Where is the US economy headed?

mysteryman wrote:

He is not a conservative and never has been,no matter what he says.

I agreewith mysteryman. In fact, I am pretty sure I said so myself somewhere near the beginning of this thread. If memory serves, I was telling georgeob1 that Bush's policies made no sense in terms of their stated (conservative) goals, and in terms of how conservative economists understand the economy to work. I seem to remember that George and Timber vehemently opposed my thesis, and that I felt pretty lonely making the conservative case against Bush. It's nice, however late, to see some conservatives come around on this point.

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Bush is conservative on a few things, not so on others. I think conservatives hoped he would be more conservative in regard to the budget and domestic affairs. Perhaps George and Timber hoped he would be more conservative in regard to domestic affairs. I think conservatives are pretty happy with his Supreme Court nominees, excepting the Harriet Myers fiasco. Trying to fix education at the federal level, throwing more money at the federal level at various programs like education, no child left behind, and the prescription drug program, have all been big disappointments, much like what liberals would try to do. Mostly Liberals in combination with non-courageous Republicans blocked partial privatization of the Social Security program, which could have help fix the largest item in regard to federal spending.

Agreed, Bush is not truly conservative on all points. I have always known that, and would have said so from the very beginning.

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Bush is a social conservative and fiscal liberal; the exact opposite of what we should have.

As for the US economy, the fundamentals are not looking good. Sure, the Dow is high, but that's meaningless for anyone not in the top 20%.

http://www.rgemonitor.com/blog/roubini/206137

Quote:

U.S. Homebuilder Confidence Drops to 16-Year Low as Housing Slump Persists
Nouriel Roubini | Jul 17, 2007

As reported by Bloomberg today U.S. Homebuilder Confidence Drops to 16-Year Low as Housing Slump Persists. This is all consistent with all the other indicators coming from the housing market showing that the housing recession is getting worse: falling home sales, falling starts and permits, rising cancellation rates, increased supply of unsold new and existing homes, falling home prices, rising defaults on mortgages.

Even the usually optimistic NAR has had to repeatedly revise downwards its forecasts for 2007 sales and is now expecting - as many others do - a year over year fall in home prices, the first time that such a fall has occurred since the Great Depression. At this point the issue is not whether home prices will fall this year. The only issue is how much they will fall.

There are at least four factors that will increase the excess supply of new and existing homes this year and next and lead to even lower home prices.

First, the credit crunch in the subprime market will reduce the demand of new homes by potential subprime borrowers. Goldman Sachs estimated this effect to be as large as 200k less new homes sold this year.

Second, about $1.5 trillion of ARM will be reset this year and next: a rising fraction of these borrowers will be unable to afford the much higher rates on their mortgages and will be forced to sell their homes.

Third, it takes about six months or so for a subprime mortgage deliquency to lead to foreclosure, and the bank taking over the home and then putting it on sale in the market; once that occurs, the supply of homes in the market will increase. Some forebearance will occur but many homes will end up in foreclosure and then sold by the creditors adding to the housing supply glut.

Fourth, folks who bought homes in the last two years for speculative reasons with little equity (the condo flippers) will sell their homes as rapidly as possible as now falling home prices are wiping out the little equity they did have in these homes.

In summary, all four factors will increase the excess supply of unsold new and existing homes and will push further downward home prices. The housing carnage will get much worse before it gets any better.

And the financial fallout of this subprime - and now near prime - mortgage meltdown is only beginning to show its effects in financial markets: not just in the RMBSs, CDOs, TABX and the ABX markets; but increasingly in commercial real estate and corporate risk spreads as the recent market performance of the CMBX, LCDX, CDX, ITRAXX indices shows. Certainly the contagion to the LBO loan financing market is already clear.

The signals are clear, especially w/respect to the 1.5 trillion in ARMs which will reset. Many families are going to lose their homes this year, and many who don't will be scraping to get by for years to come. The ripple effect of this is a sharp curtailing of spending on their part. Not good for our overall economy.

Cycloptichorn

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Cycloptichorn wrote:

Bush is a social conservative and fiscal liberal; the exact opposite of what we should have.

As for the US economy, the fundamentals are not looking good. Sure, the Dow is high, but that's meaningless for anyone not in the top 20%.
Cycloptichorn

So anybody with a 401K or some kind of pension plan or Walmart stock, such as what Walmart employees might have, don't matter?

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okie wrote:

Cycloptichorn wrote:
Bush is a social conservative and fiscal liberal; the exact opposite of what we should have.

As for the US economy, the fundamentals are not looking good. Sure, the Dow is high, but that's meaningless for anyone not in the top 20%.
Cycloptichorn

So anybody with a 401K or some kind of pension plan or Walmart stock, such as what Walmart employees might have, don't matter?

No, they don't. The vast majority of people who have a little bit of money tied up in stocks aren't really realizing gains from this stock market, especially as much of their investment is in long-term format. You are using a misleading statistic to try and dodge the fact that it is the rich who are realizing the vast majority of profits from the stock market. It isn't an indicator of the overall health of the economy.

Cycloptichorn

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Then my advice for poor people is to start buying stock instead of lottery tickets.

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Cycloptichorn wrote:

okie wrote:
Cycloptichorn wrote:
Bush is a social conservative and fiscal liberal; the exact opposite of what we should have.

