Where is the US economy headed?

@hawkeye10,

Just wait until the next housing bubble bursts...

@H2O MAN,

"Just wait?" LOL When do you expect that to happen? 1 year, 2 years, 5 years, 10 years, etc., etc., etc.

You're full of bull **** without anything worth considering; just fear mongering.

You must live a pretty dreadful life; mostly negative. Did your mommy spank you too often?

How did you arrive at "that" conclusion about the "bubble" that you see happening?

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I certainly see no logic behind any prediction of a looming housing bubble, at least in single family primary housing. Apartments and second homes, perhaps. But not for awhile. Five or ten years.
Commercial real estate, as Hawkeye noted, could become more of a problem. Vacancy rates for retail are rising and rents can not readily be raised. And when a shopping center loses one or two anchors the center is often doomed. We have shopping centers with 50% of the stores empty next door to a center with no vacancies.
Many shopping centers are ultimately owned by pension funds and their rates of return are getting squeezed. The danger of investing in something illiquid.
I follow the stock market but am not involved. Are you scaling back, Cicerone? I know, of course, you invest long-term.

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@realjohnboy,

What "I" see in housing in the US is demand and prices increasing. In some areas, they can't build fast enough to keep up with demand.

Even in our area, many homes are selling over one million; something not common even before the bubble burst in 2007.

Unlike many areas, the big high tech companies are building extra office space in Silicon Valley, and I don't see anything to slow that down any time soon.

I'm not into "scaling back" just yet, because I believe our economy is doing well enough to show some growth - although very small by past standards.

It's a crazy, conflicting message, world where we see so many consumers spending money to buy homes and cars, and going on vacations that can cost upwards of a few thousand per family member. Even on the cruises my friend and I go on, they're usually booked to the gills.

Doesn't seem like our economy is hurting all that much, but I also understand that many families have had to cut back on spending. I just don't "see it" from my personal observations, but read it in the media more than anything else.

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@realjohnboy,

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Vacancy rates for retail are rising and rents can not readily be raised. And when a shopping center loses one or two anchors the center is often doomed.

JCP and Best Buy are circling the toilet bowl, sears/k-mart is very unhealthy, and Barns & Noble is shrinking fast and looks about terminal. But what bothers me most though is what is going on in the strip malls.... increasingly it looks to me like the driver of the segment, profitable small retailers, are not generating enough money over costs to even stick around. I talk to a lot of people, and what i hear most is " we are cutting and cutting again, so that we can stick around till the economy finally comes back". It has been 5 years already, when is "just around the corner" going to get here? Retail sales in my town are still going down after inflation, when I go to Chamber of Commerce meetings I see brave stoicism mostly, and fear.

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@cicerone imposter,

Admittedly, Silcone Valley CA is a looong way from Charlottesville VA. But there really are some similarities. In houses for sale the McMansions are languishing still. The houses in the mid-range are back to where they were pre-bust. It is the lower priced "starter" homes where the problem is. If a buyer can qualify for a mortgage, then a pre-existing house can be found. But you may have to wait until a house clears foreclosure.
New construction is stymied by a long time restriction on urban sprawl (which I support) as well as the lack of available construction financing to builders. Even long time builders are suffering.
Rental housing is much needed. In my visits to UVA hospital in the last six months I've encountered scores of folks in their mid to late twenties who can't afford to live here. That is being addressed here as the economy loosens up. But the quality of apartment construction is, to me, suspect. If that is the norm everywhere, it will become an issue a decade on.
And I feel that we are seeing perhaps a widening gap between the haves and have-nots. We will see a new and permanent level of "acceptable" unemployment about double what it was a generation ago.
I appreciate your reading this.

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@realjohnboy,

Quote:

And I feel that we are seeing perhaps a widening gap between the haves and have-nots. We will see a new and permanent level of "acceptable" unemployment about double what it was a generation ago

a lot of people are simply disappearing, they have never worked or have not in a long time and are living off of the generosity of others, but they have no money to spend so we dont see them out of where ever they are living.

even the working are hurting though....the pay for a cook in my town is down in real terms from 5 years ago and is down about 25% after inflation. I know of one operation that almost certainly based upon my conversations with former employees is actively trying to get his top tier people to quit so that he can hire cheaper and not pay unemployment.

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@hawkeye10,

Would you mind saying where you are, Hawk?
I am a retailer. I made a decision to close a couple of stores partly based on the economy but also because of my age. The flagship store is still profitable because I own the building with no mortgage. Sales are flat at best. There are several reasons for that. (True story: Lady comes in and loudly announces that she used to buy stuff from me but now shops via the internet but would I hire her high school kid for the summer and would I like to make a donation to some charity auction?)
I'll probably give the store to my employees someday. They should realize that they still have to come to work and shouldn't plan on buying a new car every year. They can probably do okay for another 15 years.
I think it is simplistic to blame Obama (acknowledging that I am a Dem). The "new norm" is much more complicated than that.

