop operations, will experience a lack of drivers who are willing to sign on as "company contractors!" This means that there will be an inherently larger amount of freight that is going to be brokered out to "partner carriers as well as independent agents." So, in essence, if you have an eye for business, a good head on your shoulders, along with the ability to adapt, improvise, and overcome; there will be a significant amount of money to be made, even though we are going through an extended period of recession and uncertainty. Remember; only those who can adapt will survive.

[blizzard]

Expediting is not going to stop simply because we are in a recession, and it will get better once the auto manufacturers restructure and come out with more fuel effecient cars. What i'm saying is, for the meantime, the expediting paradigm as we know it will change. Things will be tight and companies are going to have a very difficult time trying to recruit and retain drivers. But despite this, those who own their own trucks and partner up with an infinite number of different companies, will weather this storm. Then the better days will come, freight will pick back up, and rates may even get better.