This was the first thing I saw when I logged into Yahoo! today to check my email.
They made it possible. If they did not offer zero downpayment,false appraisals, fake earnings statement,it never would have happened. How does a customer make this happen. If it is offered and they take it ,how are they to blame. They were told they had a way out of the bad life and were sold a way out. What is wrong with these people.?
Rather, a long period of slow growth. Face it, the USA is broke-yet (paradoxically) the people whom we owe money to (the Chinese, Japanese, Koreans, Germans) would be committing suicide if they stop lending us money. They need the US market-as they have assisted in destroying our manufacturing base, they have no one else to sell their wares to. Mercantilism cuts both ways-for the past 50+ years, the USA kept the world out of recession-buy opening our markets. This allowed the chinese to amasss a 1 trillion$ cash hoard-which will rapidly depreciate in value, if the dollar collapses.
I see our recent wars in the ME as eerily similar to the UK’s war against Egypt in 1957-the British forces easily beat the Egyptian army-but the bank run on the pound forced an end to the war. The elite that runs the USA are immune from recession-George Bush hasn’t a clue-he wouldn’t notice a recession if it hit him over the head! They probably welcome the increase in gasoline prices-fewer peasants on the roads, and no commoners crowding “their” beaches on Martha’s Vinyard/Nantucket this summer!
Secretary Paulson has shown the ability to grow when faced with the facts. He said today we need more regulation of the financial institution and their policies. It is nice to see that some of the ,no regulation at any cost, guys can see the truth.
http://www-tc.pbs.org/newshour/rss/media/2008/03/13/20080313_economy28.mp3 This is the audio of the program. Nice to see believers can learn.
It says no such thing. Those statistics are for people with subprime mortgages which are a small fraction of all of the mortgages that are out there.
Oh, thank goodness! I am glad that I misread the article and that the housing situation isn’t as bad as it seems. I still wonder about our economic state but that does make me feel a bit better.
You wont see a depression comming.
US Faces Severe Recession, Feldstein Says Or maybe you will.
The Fed under Bernanke seems far more activist than the Fed under Greenspan. That worries me. Greenspan’s focus was fighting inflation, not using interest rates to prop up economic growth. This Fed seems to be very aggressive at pushing liquidity into the economy. So that means either they are very worried about a meltdown, or they are recklessly manipulating the economy to keep the good times rolling. Either possibility is worrisome.
Can this really be true? Does the global economy really depend on Americans buying junk they don’t need with money they don’t have?
No matter how cynical I get, it never seems to be cynical enough.
What was Greenspan doing then in 2002? I’ve seen the interest rate cuts, done exactly to prop up the economy, blamed for the housing bubble - at least for making it worse.
Bernanke is clearly worried about inflation also, but it’s not clear that this is the main problem. If a significant part of inflation comes from oil prices, it doesn’t seem that the Fed can do much about it. But this mess is new, and I don’t think there are any simple answers. Bernanke may look more activist as a result of the crisis. If Greenspan had been a bit more activist on the mortgage market regulation front, the current mess might not have been this bad.
As for the OP, I doubt we are since we have better economic tools than there were before. But I do feel we’re closer to one than I can remember, even more than the 1979-80 stagflation period.
Today’s bailing out of Bear Stearns by the Fed strikes me as both bad policy and a bad omen of things to come.
They’re talking about a a federal bailout for Fannie Mae. Fannie freakin’ Mae. If that isn’t a sign of big trouble, what is?
It isn’t a particularly unusual hypothesis in economic circles. A lot of people in the know claim that we were slowly starting to come around, but that the fiscal policy & work programs of the FDR administration really tied the arms of the US economy in such a way that caused the depression to extend past WWII.
Excellent, then there must be many cites to back this up. Can I have at least one of them?
It is disputed among economists, but then again, what isn’t? Cite. (Warning: PDF.)
Regards,
Shodan
You want a cite for the fact that a lot of economists feel this way? I learned this in almost every pertinent economics course I ever took. Hell, it’s been talked about extensively on this board in the past, if memory serves. I’d bet a quick google search would make the point clear.
That is kind of a start, but do you have anything that is actually peer-reviewed? Or even cites peer-reviewed sources?
This is such a common theory in economics that asking for such specific cites is rather strange to me. It is covered in Depression Econimics 101, and is similar to asking for cites about the value of Pi. When I searched on “economics new deal” on google, more anti-New Deal hits showed up than vice versa. Milton Friedman was anti-New Deal.
I don’t have quick access to peer-reviewed economics texts, but I’m sure someone around here will step up to the plate.