Posted on 04/13/2009 6:36:53 PM PDT by An Old Man
It's been 21 months since two Bear Stearns hedge funds defaulted setting off a series of events which have led to the gravest economic crisis since the Great Depression. No one expected the financial meltdown to hit this hard or spread this fast. The failure at Bear triggered a freeze in the secondary market where mortgage loans are repackaged into securities and sold to investors. That market is now completely paralyzed cutting off 40 percent of funding for consumer and business loans and thrusting the broader economy into a deep recession.
. . . . C L I P . . . .
The economy is now in a downward spiral. Tightening in the credit markets has made it harder for consumers to borrow or businesses to expand. Overextended financial institutions are forced to shed assets at firesale prices to meet margin calls from the banks. Asset deflation is ongoing with no end in sight. Price declines in housing have reached 30 percent already and are now accelerating on the downside. This is the nightmare scenario that Bernanke hoped to avoid; a capitulation in real estate that drags the rest of economy into a black hole. Economist Nouriel Roubini and market analyst Meredith Whitney predict that housing prices will drop another 20 percent before they hit bottom. Nearly half of all homeowners will be underwater and owe more on their mortgages than the current value of their homes. That will increase the foreclosures and push scores of banks into default. According to Merrill Lynch's economist David Rosenberg:
"It would take over three years to achieve price stability (in housing) The problem is that prices do not begin to stabilize until we break below eight months' supply – and they tend to deflate 3% per quarter until that happens. So as impressive as it is that the builders have taken single-family starts below underlying sales, their efforts are just not sufficient to prevent real estate prices from falling further. In fact, even if the builders were to declare a moratorium immediately, that is, taking starts to zero, demand is so weak and the unsold inventory so intractable that it would now take over three years to achieve the holy grail of price stability in the residential real estate market."
The main economic indicators all point to a long period of retrenchment ahead. The slowdown in global trade has hit Germany, Japan, and most of Asia particularly hard. The export-driven model of growth has suffered a major setback and won't rebound for some time to come. With the US consumer unable to continue his debt-fueled spending spree, surplus countries will have to develop domestic markets for growth, but it won't be easy. Chinese workers save 50 percent of what they earn and German workers already have a comfortable life without increasing personal consumption. Higher wages and lower interest rates can help stimulate demand, but cultural influences make it difficult to change spending habits. Meanwhile, the economy will continue to languish operating well below its optimum capacity.
Read more at the Market Oracle.
Yep dresses from the patterned flour sacks, although she bought the chicken feed six 50 pound sacks at a time so she had enough material. Alot of the flour sacks were made into sheets with a flat felled seam nobody would make today without a computerized sewing machine. When they wore out, they turned into pillow cases and when those wore out they became nice soft handkerchiefs, and finally, clean white clothes before the day of band-aides.
Never felt poor. We had a huge garden and did very well.
That reminds me I need to make a trip to the garden store for some seeds and such. Trouble is, the soil here, what there is of it, stinks. Very shallow layer of clay over a soft crumbly rock base.
Might have to move back to my Mom's house, she'd not using it at the moment, where the topsoil is several feet deep, and which had never felt the plow before it was turned into '50s suburban housing. (it did feel the plow or at least the disk and rotortiller, after we moved in, I even ran the tiller some years, as well as planted most of the garden (Dad insisted on doing the tomatoes and peppers himself). I know about the non plow part, because my Dad had hayed the area with his uncles back before WW-II, and knew the history of the area. Or better yet, up to my mother-in-law's farm, which she and her sharecropper are using, but not living on. It's already got a couple of good garden spots, a nice shelter-grove of mixed hardwoods, and where the deepest creek bottoms are still in the topsoil, blown in there after the last ice age.
Only bad thing is, when I was up there this weekend, there was still what my wife calls, that ugly white stuff, in the drift areas. Nice clean snow though.
Hard facts but true. We has an nation have been riding high on the hog and have enjoyed feasting off the fat of the land for a long time. With little gratitude for what a miracle this era in history this truly is.
