Why are the shopping malls full?

[PaceAdvantage]

Even prior to today, I've been reading where folks go out to the malls expecting them to be relatively empty, only to find them as packed as ever...

I thought people were hurting...I thought this was the worst economy ever...

Don't these people realize they should be home burying what is left of their money in their backyard?

[Burls]

Even prior to today, I've been reading where folks go out to the malls expecting them to be relatively empty, only to find them as packed as ever...

I thought people were hurting...I thought this was the worst economy ever...

Don't these people realize they should be home burying what is left of their money in their backyard?The sales figues will be out pretty soon.
The big question is: How many of those folks are buying and how many are just looking?
It doesn't cost anything to go look.
If you see pictures or clips of crowds in malls, look to see how many are carrying retail bags and how many are just walking around empty-handed.
That can give you some indication of how sales are going.

[ArlJim78]

either;

a) euphoria over the president-elect, our savior

b) irrational exuberance based on the knowledge that congress is going to come to the rescue (again) with another stimulus package.

c) bailout-a-palooza has restored consumer confidence.

d) they're just looking.

[alydar]

Even prior to today, I've been reading where folks go out to the malls expecting them to be relatively empty, only to find them as packed as ever...

I thought people were hurting...I thought this was the worst economy ever...

Don't these people realize they should be home burying what is left of their money in their backyard?

Just wondering if think that the country is officialy in a recession now?

[wonatthewire1]

either;

a) euphoria over the president-elect, our savior

b) irrational exuberance based on the knowledge that congress is going to come to the rescue (again) with another stimulus package.

c) bailout-a-palooza has restored consumer confidence.

d) they're just looking.


Jim,

I don't know if you've gotten your shopping completed for the holiday or not, but if you haven't, perhaps following this link will solve that issue for all of your friends and family!

http://uppitywoman08.files.wordpress.com/2008/11/historicvictoryplate.jpg

[ArlJim78]

Jim,

I don't know if you've gotten your shopping completed for the holiday or not, but if you haven't, perhaps following this link will solve that issue for all of your friends and family!

http://uppitywoman08.files.wordpress.com/2008/11/historicvictoryplate.jpg
OMG!! *shudder*
talk about the stocking stuffer from hell.

well thanks, but I've never been into the whole commemorative plates thing.

[sammy the sage]

well...everybody's having a 50% off sale...

so even if they sell as much or even a little more than last year.... :bang:

What's the REAL BOTTOM LINE gonna be :rolleyes:

P.A...off all people posting here...SURELY you UNDERSTAND simple math ;)

[Marshall Bennett]

Beleive it or not , the shape of the economy doesn't concern a lot of people , if they have a few bucks , they'll spend it .

[Valuist]

Just because there's people there doesn't mean they are spending as much. Case in point: Wal-Mart. The top retailer has handled a bad year better than just about anyone. But what do they say? The average shopper in the 3rd Q of 2007 spent about $110. The average shopper in 3Q of this year? About $45. And they plan on taking shelf space from other sectors and using more shelf space for food, a low margin item. If Wal Mart's margins are going to be hurt, imagine whats going to happen to higher end retailers?

[Steve 'StatMan']

With many people off work on the day after Thanksgiving, they probably don't know what to do with themselves, so if they always went shopping in past years, I suspect they'll do that again. Buying might be different, but they'll spend the day like that used to, at least for this year - and hopefully next year things are better again economywise.

[ddog]

They have always gone shopping, if you can call it that, so , like the mindless drones they are , well, they must shop shop shop.

You know ,the few times I venture into most stores I am amazed at the crap on the shelves, who in their right mind would buy that crap anyway?


Why, what's the purpose, how many crock pots-fuzzy toys-xboxes do you need anyway?

That's what this country has become, nothing but an economy chasing crap.

[PaceAdvantage]

Just wondering if think that the country is officialy in a recession now?Well, let's see. I think we've seen some negative GDP numbers, and job losses are starting to approach traditional recessionary levels...couple this with the psychological factor of all the doom and gloomers talking recession for more than ONE YEAR now, and there you have it!

Didn't stop folks from pushing down the doors and killing a poor Wal-Mart worker just to get into the place...folks are literally killing to spend their money!

[HUSKER55]

That poor bastard got killed so people could buy a product from overseas which will put peolple here out of work except for the underpaid workers at Walmart. You have to wonder if Walmart will pay for the funeral.

Bet they don't. Fact is, I bet they don't even send flowers.

Money is tight ya know.

[The Judge]

late October to buy a Washing Machine no one there sales people standing around nothing this was during the week. When back Veterns Day it was crowded looked like a regular good shopping day. Credit cards not maxed yet lets face it people have mulitple cards 5-6 not just one or two.

[Pace Cap'n]

Folks will always line up to buy low-budget gift items. What they are not buying is big-ticket items for themselves...cars, tv's, jewelery, etc.