As for the US economy, the fundamentals are not looking good. Sure, the Dow is high, but that's meaningless for anyone not in the top 20%.
Cycloptichorn

So anybody with a 401K or some kind of pension plan or Walmart stock, such as what Walmart employees might have, don't matter?

No, they don't. The vast majority of people who have a little bit of money tied up in stocks aren't really realizing gains from this stock market, especially as much of their investment is in long-term format. You are using a misleading statistic to try and dodge the fact that it is the rich who are realizing the vast majority of profits from the stock market. It isn't an indicator of the overall health of the economy.

Cycloptichorn

Kind of a narrow minded statement.

How do you know that people who retired yesterday did not realize gains in their portfolio?

How about people who re-positioned their 401K's to take advantage of gains?

Did you see that Merrill Lynch reported record earnings yesterday and their stock went DOWN? Why? People who own a few shares cashed out at the high and repositioned.

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How does one buy stocks if they're living from paycheck to paycheck, using up their savings, plus the equity in their homes?

Magic?

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Another myth, woiyo, that Democrats propagate, is that the rich people yesterday are still the same set of rich people today. People are still getting rich, or at least "making a comfortable living" from having nothing in this country yesterday. That is why millions are coming here, many illegally just to get here.

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okie wrote:

Then my advice for poor people is to start buying stock instead of lottery tickets.

That would be my advice to them as well. But it's immaterial to our discussion.

Cycloptichorn

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cicerone imposter wrote:

How does one buy stocks if they're living from paycheck to paycheck, using up their savings, plus the equity in their homes?

Magic?

Life is a choice, imposter. Thats the beauty of freedom. You are free to buy cigarettes, beer, and buy lottery tickets, if those things mean more to you than a few dollars in the bank.

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cicerone imposter wrote:

How does one buy stocks if they're living from paycheck to paycheck, using up their savings, plus the equity in their homes?

Magic?

Um...They probably don't and are probably in over their head with the House. Why did they buy the house if they could not afford to pay for it as well as all the other expenses associated with Life.

Is it my or your responsibility to take care of the financially stupid of this country?

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woiyo wrote:

Is it my or your responsibility to take care of the financially stupid of this country?

According to Democrats, it is, woiyo.

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Exactly, what good is a bleeding heart if you don't get blood on everything?

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okie wrote:

woiyo wrote:

Is it my or your responsibility to take care of the financially stupid of this country?

According to Democrats, it is, woiyo.

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woiyo wrote:

Cycloptichorn wrote:
okie wrote:
Cycloptichorn wrote:
Bush is a social conservative and fiscal liberal; the exact opposite of what we should have.

As for the US economy, the fundamentals are not looking good. Sure, the Dow is high, but that's meaningless for anyone not in the top 20%.
Cycloptichorn

So anybody with a 401K or some kind of pension plan or Walmart stock, such as what Walmart employees might have, don't matter?

No, they don't. The vast majority of people who have a little bit of money tied up in stocks aren't really realizing gains from this stock market, especially as much of their investment is in long-term format. You are using a misleading statistic to try and dodge the fact that it is the rich who are realizing the vast majority of profits from the stock market. It isn't an indicator of the overall health of the economy.

Cycloptichorn

Kind of a narrow minded statement.

How do you know that people who retired yesterday did not realize gains in their portfolio?

How about people who re-positioned their 401K's to take advantage of gains?

Did you see that Merrill Lynch reported record earnings yesterday and their stock went DOWN? Why? People who own a few shares cashed out at the high and repositioned.

First off, everyone probably has realized gains in some form or another. Realizing substantial gains, as many conservatives would like you to believe is happening, has been reaped by the rich. The DOW reaching a record level 53 times this year has not made me rich, FAR from it, and I probably have more in my 401k now than 60-70% the population does based on articles I've been reading.

Besides, 401k gains are nice, but it's not like that money is going to be in my pocket helping me pay bills, go on vacation, etc. These gains are not helping people get by or making anyone's lives any easier. They're nice to look at on my quarterly statement, and they'll be nice in 40 years when I can retire, but right now they mean squat.

Most people don't even invest to get their company match much less reposistion their 401k portfolio when a single stocks earnings report comes out. So that statment applies to VERY FEW people.

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The poorest people in America have more of some amenities than the well to do in Europe.

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okie wrote:

The poorest people in America have more of some amenities than the well to do in Europe.

Please, prove that one.

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okie wrote:

The poorest people in America have more of some amenities than the well to do in Europe.

Oh really? Which amenities would those be?

And even more so, I see that you are caught up in the silly 'stuff=good life' argument. Modernization and the willingness of China to pay people next to nothing to work in a factory have made cheap crap available to anyone who wants it.

How many times do I have to point out to you, though, that this is meaningless when it comes to measuring wealth? It isn't how much stuff you have, it's how much security you have. There's absolutely no way that the poorest here in America enjoy 1% of the economic security as those in Europe who are well-off. A ridiculous statement that shows you don't understand what wealth really is.

Cycloptichorn

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woiyo wrote:

okie wrote:
woiyo wrote:

Is it my or your responsibility to take care of the financially stupid of this country?

According to Democrats, it is, woiyo.

According to Republicans, it's our responsibility to take care of people in other countries (Iraq) but not our own. Explain that one...

Cycloptichorn

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Where is the US economy headed?

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