Posted on 12/12/2007 6:38:09 AM PST by John Leland 1789
U.S. Economy: Boom, Gloom, Doom!
Don Boys, Ph.D.
We can almost hear the prancing and pawing of the four horses of the Apocalypse and the birds of prey are gathering for a great feast. The vultures soar overhead as they anticipate picking the bones of a once-mighty nation. Melodramatic? Don’t think so. Look at the facts:
The dollar, once the world’s currency, lies limp on the floor and is losing value every day. The stock market zips to record highs then loses a 1,000 points is a few days: up and down like a yo-yo. The world’s stock markets are as volatile and dangerous as a kid standing in a pool of gasoline, flicking a cigarette lighter.
Major industries have packed up and moved their operations to foreign nations after a hundred years in the U.S. Hundreds of major companies have laid off thousands of workers and those workers have discovered that the fast food places only need so many hamburger flippers. Food, gasoline, and heating oil are at all time highs. Our national debt is over 9 trillion dollars!
Gold is at a 27 year high and experts expect it to go to $2000.00 since gold markets seem to have the ability to sense blood in the streets—Wall Street, flowing into Main Street. Personal and business bankruptcies are into the stratosphere followed by credit card debt so high that many are unable to make payments.
Housing bubbles have been popping for months and hundreds of thousands of Americans are either walking away from their mortgages and their homes or are being forced out of them as home values plunge toward the basement. The popping can be heard across the nation and it is only the beginning. Reuters news service reported that Fannie Mae, the largest U.S. mortgage finance company, “revealed its third-quarter net loss doubled from last year as slumping home prices and a credit squeeze drove down values of mortgage securities.”
Furthermore, the credit crisis deepened as the chickens came home to roost--in some of our largest banks! What a mess! The last few years banks have touted that people can “take cash value” out of their homes as if their houses were an insurance policy. Many people with limited income have taken second and third mortgages on their homes to pay monthly operating expenses. Then some dummies even used such money to invest in stocks that are in a freefall. Now they blame others for their financial disaster!
For a few years, young couples have not needed a down payment on a house and innovative financing has put millions of average income people into expensive homes. The sucker loan whereby new home owners started out with a low interest mortgage has now swung around and smacked borrowers in the face with monthly payments doubling! Since hundreds of thousands of homeowners can no longer make monthly payments, the lending institutions have discovered that they are in the real estate business—with plenty of houses for sale—at a greatly reduced price.
Homes are worth less than half the amount they were at the time of the loan and the owners can’t make the payments. The homeowners are weeping copious tears that they didn’t know what they were doing and are demanding that the “government do something to help” bail them out. Of course.
Consequently the banks are hurting bad along with their investors (and the former homeowners). Cutting through the jargon, the world’s largest bank, Citigroup wrote down $5.9 billion in assets in the third quarter because of their easy credit policies. They announced on Dec. 3 that they were going to lay off as many as 45,000 employees! Wachovia, the forth largest U.S. bank, also stumbled during the past few days for the same reason, reporting “a potential $1.7 billion loss on mortgage-related debt.” Credit Suisse Group, Switzerland ’s largest bank is suffering from the same sickness.
It really doesn’t matter whether banks fail because of investors fear of failure or if a depression causes it. The lines could start forming any day at your local banks. One financial advisor said of Citigroup, “If it goes…we all go.”
China made massive waves recently when they suggested that they may get out of U.S. dollars and sell our notes. When that happens, get out of the way because there will be a stampede for the exits and millions of people will be trampled under foot. Middle East nations are making similar noises suggesting that they may not accept dollars for oil. If that scenario becomes reality the Great Depression of 1929 will be considered the dress rehearsal for the Big Event of 2008. A second possibility is the Feds could run all the printing presses day and night and your $200,000 home would be worth $2,000,000. Well, haven’t you always wanted to live in a multi-million-dollar home? But then a loaf of bread might cost you $25.00!
It is no surprise that headlines screamed: “Gloom envelops world markets”; “London bounce fades as bank woes deepen”; “Hundreds of banks threatened by new subprime crisis”; “Asian financial shares hit again”; “Banks drag down markets”; “Markets: values plummet on gloom”; “Recovery in US corporate loans stalls”; “Stocks Fall on Fresh Woes in Banking Sector.” The U.S. and most of the world have experienced financial boom times and are now facing gloom times with fear that it will end in doom times.
A ticking time bomb is going to explode any day.
Copyright 2007, Don Boys, Ph.D.
(Dr. Don Boys is a former member of the Indiana House of Representatives, author of 13 books, frequent guest on television and radio talk shows, and wrote columns for USA Today for 8 years His most recent book is ISLAM: America 's Trojan Horse! His websites are www.cstnews.com and www.Muslimfact.com.)
Check the youtube link on post 11, it seems real enough to me. If I missed something I would like to be enlightened.
“This is the worst economy ever...Democrats.”
Sorry...
Those of us old enough to remember the Carter Years KNOW what a bad economy looks like, AND THIS ISN’T IT!
A few auctions makes an entire market?
I was asked for an example of houses selling at fifty percent off, I pointed out that the link had already been posted. What do you want from me? The housing market is in very bad shape in many areas, refusal to face that fact changes nothing.
Also, your map says you live in SC. SC property is stagnent, it is not losing value. If it is, it’s down 2-3% from a year ago on average in your market (but probably up at least 30% from 5 years ago).
Dr. Boys was specific, not general in his comment. He speaks of a specific type of loan and what affect it had on the home values of some people. And he spoke the truth about it.
If so, he’s an idiot anyway. The loan doesn’t affect the VALUE of the property. The EQUITY, yes. VALUE, no. He specifically said they were worth 50% of what they were, that’s a value indication, not equity.
And if you mean Neg-Am Option ARMs, it’s still nowhere near a 50% reduction in equity.
Got Gold. Bought 15 years ago.
Of late, proper English usage has come to be considered a useless skill. Pay too much attention to English usage on FR and you might be branded a “grammar policeman”!
I am cursed with what J.J. Kilpatrick called an “ear” for the language. While my own usage may not always be correct, errors committed by others are almost always obvious to me; as a result, watching television news has become a painful chore. So-called professional journalists commit an astounding number of usage errors. The fact that our journalism schools are producing Ph.D graduates to whom phrases such as “there is people” seem perfectly correct does not bode well for the future.
I never said property in South Carolina was down a lot, I referred someone to a link to an auction in which multiple houses were sold at fifty percent off, not single home sales. If new homes are being auctioned off at one half of what people had previously paid in the same development that seems to me to indicate a problem with that market. Why are you bringing up all this stuff that has nothing to do with what I posted? Nobody said YOUR market was down.
People asked if MARKETS were down — listing a few homes is not a market. You said housing market was weak where you are. SC is not a weak housing market losing value. It’s flat at worst. You doom & gloomers are hilarious.
You said housing market was weak where you are
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
You must be a member of the Insane Clown Posse. Nowhere on this thread have I ever said the market in my area was weak.
You need help with reading comprehension. It is very tiresome to have to refute things I never said! I cannot be responsible for your overactive imagination!
Lol ...
Since I have just limited language capabilities (3 language fluently spoken (german as my mother tounge, dutch, french and - as you’ve already recognized - english) some people consider, that my education is at least incomplete.
Well it is - since I certianly believe in the concept of life long learning.
But what the heck - I am still more literate then your president.
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