AP -
For stores, the holiday season may already be over (http://www.google.com/hostednews/ap/article/ALeqM5gbgt60FivuzuzMw7LL6IGH55G7mgD94MRDV02)

The holiday shopping season begins Friday with a blitz of early morning specials. For some merchants, though, it's practically over already.Piles of jewelry, clothing and electric drills are bypassing store shelves and heading straight to liquidators by the caseload as stores try to save as much cash as they can.

Major department stores and mall-based chains have cut prices up to 70 percent to move out mounds of excess inventory stuck in the pipeline since the financial crisis hit in September and people snapped their wallets shut.

Big moves of merchandise happen every year — but usually after Christmas. This year stores are desperate to shed inventory even before Thanksgiving.

"The holiday season is over. The reason? It just never got started," said Marshal Cohen, chief industry analyst at NPD Group, a market research firm. "How cheap things are doesn't bode well for holiday success."

[sammy the sage]

ah...my man Valuist...always paint/tell the true/whole picture...some people...just can't see the forest for the tree's! :bang:

""The average shopper in the 3rd Q of 2007 spent about $110. The average shopper in 3Q of this year? About $45.

very excellent point!

my business RFLECTS the same drop in spending per sale!

[rastajenk]

I thought having your head served up on a platter wasn't a good thing.

[Burls]

A Related Point:
I wonder if the the economic situation has decreased the average amount wagered per bettor at the horse races as well.
If it has, we should start seeing declines in overall handle.
All of these signal lockout strikes can't be helping that situation.

[slewis]

Even prior to today, I've been reading where folks go out to the malls expecting them to be relatively empty, only to find them as packed as ever...

I thought people were hurting...I thought this was the worst economy ever...

Don't these people realize they should be home burying what is left of their money in their backyard?


PA, let me see if I understand you correctly, are you suggesting that all of this debt the US govt has just created, along with more transfer of wealth out of this country to China (since they're still willing to buy our debt, even though it lacks the backing that once made this country the international haven of investment), are you suggesting that the economy is really ok and that things are fine?

If so:

Let's keep the printing presses rolling and print another 500 billion or so, what the heck, maybe no one will notice??

The avg. American hasn't a clue what has just taken place, and with sarcasm like this thread, you've jumped right along with them.

We will eventually pay a very heavy price for this, the $100k question is "who is the we".

Here's a hint: (our seniors?.. our kids?..... our grandkids?????)
Dont try to answer... I've been watching and reading the top economic minds in the world, and they really aren't sure either, but one thing they will all agree on (maybe not on camera) is that someone WILL PAY.

[JustRalph]

Oops! Sales are up over last years?

http://www.foxnews.com/story/0,2933,459226,00.html

"Under these circumstances, to start off the season in this fashion is truly amazing and is a testament to the resiliency of the American consumer, and undeniably proves a willingness to spend," ShopperTrak co-founder Bill Martin said in a statement.

Across the country, sales in the South were up 3.4 percent from last year while they climbed 2.6 percent in the Northeast as shoppers began scouring store aisles at midnight hoping to snag the best selection on early morning specials.

Patty Saal, 60, of Mogadore, Ohio, began her Black Friday shopping at 5 a.m. when she and her daughters went to a Sam's Club to purchase iPods.

"We're doing fine," she said.

Fifth grade teacher Daphna Stepen, 42, spent Black Friday hunting for deals inside Macy's and at the Limited Too clothing store and headed out again on Saturday. The Chicago resident said she was surprised by the discounts as well as how many coupons she'd received from stores, which helped her save even more money on already marked-down items.

"You can get almost 40 percent off stuff if you work the coupons," she said.

Separately on Saturday, J.C. Penney Co. Inc. said business was strong in its sites across the country as customers responded to sales. Some of the department store's best sellers were smaller electronic gadgets and practical gifts, such as sweaters, boots, coats and luggage."

[Marshall Bennett]

Credit cards work well even when the economy isn't !! :D

[Valuist]

Credit cards work well even when the economy isn't !! :D

That is, until the credit card companies get overloaded with defaults. Capitol One will get crushed.

[sammy the sage]

this link...

http://news.yahoo.com/s/ap/20081130/ap_on_bi_ge/holiday_shopping

explains EXACTLY what's happening...yes...shopper's out in record #'s...but profit's DOWN...because of price slashing...ie...DEFLATION...

[boxcar]

this link...

http://news.yahoo.com/s/ap/20081130/ap_on_bi_ge/holiday_shopping

explains EXACTLY what's happening...yes...shopper's out in record #'s...but profit's DOWN...because of price slashing...ie...DEFLATION...

I know, I know...but look at the bucks spent: 10.6 BILLION! That's a lot of wealth for one lousy day! Just think: Obama could have announced a huge tax hike and all that money plus oodles more could have spread around to the Poor. The poor Poor might have had something to actually celebrate this year. By January we could have witnessed history in the making: The Poor implementing Obama's Bubble Up from the Bottom Economy.

Boxcar

[Valuist]

We'll see what the numbers look like after the holiday season is over. Black Friday is one day, and a day in which retailers have huge sales. It makes sense that many people felt a sense of urgency to buy when everything is marked down 40%. When prices aren't marked down, the consumer will stay away. Considering we're on the road to -5 GDP and 10% unemployment, I'd temper any enthusiasm over this economy.