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@hawkeye10,

They just closed a huge Barnes and Noble store in Westgate SC not far from where we live. I've often wondered how they stayed in business, because even when I went inside to browse, there were very few people in the store.

I think big retail chains like JCP, Macy's, and Best Buy are in big trouble, and it's only a matter of time before they close shop. Internet buying is increasing, and Walmart, Sam's, and Costco will continue to grow. Some restaurant chains seem to be doing very well in our area; they seem to pop up new ones all the time.

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@realjohnboy,

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Would you mind saying where you are, Hawk?

olympia wa, and between being the state capital and close to the military base JBLM we are mostly a government town. the state however is down to the number of employees it had ten years ago even though population is up a bunch. the government center in Lacey (same metro area) now has 240,000 sf of empty space that will stay empty for a long time because these buildings were built for government and need massive renovations to make them usable for private industry. however there is a glut of office space in this state Sad

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I think it is simplistic to blame Obama (acknowledging that I am a Dem

agreed

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The "new norm" is much more complicated than that.

what we have right now is not even close to being sustainable....the economy is hollow and is built on a foundation of ever increasing debt...aka sand. also ever increasing numbers of people are hurting and are getting pissed. tomorrow will not look like today.

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@cicerone imposter,

Quote:

I think big retail chains like JCP, Macy's, and Best Buy are in big trouble,

i hear good things about Macy's.....

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@realjohnboy,

I agree; the new norms of many economic issues will be trending lower. With the rich getting richer, they won't be spending enough to create inflation. Interest rates will remain low, but so will the cost of goods and services, because the new norm will require retailers to provide better quality at better prices. Their margins will get smaller and smaller just to attract consumers; competition is going to get nasty.

The only way for our economy to improve is to increase minimum wage, so that consumers can go out and buy more goods and services. With the middle class shrinking, it's going to be difficult to maintain consumer spending to grow our GDP. The majority must have enough spending money to continue buying homes, cars, appliances, and other goods and services.

Just making the rich richer isn't going to do much for any country's economy.

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@hawkeye10,

http://christianhamilton.com/images/Us_debt_per_capita.png

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@cicerone imposter,

cicerone imposter wrote:

Just making the rich richer isn't going to do much for any country's economy.

The political class of both parties are the largest group of rich
getting richer and they are in charge of this countries economy.
That's not going to do anything good for this countries economy.

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@hawkeye10,

Your graph doesn't say much, hawk. How does that relate to inflation?
How does that relate to the rest of the world's economies? What relationship does that have to any country's GDP and interest rates?

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@cicerone imposter,

Quote:

The only way for our economy to improve is to increase minimum wage, so that consumers can go out and buy more goods and services. With the middle class shrinking, it's going to be difficult to maintain consumer spending to grow our GDP. The majority must have enough spending money to continue buying homes, cars, appliances, and other goods and services.

the economy has much bigger problems than that, but this would be a good move to try to preserve what little remains of the social fabric.

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@cicerone imposter,

cicerone imposter wrote:

Your graph doesn't say much, hawk. How does that relate to inflation?
How does that relate to the rest of the world's economies? What relationship does that have to any country's GDP and interest rates?

how long will it take Joe Sixpack to pay off a $180,000 debt? this graph is not complicated to real people.

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@hawkeye10,

Of coarse it does, but some states and communities are increasing their minimum wage, and it has not shown any negative effects from them - as far as we know. San Francisco's minimum wage is $10.55/hour. Their unemployment rate is 6.5% - lowest in the state *(CA is 10.4%).

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@cicerone imposter,

cicerone imposter wrote:

The only way for our economy to improve is to increase minimum wage

That's it!

That's the only way?

Why didn't Obama think of it years ago Rolling Eyes

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@hawkeye10,

When and how do you think each citizen is going to pay $180,000? How does this relate to the real world where most consumers and governments are in debt?

When will "you" be paying your share of that debt? LOL

Come on, get real! It's not about "real people." It's about all debt that most people have, and how they are able to obtain credit and to increase that debt.

Homes in our area costs $1 million plus; that's quite a bit more than $180,000.

Some areas in California are selling homes for tens of millions, and the highest priced home sold in California went for $117 million.

One more thing, hawk, just in case you still haven't figured it out.

Both parties of our government is responsible for the current debt balance; it's grown with almost every president since WWII.

Who do you blame? After all, we're the ones who voted them into office.

What's this about $180k debt per citizen? What's the problem?

Doesn't make too much sense when we're the ones who allowed our government to bring us to this point.

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Where is the US economy headed?

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