Where is the US economy headed?

okie prefers to ignore all the negatives in his myopic world of Bush. Hey, our economy is great!

0 Replies

xingu wrote:

Has history taught us anything about what happens to countries that allow a severe gap to widen between rich and poor?

That the poor take up arms and overthrow the establishment.

0 Replies

Home prices fall for 9th straight month

By MARTIN CRUTSINGER, AP Economics Writer
2 hours, 42 minutes ago

WASHINGTON - Sales of existing homes fell by a larger-than-expected amount in April while the median price of a home sold during the month fell for a ninth straight month as the troubles in the subprime mortgage market acted as a further drag on housing.

The National Association of Realtors reported Friday that sales of existing homes fell by 2.6 percent last month to a seasonally adjusted annual rate of 5.99 million units. That was the slowest sales pace since June 2003.

The median price of a home fell to $220,900, an 0.8 percent fall from the midpoint selling price a year ago. It marked the ninth straight decline in the median price.

0 Replies

Thomas wrote:

okie wrote:
Lower prices for homes spurred sales, so it is a success of the free market again, and you can spin it negatively, sure

Okie, just for future reference: what movements in the prices or sales of homes would you to consider bad news?

If prices dropped and sales did not respond positively, then I would say there is no counterbalance to the negative, we have two negatives, which only drives more negativity. I am no economist, but I would view home sales like any other commodity in which the free market finds the right balance of price and demand. To further answer your question, if prices and sales increase or persist, then the economy is good, but as it is with the stock market, there are always corrections, which in the grand scheme of things, are also good. Lowered prices are good if they spur sales, and as I said, it makes homes more affordable. Homes cannot continue to grow in price forever, without any corrections.

Imposter can always find negatives, but as soon as a Democrat is elected, I predict the same news will become positive for him.

Another factor overlooked here is the increasing size of new homes, which are much larger than they used to be. This does not strike me as typical of a terrible economy.

As a person that plays things conservatively, I have always bought smaller homes and smaller payments than I was told I could afford, and this has worked out well for me. I think people are over-reaching and living on the edge, thus if they lose their job or whatever, they might lose their homes. I view this as largely a generational mindset instead of solely due to economic conditions. It is as much a problem of irresponsiblity by this generation of people vs previous generations. More people finance things they do not need nowadays. For example, instead of buying health insurance, they buy a new car every time they can, or a boat, or whatever, and buy the biggest houses they can possibly afford, with every penny of their income spoken for. If anything at all goes wrong with their income, everything goes south for them.

And again, the percentage of home ownership is a positive statistic, and although imposter might spin this somehow to be negative until a Democrat becomes president, I think it is positive.

0 Replies

okie wrote: Imposter can always find negatives, but as soon as a Democrat is elected, I predict the same news will become positive for him.

What an asinine assumption. I have criticized democrats too - even the current congress.

0 Replies

It is a pathetic Congress. I agree with you on that, imposter.

0 Replies

okie wrote:

It is a pathetic Congress. I agree with you on that, imposter.

Would you say it's an improvement over the last one Okie.

0 Replies

Definitely not, but the last one wasn't all that hot either.

0 Replies

cicerone imposter wrote:

okie prefers to ignore all the negatives in his myopic world of Bush. Hey, our economy is great!

Actually it is behaving unusually well. Employment is high; productivity gains continue; corporate profits are high; the stock market is doing well.

The housing market contraction is a natural market correction from an earlier boom. Income disparity is growing, mostly as a result of competitive pressures from the global market. Those who have the foresight and energy to develop needed skills do well, others less so - but that is true everywhere. What we are seeing here is a direct result of the decline of poverty in other parts of the world.

We do face a shortage of key skills entering the marketplace - we don't have nearly enough engineers of all disciplines, from civil to chemical and several areas of basic science face similar shortages. Both issues point to defects in our educational system and unrealistic gaps in the motivation of the coming generation. The rapid social and economic progress of many immigrants is a reminder that opportunity still exists for those who have the will and motivation to pursue it.

0 Replies

georgeob, We all know which side of you isle you favor; that's no secret to anybody reading your posts. Your bias shows every time you ignore the most recent media reports on our economy - including the downward trend in housing prices, and increase in defaults.

Here's a couple of articles from today's San Jose Merc in the Business Section:

"Report: Housing market gets worse." "...in April while prices slid for a record ninth consecutive month, indicating further troubles ahead for the housing market..." "...the slowest sales pace in nearly four years..."

On page 3C: "Middle class today less well off than parents." "CENSUS DATA SHOWS AMERICAN ECONOMIC MOBILITY DECREASING." "WASHINGTON (AP) - The part of the American dream that says a man's children will be better off than he was has become just that - a dream, not reality..." "A generation ago, American men in their 30s had median annual incomes of about $40,000 compared with men of the same age who now make about $35,000 a year, adjusted for inflation." "That's a 12.5 percent drop between 1974 and 2004..."

Wake up and smell the coffee, georgeob. You might learn something valuable.

0 Replies

georgeob, You, like your fellow conservatives, fail to recognize simple macroeconomics. Our economy's growth depends on consumer spending which makes up 70%. When consumers have been spending the equities in your homes to keep up their spending, and the prices of those equities losses value, what do you think is the consequence? Do you understand anything about our ecomomy? Do you understand anything about the problems created by the sub-prime lending to purchase homes most people couldn't afford to begin with? Don't you recognize the increase in defaults and bankruptcies?