[HUSKER55]

tHE analyst on msnbc said the preliminary results for sales compared to last year are up 3%.

Go figure.

[boxcar]

tHE analyst on msnbc said the preliminary results for sales compared to last year are up 3%.

Go figure.

Sales are up, but profits will be way down -- probably. Retailers are doing more business, but enjoying it less.

Boxcar

[JustRalph]

my wife's place has been down about 15 percent the last two months........but is up about 5 percent over this same weekend (blkfriday) last year............

[PaceAdvantage]

PA, let me see if I understand you correctly, are you suggesting that all of this debt the US govt has just created, along with more transfer of wealth out of this country to China (since they're still willing to buy our debt, even though it lacks the backing that once made this country the international haven of investment), are you suggesting that the economy is really ok and that things are fine? To slewis and everyone else who comes back at me with the "Do you think everything is fine" line....

NO, I DON'T THINK EVERYTHING IS FINE. (What is this, like the 100th time I'm having to post this?)

What on Earth was contained in my post that made you think that I THINK everything is fine?

[boxcar]

To slewis and everyone else who comes back at me with the "Do you think everything is fine" line....

NO, I DON'T THINK EVERYTHING IS FINE. (What is this, like the 100th time I'm having to post this?)

What on Earth was contained in my post that made you think that I THINK everything is fine?

Another great example, PA, of people seeing what they want to see. Believing what they want to believe. Your words mean diddly. It's all about what the reader wants to read. It's all about his presuppositions.

Mr. Slewis, for your info when someone questions whether or not this is the worst economy ever does not and should not translate into "everything is fine" with the economy -- except, of course, to people like yourself who read an awful lot into people's words.

Boxcar

[ddog]

I'll take a crack at the question,


The utter banality of the posting I suspect leaves some with the idea that either you are totally clueless OR that the post was meant to assert that the economy is really better than some people you read somewhere said it is.

Whoever those people are or whatever they drew their conclusions from???


Who knows ......


And then the usual "crowd" rings in with stats they couldn't support from sources who would know better if they were not shills for one side or the other.

[slewis]

For PA and Boxcar:


I responded to PA's post. Upon reading it I thought it was somewhat sarcastic, which is fine, nothing wrong with some laughter in the midst of this situation we are in, and a little jab at those, like myself, who think things are REALLY BAD and A LOT worse then out Gov't is leading us to believe.

My response was to set the record straight and for PA to clarify what he meant and what his position was.

He did. No problem.

Oh, and Boxcar, if I can get your address, Wal-Mart has some pom-poms and cheerleading outfits with "PA" on the front.
I'd love to send you a set for Xmas, since you feel he so needs your support.
Rah Rah Rah.

PS: This is by far the worst economy ever. Ever ask yourself why they're is no tranparency with this bail-out money. (Cause Uncle Sam doesn't want you to know what's really going on).

[boxcar]

For PA and Boxcar:My response was to set the record straight and for PA to clarify what he meant and what his position was.

As PA essentially stated in his reply to you, he has clarified his position on the economy somewhere around 1,518 times on this forum. Evidently, you missed them all -- again, probably by choice.

Oh, and Boxcar, if I can get your address, Wal-Mart has some pom-poms and cheerleading outfits with "PA" on the front.
I'd love to send you a set for Xmas, since you feel he so needs your support.
Rah Rah Rah.

Save your money. Since you feel the economy is the "worst...ever", you should dispense with your dollars wisely -- where they are the most needed -- where they'll do the most good. Consider taking Reading Comp courses for yourself. Or buying yourself a really nice pair of prescription reading glasses so that you might actually get to see the print on the screen. Or boning on some U.S. economic history with formal courses, etc. Besides all this, I'm not into cross-dressing. Your thoughtless gift would wind up in the nearest dumpster to feed a landfill.

PS: This is by far the worst economy ever. Ever ask yourself why they're is no tranparency with this bail-out money. (Cause Uncle Sam doesn't want you to know what's really going on).

Have you ever asked yourself why times were so much better during the Great Depression? Or are we now in the Great, Great Depression? :rolleyes:

Boxcar

[Tom]

When do the Hoovervilles start to spring up?
Or is it HOOTERville? (Pixely? Uncle Joe, Babes in the water tower? Bobbie Joe?)

I don't think we are anywhere near as bad off as our grandparents/parents were in the 30's. We need to keep positive and not panic. What else can we do?

[Dave Schwartz]

Oooooh! Cheerleading uniforms!

What size?


:lol: :lol:

[WeirdWilly]

Even prior to today, I've been reading where folks go out to the malls expecting them to be relatively empty, only to find them as packed as ever...

I thought people were hurting...I thought this was the worst economy ever...

Don't these people realize they should be home burying what is left of their money in their backyard?

Good to hear other parts of the country are doing well. Obviously, here in Michigan, it is vicious.

I was slow rolling my cab around the Great Lakes Crossing mall in Auburn Hills Saturday. Once upon a time, at 10 am on the Saturday after Thanksgiving, it would be gridlock.

