Where is the US economy headed?

dyslexia
None care about the coporate controlled war-infested- non-intelligent plastitc regime of USA.(SUPER SUPER SUPER power)
But we as rational humanbeing care much about the innocent Americans.
My name is Rama and I have nothing to declare expect my honesty.

Very interesting point, real life. I had no idea the percentage of homes purchased as second homes or investment homes was as high as it was. I heard something on the news the other day, and this link confirms it.

http://www.realtor.org/press_room/news_releases/2006/secondhomesales05.html

"Second Home Sales Hit Another Record in 2005; Market Share Rises
WASHINGTON, April 05, 2006 - Vacation- and investment-home sales both set records in 2005, with the combined total of second home sales accounting for four out of 10 residential transactions, according to the National Association of Realtors®.

The annual report, based on two surveys, shows that 27.7 percent of all homes purchased in 2005 were for investment and another 12.2 percent were vacation homes. All together, there were 3.34 million second-home sales in 2005, up 16.0 percent from an upwardly revised total of 2.88 million in 2004. The market share of second homes rose from 36.0 percent of transactions in 2004 to 39.9 percent in 2005."

So if the housing market is becoming infested with investors more than it has before, then it is only logical that the housing market is going to suffer from that manipulation in the way of runups and dips, perhaps somewhat similar to the stock market, although not quite to that extent. This aspect of this problem reminded me that I know a few people with home investments, and now at at least a couple that I talked to recently that may be left holding the bag on a couple houses. I won't say it serves them right, but once houses become speculative, then such investments can suffer just like any other commodity, and so they should have known that.

I don't disagree. There is no doubt that the speculative atmosphere and overheated market attracted any number of crooks.

I think ordinary caution was thrown to the wind in a hurry to 'get a deal'. Crooks know how to manipulate human nature.

If I did not understand the documents I was signing, I would get somebody (such as an attorney, or someone representing MY interests) to review the documents for me before I signed.

For a terrific rundown on our economy, including the dire straits it is in, see the following, in which the U. S. comptroller general weighs in.

http://youtube.com/watch?v=QxoP_9W6FC8

A corrupt criminal system has no chance to survive.
And USA's system is not above board.

there is now information leaking out that some FED members are quite concerned about a looming "deep recession" in the united states .
if a "deep recession" should take hold in the united states it will be felt around the world , i would think .
hbg

okie wrote :



for a number of years we have spend a few weeks in myrtle beach or hilton head island during the cold canadian winter .
we were surprised right from the beginning about the condos and vacation homes right along the atlantic coast .
we were even more surprised that from november to march most would be sitting empty .
as the years went by , more and more highrise condos have been springing up there . having spent a few weeks on the atlantic coast of florida , we saw similar developments .
some retired americans from the colder regions - such as chicago and new york state - spent the winter months there , renting a condo at pretty reasonable rates .
we would usually rent a fully equipped two bedroom condo with access to a health club for about $1,000 a month - multi-months rents were even lower . these units would rent for as much as $150-200 a day during the high season .
americans would tell us that these second homes were often purchased for investment purposes . they also said that the interest costs of these condos might entitle the owner to tax deductions - so all-in-all could be a very smart investment .
i now see that at least some of these units are being sold at bargain basement prices .
an ad in last week's NYT showed vacation homes in vero beach that had an original price of $20-25 million and had been reduced by 50% were now being advertised for a price BELOW 50% . i guess this might be the time for some people to buy - but not for yours truly :wink: .
hbg

The economy is supposed to direct money to the most useful purposes, make the best use of social assets. When we started plowing multiple tens of billions into homes that are rarely used we have evidence of a problem. The second and third home fad took off about a decade ago, because tax law encouraged it and because real estate speculation became very profitable. Speculators suck much out of the economy, and at least with real estate speculation the little guy was able to take part in the gravy train unlike most other domains for the endeavour, but it should have been clamped down.

Most of those who speculated on real estate used to brag they were making hundreds of thousands of dollars; most are now dead broke. And most of those folks can't even find a job at McDonalds; no skills.

That old saying, if it's too good to be true, it usually is. Unfortunately, even good honest, hard-working, folks got caught up in the buy frenzy, and now millions are losing their homes, because they got sloppy about their personal finances.

ci, I agree, and to take the logical conclusion a bit further, it makes no sense to bail this sort of behavior out, otherwise the government would essentially be encouraging more of it.

Perhaps, a "recession" is nothing more than a "correction," which is a necessary and healthy thing in the grand scheme of things, not only for a market, but also the economy.

Okie
most of the idiots who had allowed this another kind of war had met in NY
today= yesterday.
Barbaric corporate culture pure and unadulterated.

Okay, so Wachovia is a NC bank, not NYC. But they tried to play with the big guys by paying something like $20 billion for a CA mortgage brokerage firm a couple of years ago. Bad idea.
Wachovia lost something like $400 million in the 1st Q and is looking for someone to pump in $8 billion. I am looking for Suntrust or Bank of America to take them out.

The Wild Bird store in our neighborhood closed down for good. I hope the wild birds stick around. I mean, REALLY can the economy be SO bad as to close a Wild Bird store?

From Krugman: Some of the causes of poor economic performance since 2000 are probably beyond any administration's control. Raw materials were cheap in the 1990s, but in the years ahead the rise of China and other emerging economies will place increasing pressure on world supplies of oil, copper and so on, no matter what the next president does.

Yeah, but, Bush didn't help our economy one bit; his Harvard MBA degree didn't do any good. Bush created the biggest national debt, got us involved in a war that has no end game that's costing us 2.7 billion every week, and he wants to "stay the course." Leave it for the next "sucker" who thinks they can fix what's over 90 percent broken. The next president will require more than good advisors to overcome the disaster Bush created for our country.

That's it in a nutshell. CI. Pretty bleak. I just think that all of these campaign speeches make me sick because none of these people have a clue what they're talking about as far as fixing what's broken in this impending economic disaster.

Ragman
Please excuse me.
If only NY or NO we all can save the humanity.
But this rotten uncontrollered barbarism spreads all over the globe.
Ask anyone who begs for pttiace around the city you dwell.
Sorry for my adjectives..
Change should not be a slogan to pick up another doll to continue this nonsense.

I have no clue about what you're writing. I will no longer respond to your comments. They just make no sense at all to me.

And, you are off-topic. How does this relate at all to US economic situation? If you so dislike USA and its policies, open up your own thread.

Thanks
Vanakkam
namesthe
nandree.
A2K is to educate the ignorant participants and enliven the forum.