0 Replies

cicerone imposter wrote:

georgeob, You, like your fellow conservatives, fail to recognize simple macroeconomics. Our economy's growth depends on consumer spending which makes up 70%. When consumers have been spending the equities in your homes to keep up their spending, and the prices of those equities losses value, what do you think is the consequence? Do you understand anything about our ecomomy? Do you understand anything about the problems created by the sub-prime lending to purchase homes most people couldn't afford to begin with? Don't you recognize the increase in defaults and bankruptcies?

cic,

I dont know about the users here.. but to some.. If you dare show them the economy is built on sand they will label you as a pessimist or unpatriotic,,..

truth is.. if I borrowed a million dollars every month my finances would be great too.. except sooner or later all those bills come due. Its the same thing with the nation. we get poorer every single day by about 3 billion dollars..

0 Replies

Richard S, I'm not a pessimist, but a realist. I try to read up on our economy daily to learn the strenghts and weaknesses. Depending on who's writing the article, their bias shows one side or the other. I have also studied economics in college, and have a pretty good feel for how our economy performs - and that includes how the stock market reacts to different BS presented by all the financial pundits day-to-day. Today, it might be the "inflation and interest rates." Tomorrow might be the "unemployment rates and financial reports from the big companies." Trying to keep up with the BS and the swings in the market can make anybody dizzy. I look at the long-term trends, and what I see is the feds play on the short-term interest rates by quarter percentage points is a bunch of huey. There's too much deficit spending by both consumers and the federal govenment to control inflation. On top of all that, Japan and China has been buying those excesses by owning most of our country's bonds. Do you know what will happen if they suddenly released those bonds on the open market? The US dollar will sink to the bottom of the ocean.

Those who continue their rhetoric about our economy is doing just fine just doesn't understand macroeconomics.

0 Replies

cicerone imposter wrote:

georgeob, We all know which side of you isle you favor; that's no secret to anybody reading your posts. Your bias shows every time you ignore the most recent media reports on our economy - including the downward trend in housing prices, and increase in defaults.

Here's a couple of articles from today's San Jose Merc in the Business Section:

"Report: Housing market gets worse." "...in April while prices slid for a record ninth consecutive month, indicating further troubles ahead for the housing market..." "...the slowest sales pace in nearly four years..."

On page 3C: "Middle class today less well off than parents." "CENSUS DATA SHOWS AMERICAN ECONOMIC MOBILITY DECREASING." "WASHINGTON (AP) - The part of the American dream that says a man's children will be better off than he was has become just that - a dream, not reality..." "A generation ago, American men in their 30s had median annual incomes of about $40,000 compared with men of the same age who now make about $35,000 a year, adjusted for inflation." "That's a 12.5 percent drop between 1974 and 2004..."

Wake up and smell the coffee, georgeob. You might learn something valuable.

But in my earlier post I did explain most of the very points you made here. I suspect the problem is either you paid no attention or you just don't like the explanations.

Do you believe the housing market will continue its decline indefinately? We had an earlier decline in the early '90s, and it was followed by a boom.

The articles about reduced economic mobility and the salaries of the average employed male are superficial and misleading. Why do you believe the reported salary survey included only men? The answer is that had women been included, there would be no story. Average salaries increased during the period. The massive entry of women into the workforce merely redistributed the higher paying jobs.

If the U.S, dollar declines significantly, then we will see a resurgence of U.S. manufacturing as imports decline and U.S. products become more competitive in the export market.

0 Replies

goergeob: Do you believe the housing market will continue its decline indefinately? We had an earlier decline in the early '90s, and it was followed by a boom.

FYI, I never made such a claim or even suggested such a thing. That you can use your imagination to come up with such a foolish question only proves my point that you have no understanding of macroeconomics.

The articles about reduced economic mobility and the salaries of the average employed male are superficial and misleading. Why do you believe the reported salary survey included only men? The answer is that had women been included, there would be no story. Average salaries increased during the period. The massive entry of women into the workforce merely redistributed the higher paying jobs.

Your generalizations are fine, but you don't show evidence to the contrary. show us evidence, not generalizations about "men only." My observation, which may be wrong, shows that with the increase of women in the workforce, they have increased household income, but the purchasing power of all have decreased.

0 Replies

georgeob, I base my conclusion on several factors: 1) six million more Americans are now without health insurance since 2000. 2) more middle-class families are falling into poverty and depend on food banks and shelters, and 3) most consumers now have negative savings.

0 Replies

A funny, if not tragic" way for household income to have increased because women are now working more.

0 Replies

Well, duh, what did you think would happen? ;p

Having a norm towards two-income households has definitely had an effect on wages in the middle class and the poor. An employer can simply offer significantly less than is required to raise a middle-class family, because he can be confident that the other breadwinner in the household will make up the difference. Kind of screws the single-worker family (especially single mothers!)

Not saying that having women in the marketplace is bad. Certainly we have a higher output, what with access to a significantly larger labor force, and there's advantages there too.

0 Replies

cicerone imposter wrote:

A funny, if not tragic" way for household income to have increased because women are now working more.

True. But that is a comment on social values, not economic ones. We chose to change old social restrictions, and, as a result, created an enormous increase in the work force. We should not be surprised if this, to some degree, suppressed the rise in the economic value of labor. Concurrent declines in the birthrate compensated to some degree. Generally though the economic estimate is that the widespread entry of women into the workforce was a net economic benefit.

My point though was that the articule about the apparent decline of the wages of males in a certain age range was in fact meaningless. it was just another effort to grind a newsworthy story out of something taken entirely out of context in a broader economic analysis.

Our economy is in very good shape.

0 Replies

george: Our economy is in very good shape.

You may continue to keep your blinders on; that's your prerogative. I'm in the "very cautious" group. The simple reason for this opinion is based on the simple fact that our economy is tied to the world economy, and there is not one economist who can predict what will happen in the short-term or long-term.

0 Replies

Where is the US economy headed?

Related Topics

Quick Links

My Account

able2know