I made it 3/4ths of the way around before I even had a car behind me. No fares from my fishing expedition. I booked a total of $24 Saturday by carrying an elderly couple to and from the Cooley Law School where they are getting free legal assistance.

Behind in my rent here - I think it is time to hitchike somewhere warm and live at the homeless shelter. The Arabs, Chaldeans, and Hindu can have this God forsaken state (Michiganistan?)!

Remember this holiday season - it's good to NOT be WildWilly, or any other Michigander!

[lamboguy]

i am glad to say that there was no traffic by my closest mall today. i went into the mall and found a parking spot right up front. it was great to do my christmas shopping, there were no lines at all unlike last year. i spent less than a half hour in the place this year, last year it took me 2 hours and i wound up late for an appointment.

maybe monday is a slow day at the mall

[boxcar]

i am glad to say that there was no traffic by my closest mall today. i went into the mall and found a parking spot right up front. it was great to do my christmas shopping, there were no lines at all unlike last year. i spent less than a half hour in the place this year, last year it took me 2 hours and i wound up late for an appointment.

maybe monday is a slow day at the mall

The first Monday after Gobble Gobble Day is known as Cyber Monday. It's not particularly known for brick and mortar-type sales; but better known for it's Web-based sales because for many, it's their first day back to work since the holiday and they'll shop online from their offices. For example, my wife's sales today already exceed those of last year --- and she had a tremendous December last year!

Boxcar

[slewis]

As PA essentially stated in his reply to you, he has clarified his position on the economy somewhere around 1,518 times on this forum. Evidently, you missed them all -- again, probably by choice.



Save your money. Since you feel the economy is the "worst...ever", you should dispense with your dollars wisely -- where they are the most needed -- where they'll do the most good. Consider taking Reading Comp courses for yourself. Or buying yourself a really nice pair of prescription reading glasses so that you might actually get to see the print on the screen. Or boning on some U.S. economic history with formal courses, etc. Besides all this, I'm not into cross-dressing. Your thoughtless gift would wind up in the nearest dumpster to feed a landfill.



Have you ever asked yourself why times were so much better during the Great Depression? Or are we now in the Great, Great Depression? :rolleyes:

Boxcar

You know what Boxcar.. 17 yrs on wall st trading billions of dollars a day between the very banks you read about in this crisis I think more then covers a need for any courses you suggest for me in Economics. As a matter of fact, Id say there would be more of a chance I'd get asked to teach the course then take it.
Regarding your (and Tom's ) comparison to the Great Depression and life of our Great Grandparents... Tell the Generation of 2020 (if your still alive) the following:
"Oh, stop your complaining about how we left your generation with this debt, so what that the first 4 month's you work per year goes to paying the little kiddies back in China. Suck it up you spoiled brat. Do you know my father's father never even had a refridgerator!. They had an "icebox" and every day the man would bring ice to keep the food cold. That was the Great depression. They really had it tough, not like you kids. You dont know what hard times are".
Fools.

[JustRalph]

isn't admitting working on wall street like admitting to being a hooker nowadays :lol: :lol:

just kidding............ :lol:

North Carolina..........Concord Mills Mall (North end of Charlotte) as busy as ever...............


You can't find a parking space

[boxcar]

You know what Boxcar.. 17 yrs on wall st trading billions of dollars a day between the very banks you read about in this crisis I think more then covers a need for any courses you suggest for me in Economics. As a matter of fact, Id say there would be more of a chance I'd get asked to teach the course then take it.
Regarding your (and Tom's ) comparison to the Great Depression and life of our Great Grandparents... Tell the Generation of 2020 (if your still alive) the following:
"Oh, stop your complaining about how we left your generation with this debt, so what that the first 4 month's you work per year goes to paying the little kiddies back in China. Suck it up you spoiled brat. Do you know my father's father never even had a refridgerator!. They had an "icebox" and every day the man would bring ice to keep the food cold. That was the Great depression. They really had it tough, not like you kids. You dont know what hard times are".
Fools.


Awww...Cry me a River, will ya? I know what I'm gettin' you for Christmas: a 36" x 24" heavy duty cryin' towel -- hopefully to soak up all your tears and save your little tootsies from getting wet.

Boxcar
P.S. Like PA, I never said the economy is in great shape. In fact, I believe things will get very bad in the near future because there just isn't anyway that a government can keep printing money to cover every crisis and avoid inflation. I'm with Glenn Beck on this one: The next bubble that's going to burst is the Money Bubble, and it ain't going to be pretty. This will be the Mother of all Bubbles!

[Tom]

The first Monday after Gobble Gobble Day is known as Cyber Monday. It's not particularly known for brick and mortar-type sales; but better known for it's Web-based sales because for many, it's their first day back to work since the holiday and they'll shop online from their offices. For example, my wife's sales today already exceed those of last year --- and she had a tremendous December last year!

Boxcar

And today, the first Tuesday after gobble gobble day is known as "Stolen Identity Tuesday." :eek:

[keilan]

Slewis - of all the posters on PA you have it about right, possibly understated.

