Well? When do you think this economy is going to start turning around?
Depends, of course, on what you mean by “the economy.” Some parts have already started to turn around. Some are looking a little troublesome.
The housing market is a little worrisome… unless you are looking to buy a home.
I would say that you have over a year or more to go. You see, IMHO, it hasn’t bottomed yet.
Using the stock market as a gauge, you need capitulation first. But as long as the market is as overvalued(based on lack of earnings) as it is, you need to have some serious downs.
And, to echo others, housing is the last holdout. But, watch out. It could fall at any time. Nay, it will.
So, let’s say you go get the house of your dreams right now, because you can get a mortgage that is so low you just can’t pass it up. Great. But make sure you aren’t paying more for that house than you could get out of it in a down market 2 years from now when your company transfers you to some other town.
Sorry to sound so negative. But we’re in a Bear Market, and it ain’t even close to bottom. Comsumer spending is keeping things going for now, but the debt level of consumers is so high, I shudder to think what is coming. Record personal bankrupcies. Already started. Just you watch.
Pull in your horns, don’t take on debt, save.
This from a liberal.
The current asset valuations across the board (stocks, real estate, etc…) are far beyond what is sustainable.
They are all based on expected future earnings or capital growth.
It’s a house of cards, and it will come back to Earth at some point.
Probably 50% off the Dow, and the housing market in major cities.
The spark could be another (bigger) terrorist attack, but it is not necessary: it will come to a head all by itself eventually.
I recommend being mostly in cash, or if you must be in real estate buy acreage not a unit.
The depression will last a long time, and those that can ride it out will emerge as the next generation’s wealth set.
Oh, sorry. I’ve got it here in my back pocket. Let me just… Oh, damn. Left it in my other pants.
Looks like a double-dip to me.
Any investment that does not show negative growth over the next five years seems tempting to me.
I completely agree with the house of cards scenario. People have over-extended themselves with endowment-backed mortgages to pay exorbitant house prices in a climate of low interest rates. The housing market in major cities has felt very frothy over the last year, a worrying sign of the end of a trend. There is precious little equity to withstand a retracement of prices. There is precious disposable income to withstand a raise in mortgage rates (admittedly not imminent).
I think the spark you mention is more likely to be President Bush’s desire to finish his father’s work. How confident will the in-debted American consumer feel if the US becomes embroiled in a drawn out conflict in the Middle East? For how long could the shaky US economy bear oil at $35-40 per barrel?
The dust from the bursting of the internet bubble has a long time to settle. See you on the other side, BamBam!
Which parts would you say have been turning around? And what of the high-tech sector, which has been hit particularly hard?
High tech is going to turn around when one of two things happens. First, some new compelling product makes people buy. $1,000 PCs and the Internet did it last time. Second, the current equipment sitting in server farms gets obsolete, forcing companies to spend capital.
Consumer PCs have gotten into an arms race. Who, unless they are doing heavy gaming or heavy math or CAD works, really needs a 2 GHz PC?
Excellent question, JThunder. I’m also curious as to what people mean by “the economy.” Is it the stock market? Unemployment rates?
Honestly, I think a lot of it depends on where you live. In my neck of the woods–western North Carolina–the economy seems to be getting worse, not better. Manufacturing jobs are dying out, leaving lots of people unemployed. (North Carolina now has the third highest unemployment rate in the U.S.) Tourism is the other big mainstay of WNC’s economy. Unfortunately, tourism=low-paying service sector jobs. I have a master’s degree, and I’m making $8.50 an hour doing temp work. Housing costs are also rising, since so many people come here to retire or buy vacation homes, driving up property values.
In other parts of the country, it may be different, but down here the economic outlook isn’t too bright for your average Joe.
We’re going to get killed when the housing bubble goes pop in about 18 months. Check with your favorite sensible economist.
There’s been almost no hourly productivity increase in the last 20 years.
Confidence in the stock market, is, how can we say, low.
The government is now predicting deficits until 2010. Any bets on whether they’ll even make that date?
There’s overcapacity in all of the manufacturing industries.
Currently, over-confident consumers are keeping us afloat by spending beyond their means. Look for 10-15% unemployment after January 1st, The housing bubble to break by the end of 2003, and no recovery until 2004, at the earliest.
I don’t think any of the above is even pessimistic, unfortunately.
When Bush shuts up about it for at least one month.