Get ready for a lesson on humility. It is long overdue and only by the grace of a loving God has tolerated our ungratefulness.
_________________________________________—
You are exactly right.
Don’t think so. It was only made to appear that way temporarily in order to usher Zero into office. It will miraculously come back quickly. Watch.
That's my story too. It took me nearly 60 years to realize that our family had little or no money when I was a child. However we had everything necessary for a wonderful childhood, and a great education in how to survive adverse times.
Don't bet the farm on that! My spies tell me it will be much longer than most here believe.
I did have one mishap-in about the 7th grade a farm kid who was as shy as I was (at that time) came to school wearing a shirt that exactly matched my skirt. We both knew where his shirt and my skirt came from. He never saw my skirt (very well made as was his shirt I might add) again and I never saw his shirt again. Yes of course I wore it, but not to school. And yes one does need to gain some years to really appreciate what is good.
You and I were fortunate.
Well, try telling that to some in these small towns in Texas. You’ll be shown the door. They simply do NOT believe it is going to affect THEIR town. And, they mean it. It is real interesting to watch.
One of the hottest places on the face of the earth is ...ready for this? Tulsa, Oklahoma. With the lakes and the heat it can get mighty uncomfortable.
Just know this, no matter how hot it is I’d trade places with you any day compared to where I am.
What area of the country are you in?
We plant every year for the last ten or so years. Tomatos, peppers, onions, strawberries. This year we added corn, watermelon and cantaloupe. Plan to grow a bunch, eat what we can and sell the rest. Have a neighborhood coop going where we trade fish, wild pig, venison, vegetables, yard work, carpentry, plumbing whatever. We live on a dead end street and every other house is well armed with lots of ammo and lots of know how. We may have been hit in the wallet hard, but we are not going down, period. During the last hurricane, my kids learned how to wash dishes and clothes the old way. No machines. Making them tend to the crops so they will appreciate what it takes to be self reliant. Taught them to cook by ten years old. Both kids can handle a shotgun well. I am not a survivalist, but I believe in self reliance. If you know how to take care of your self, then you can care for others. If you are a welfare slug, you can’t even take care of yourself. What a waste of a human life. God gave us all talents and it is our job to find out what those talents are and put them to good use to serve our neighbors, not to be a burden on others. Help your friends, pray a lot and believe in your own abilities. No one else will help you and this obambi govt is going to try to crush the self reliant.
Quiet Defiance. Do what you can. Pray to whoever you pray to. God Bless America. Not Amerika.
Would you like a vision of the American future? Picture Detroit... everywhere.
You said — One of the hottest places on the face of the earth is ...ready for this? Tulsa, Oklahoma. With the lakes and the heat it can get mighty uncomfortable.
—
Hmmmm..., that’s where I am now, and I didn’t know that... LOL..
But, I do have to disagree a bit here, at least from the standpoint of some limited experience that I have. I was traveling quite a bit between Dallas and Tulsa, for a while there — and — it always seemed like Dallas was about 10 degrees hotter than Tulsa on any particular day.
Still, both Dallas and Tulsa are too hot for me, compared to Oregon, but I’m here now... so I’ll have to tough it out... :-)
BUT..., Tulsa always seemed to have more tornadoes than Dallas did... LOL..
But we are scheduled for a rise in the markets Tuesday. It is pretty well coordinated if Wells Fargo tells us anything.
The Obammunist is on the tube early to connect his Cuba initiative with economic growth. This just after Goldman Sachs announces a banner quarter.
The curse of Hussein on TV and a falling market will be declared over. His praises will be sung for another week while they work behind the scenes in Congress to socialize the nation.
yitbos
The bad news for us: Chinese save a much larger percentage of their income than we do.
The good news for us: We earn far more than the Chinese.
China vs. USA is like apple vs. orange. The fact that such an obvious egregious error is in here makes me wonder about egregious errors that aren’t so obvious.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.