The shifting of world dominance is happening right before their eyes but they're too busy looking at the PP's at the big A

[boxcar]

Slewis - of all the posters on PA you have it about right, possibly understated.

The shifting of world dominance is happening right before their eyes but they're too busy looking at the PP's at the big A

Well then....if this 'world dominance" is still "shifting" then slewis has it all wrong because it hasn't reached its final destination yet, has it? (Mr. Slewis thinks we've already hit rock bottom, in which case there couldn't be any shifting!) In fact, your "shifting" hypothesis would be more in line with my take on what the foreseeable future has in store for the U.S.

Happy Belated Gobble Gobble,
Boxcar

[ddog]

isn't admitting working on wall street like admitting to being a hooker nowadays :lol: :lol:

just kidding............ :lol:

North Carolina..........Concord Mills Mall (North end of Charlotte) as busy as ever...............


You can't find a parking space


No reason to slander hard workin hookers , at least they provide a service that's worth somethin at least in the short term. You pay for 'round the world , that's what ya get.

These money "traders" , not so much.

You will take note of the lack of a :lol: or a :D or a :) in the above comment.

[delayjf]

The shifting of world dominance is happening right before their eyes but they're too busy looking at the PP's at the big A

I'm not sure there has or will be a shift, China is having their own problems and as oil prices are putting the hurt on Russia and Venezuala, etc.

Or is it HOOTERville?
Did someone say Hooters??? :ThmbUp: First pitchers on me.

[Tom]

Pardon me for not crawling under my bed and cowering.
WE STILL have it plenty good here in the good ole USA. Better even today than most of the world will ever dream about having it. WE didn't get that way by whining and crying. WE got that way by facing our problems and finding solutions. So forgive me if I refuse to cry and give up. Push come to shove, there isn't any thing we need that we cannot produce here at home instead of buying it from someone else. Sure, we are on the wrong page right now, but do we throw out the book or turn to the next page?

As far as world dominance goes, I'll take the home team any day. Even with Obama at the helm, it is still OUR helm. Muck wit us and watch how fast we drop the politics and line up behind OUR president.

[ddog]

shift is the wrong word, i think, a more apt description is a collapse.

You heard it here.

Once we(gvt) are done throwing loans/bail outs whatever at the situation , outside of a major war on the order of WW2, we will be in a country with nothing but "service" jobs and with a barter type economy at the main street level.

You find me a country that has re-industrialized minus war and I will find you a fairy tale.

You don't dismantle that type of society and just snap your fingers and it all comes back.

Just as with basic research and the lack of quality , not quantity education in the sciences,etc. one doesn't just turn that on a dime.

We have spent 20-30 years at least living off the hard work and toil of others before us and worse expected to live in that mode forever.

What have all the free trade/WTO idealogues brought, nothing, all those countries that were to be lifted up , well mexico, china,etc. they were all just running on our debt, what's the great leap there. Instead of bailing them out once every 10 years or so we just do it in little dribs and drabs everyday.

Then their financials are loaded with our toxic spinoffs so we have to bail anyway , since we can't have the crash there , because that would really be a crash here.
We have created a massive complex ponzi feedback loop that nothing can really control or manage.

good luck with that.

This Obama clown with his Clinton-clones is a riot waiting to happen.

Summers should be shot for stupidity and crimes against the country not brought into a policy position.
he was back in 98-99 and since one of the prime movers and shakers in favour of let the Ib be Ib , they know what they are doing.
Him and that snake Rubin.

What a bunch , what criminals.

Giethner is nothing but a civil service HACK, if he's so smart why did all the IB in New York blow up with him "in the room" as they say.

What a sad looking bunch that goof has hauled up there.
All this media singin their praises , what a bunch of morons!


I am not crying for any of you , but you will see in the coming years what the course followed has wrought, i expect more tears at that time , if you are lucky you will still have a towel to sop them up with.

Some just can't/don't want to see the elephant in the room.
Same attitude that got us here in the first place.

As to the throw out the book or turn the page, I never thought I would actually seriously say this, but as to that "book" burn that sucker UP.

As for crawling under the bed, it isn't gonna be an option.

Start a new one.

[PaceAdvantage]

The shifting of world dominance is happening right before their eyes but they're too busy looking at the PP's at the big ALookin at PPs from the Big A....Yeah man, who woulda thunk that would be happening on a site devoted to Thoroughbred racing/handicapping? Sheesh....

[ddog]

Madame Speaker, many Americans are hoping the new administration will solve the economic problems we face. That’s not likely to happen, because the economic advisors to the new President have no more understanding of how to get us out of this mess than previous administrations and Congresses understood how the crisis was brought about in the first place.

Except for a rare few, Members of Congress are unaware of Austrian Free Market economics. For the last 80 years, the legislative, judiciary and executive branches of our government have been totally influenced by Keynesian economics. If they had had any understanding of the Austrian economic explanation of the business cycle, they would have never permitted the dangerous bubbles that always lead to painful corrections.

Today, a major economic crisis is unfolding. New government programs are started daily, and future plans are being made for even more. All are based on the belief that we’re in this mess because free-market capitalism and sound money failed. The obsession is with more spending, bailouts of bad investments, more debt, and further dollar debasement. Many are saying we need an international answer to our problems with the establishment of a world central bank and a single fiat reserve currency. These suggestions are merely more of the same policies that created our mess and are doomed to fail.

At least 90% of the cause for the financial crisis can be laid at the doorstep of the Federal Reserve. It is the manipulation of credit, the money supply, and interest rates that caused the various bubbles to form. Congress added fuel to the fire by various programs and institutions like the Community Reinvestment Act, Fannie Mae and Freddie Mac, FDIC, and HUD mandates, which were all backed up by aggressive court rulings.

The Fed has now doled out close to $2 trillion in subsidized loans to troubled banks and other financial institutions. The Federal Reserve and Treasury constantly brag about the need for “transparency” and “oversight,” but it’s all just talk – they want none of it. They want secrecy while the privileged are rescued at the expense of the middle class.

It is unimaginable that Congress could be so derelict in its duty. It does nothing but condone the arrogance of the Fed in its refusal to tell us where the $2 trillion has gone. All Members of Congress and all Americans should be outraged that conditions could deteriorate to this degree. It’s no wonder that a large and growing number of Americans are now demanding an end to the Fed.

The Federal Reserve created our problem, yet it manages to gain even more power in the socialization of the entire financial system. The whole bailout process this past year was characterized by no oversight, no limits, no concerns, no understanding, and no common sense.

Similar mistakes were made in the 1930s and ushered in the age of the New Deal, the Fair Deal, the Great Society and the supply-siders who convinced conservatives that deficits didn’t really matter after all, since they were anxious to finance a very expensive deficit-financed American empire.

All the programs since the Depression were meant to prevent recessions and depressions. Yet all that was done was to plant the seeds of the greatest financial bubble in all history. Because of this lack of understanding, the stage is now set for massive nationalization of the financial system and quite likely the means of production.

Although it is obvious that the Keynesians were all wrong and interventionism and central economic planning don’t work, whom are we listening to for advice on getting us out of this mess? Unfortunately, it’s the Keynesians, the socialists, and big-government proponents.

Who’s being ignored? The Austrian free-market economists – the very ones who predicted not only the Great Depression, but the calamity we’re dealing with today. If the crisis was predictable and is explainable, why did no one listen? It’s because too many politicians believed that a free lunch was possible and a new economic paradigm had arrived. But we’ve heard that one before – like the philosopher’s stone that could turn lead into gold. Prosperity without work is a dream of the ages.

Over and above this are those who understand that political power is controlled by those who control the money supply. Liberals and conservatives, Republicans and Democrats came to believe, as they were taught in our universities, that deficits don’t matter and that Federal Reserve accommodation by monetizing debt is legitimate and never harmful. The truth is otherwise. Central economic planning is always harmful. Inflating the money supply and purposely devaluing the dollar is always painful and dangerous.

The policies of big-government proponents are running out of steam. Their policies have failed and will continue to fail. Merely doing more of what caused the crisis can hardly provide a solution.

The good news is that Austrian economists are gaining more acceptance every day and have a greater chance of influencing our future than they’ve had for a long time.

The basic problem is that proponents of big government require a central bank in order to surreptitiously pay bills without direct taxation. Printing needed money delays the payment. Raising taxes would reveal the true cost of big government, and the people would revolt. But the piper will be paid, and that’s what this crisis is all about.

There are limits. A country cannot forever depend on a central bank to keep the economy afloat and the currency functionable through constant acceleration of money supply growth. Eventually the laws of economics will overrule the politicians, the bureaucrats and the central bankers. The system will fail to respond unless the excess debt and mal-investment is liquidated. If it goes too far and the wild extravagance is not arrested, runaway inflation will result, and an entirely new currency will be required to restore growth and reasonable political stability.

The choice we face is ominous: We either accept world-wide authoritarian government holding together a flawed system, OR we restore the principles of the Constitution, limit government power, restore commodity money without a Federal Reserve system, reject world government, and promote the cause of peace by protecting liberty equally for all persons. Freedom is the answer.


From Ron Paul speech in Congress from his website.

[JustRalph]

And today, the first Tuesday after gobble gobble day is known as "Stolen Identity Tuesday." :eek:


Man, that's great! followed by "call the bank and cancel my debit card" Wednesday............ :lol: :lol:

[slewis]

Slewis - of all the posters on PA you have it about right, possibly understated.

The shifting of world dominance is happening right before their eyes but they're too busy looking at the PP's at the big A


Keilan,

You know what... I hope I'm dead wrong and that Boxcar, Tom and others can have a real laugh at me in a year or two. I'm in my 50's, had a fun career in the international markets. Now, I've been in the racing business for 10 yrs. I've bred a few, claimed a few, bought a few, was even part of a team that raced a horse in The Kentucky Derby.
I've had lots of action and fun, but can we offer the same for our kids, grandkids, etc.
The path the country is on.. the partisan thinking.... and the way the world is changing against the USA... Not to mention how our own Govt officials have already mortgaged their future.

[Grits]

Smart man, that you are, Tom. ;)
Sometimes, we say far less, yet our words reach a greater distance and carry more weight.
Pardon me for not crawling under my bed and cowering. WE STILL have it plenty good here in the good ole USA. Better even today than most of the world will ever dream about having it. WE didn't get that way by whining and crying. WE got that way by facing our problems and finding solutions. So forgive me if I refuse to cry and give up. Push come to shove, there isn't any thing we need that we cannot produce here at home instead of buying it from someone else. Sure, we are on the wrong page right now, but do we throw out the book or turn to the next page?

As far as world dominance goes, I'll take the home team any day. Even with Obama at the helm, it is still OUR helm. Muck wit us and watch how fast we drop the politics and line up behind OUR president.

[slewis]

Pardon me for not crawling under my bed and cowering.
WE STILL have it plenty good here in the good ole USA. Better even today than most of the world will ever dream about having it. WE didn't get that way by whining and crying. WE got that way by facing our problems and finding solutions. So forgive me if I refuse to cry and give up. Push come to shove, there isn't any thing we need that we cannot produce here at home instead of buying it from someone else. Sure, we are on the wrong page right now, but do we throw out the book or turn to the next page?

As far as world dominance goes, I'll take the home team any day. Even with Obama at the helm, it is still OUR helm. Muck wit us and watch how fast we drop the politics and line up behind OUR president.

Tom,
No one is suggesting to anyone to give up. The lack of optimism I have comes from the lack of leadership of everyone on capital hill, Rep or Dem.
Take the original bailout package.. in order to get it pushed through, politicians found it perfectly ok to pork it up, with things like 150 million in tax breaks for NASCAR. Does this crap ever end? Does anyone in Washington have a conscience? I lost ALL respect for McCain when he endorsed the bail out even with the pork thrown in. Now if your going to run for Pres. on a platform that your going to cut unnecessary spending, wouldn't that be a GREAT time to put you foot down and say NO!
As for Obama, one of his main platforms was his plan to adjust the tax structure by raising those making over $250,000 per. Now whether your against this or for this is not the debate. The problem I have is that AFTER he's been elected, he retracts and says he isn't going to seek that change.
Did he learn something AFTER being elected that he didn't know prior to?
No. He, and all of Washington, just lie and lie and lie and it never ends.
The credibility of our leaders is shamful. This Tom, is what scares me and should all of us.

[juanepstein]

Gov’ts weigh options; US in recession

THE UNITED STATES economy has been in a recession for a year, the nation’s business cycle arbiter declared on Monday.

This development was followed by fresh actions worldwide yesterday to combat the financial crisis, with Australia slashing interest rates, European Union ministers seeking ways to boost investment and consumer spending, and the Bank of Japan moving to ease the plight of Japanese firms squeezed for cash.

Asian stocks tumbled and European markets got off to a shaky start as fear about the economic outlook gripped investors.

Finance ministers from all 27 EU nations gathered in Brussels to discuss a European Commission proposal for governments to spend an extra 1.2% of GDP.

The Reserve Bank of Australia cited the perilous state of the global economy when it cut the benchmark cash rate one percentage point to 4.25%.

Britain, the euro zone and New Zealand will almost certainly cut rates later this week. In addition to more rate cuts, the US Federal Reserve is weighing other responses with its benchmark rate nearing zero.

The Bank of Japan unveiled ¥3 trillion ($32 billion) in new measures to ease the squeeze in corporate funding. The BOJ will accept a wider range of corporate debt as collateral and launch a new scheme to make it easier for banks to make loans.

The global crisis has piled pressure on policymakers to ramp up their response. Fed Chairman Ben Bernanke said on Monday further cuts in the US benchmark rate below 1% were "certainly feasible."

Most of Europe and Japan are already in recession, and the United States has officially joined the club.

The National Bureau of Economic Research declared that the US recession began in December 2007. The current downturn, which many economists expect to persist through the middle of next year, is already the third-longest since the Great Depression.

Hopes that consumers may ride to the rescue appeared to be optimistic.

US post-Thanksgiving sales, which mark the traditional start to the holiday shopping season, looked less dire than feared but that did not stop investors from dumping shares of retailers. Analysts warned that while stores were crowded, the sales growth may have come at the expense of profits and overall demand remained weak. — reports by Reuters

[lamboguy]

not that the past means anything for the future. there has never been a country with a fiat currency that has lasted more than 75 years. the united states dropped the gold standard in the nixon years.

the american citizen's are bailing out the financial institutions now. we are giveing them money @ less than 2%, they have taken the money and have purchased 30 year treasury bonds paying 4%. that is why the interest rates are low now, and the dollar has seen some strenghth.

what do you think is going to happen once that trade unwinds?

[JustRalph]

Keilan,

You know what... I hope I'm dead wrong and that Boxcar, Tom and others can have a real laugh at me in a year or two. I'm in my 50's, had a fun career in the international markets. Now, I've been in the racing business for 10 yrs. I've bred a few, claimed a few, bought a few, was even part of a team that raced a horse in The Kentucky Derby.
I've had lots of action and fun, but can we offer the same for our kids, grandkids, etc.
The path the country is on.. the partisan thinking.... and the way the world is changing against the USA... Not to mention how our own Govt officials have already mortgaged their future.

This post reminded me of this video........Fred Thompson and subtle sarcasm on the economy............along the lines of this post............

http://hotair.com/archives/2008/12/02/video-fred-on-the-economy/

[Pace Cap'n]

And today, the first Tuesday after gobble gobble day is known as "Stolen Identity Tuesday." :eek:

Stolen Human Identity Tuesday

[Valuist]

As for Obama, one of his main platforms was his plan to adjust the tax structure by raising those making over $250,000 per. Now whether your against this or for this is not the debate. The problem I have is that AFTER he's been elected, he retracts and says he isn't going to seek that change.
Did he learn something AFTER being elected that he didn't know prior to?
No. He, and all of Washington, just lie and lie and lie and it never ends.
The credibility of our leaders is shamful. This Tom, is what scares me and should all of us.

I think he did learn something after he was elected. For one thing, for the primary and much of the Presidential election the economy wasn't in good shape but it was nowhere near as horrendous as its become. His economic advisers know that even if they do raise taxes on the rich, they shouldn't do it in the midst of a deep recession. It'll happen but probably not for two years.

[keilan]

Keilan,

You know what... I hope I'm dead wrong and that Boxcar, Tom and others can have a real laugh at me in a year or two. I'm in my 50's, had a fun career in the international markets. Now, I've been in the racing business for 10 yrs. I've bred a few, claimed a few, bought a few, was even part of a team that raced a horse in The Kentucky Derby.
I've had lots of action and fun, but can we offer the same for our kids, grandkids, etc.
The path the country is on.. the partisan thinking.... and the way the world is changing against the USA... Not to mention how our own Govt officials have already mortgaged their future.


Slewis - I hope both of us are dead wrong, but the smartest big money people I know cashed out of the stock market almost 2 years ago. They have also predicted tough times globally and in no way will the US be the beneficiary of that. The gig is up!!!!

[slewis]

Slewis - I hope both of us are dead wrong, but the smartest big money people I know cashed out of the stock market almost 2 years ago. They have also predicted tough times globally and in no way will the US be the beneficiary of that. The gig is up!!!!

Yup,

About 2 yrs ago I had a horse with Bill Mott who stables winters at Payson Park in Indiantown FL. I wanted to watch him train.One of the best traders I knew who worked for UBS had just bought a house in neighboring Vero Beach so we met for lunch. He asked me if I was following the markets and was aware of the sub prime possibilities. I was shocked that the Fed didn't crack down.... And for everyone who didn't read other threads I posted on this subject.... ALL THE BANKS KNEW WHAT THEY WERE DOING.....they didn't care about the risks.. they had Bd of directors to answer to and wanted to keep their stock prices up.
After thinking about it for about 15 sec... I got a chunk out the next day.
The broker handling my acct asked "why?" When I told him, he laughed at me.

[bigmack]

You've got to accentuate the positive
Eliminate the negative
Latch on to the affirmative
Don't mess with Mister In-Between

Without being diluted, Johnny Mercer had a point.

Ain't a sole that I know who thinks things aren't bad. Some like to recant stories of how soon they found 'the impending doom'. (How bout a contest? Who knew first!) :rolleyes:
...others regale in its possiblities (principally confused Canadians)

The water level is here for all to see.

Me? I'd much rather be in a boat taking on water with lads asking how can we make this better, how can we get through this using our strengths rather than those posturing 'I told ya so', 'It's the end' & 'God help us'.

Put 'em in a dinghy and send 'em adrift.

TaTa.

[keilan]

You've got to accentuate the positive
Eliminate the negative
Latch on to the affirmative
Don't mess with Mister In-Between

Without being diluted, Johnny Mercer had a point.

Ain't a sole that I know who thinks things aren't bad. Some like to recant stories of how soon they found 'the impending doom'. (How bout a contest? Who knew first!) :rolleyes:
...others regale in its possiblities (principally confused Canadians)

The water level is here for all to see.

Me? I'd much rather be in a boat taking on water with lads asking how can we make this better, how can we get through this using our strengths rather than those posturing 'I told ya so', 'It's the end' & 'God help us'.

Put 'em in a dinghy and send 'em adrift.

TaTa.


Mac go **** yourself you useless POS

[sammy the sage]

""Some just can't/don't want to see the elephant in the room.""

&


""Me? I'd much rather be in a boat taking on water with lads asking how can we make this better, how can we get through this using our strengths rather than those posturing 'I told ya so', 'It's the end' & 'God help us'.""

:bang: :bang: :bang:

I've post BOTH of these thought's/sentiment's in the last year...on numerous occassions...and GOT nothing HERE.

just abuse... :mad: :(

[hcap]

You've got to accentuate the positive
Eliminate the negative
Latch on to the affirmative
Don't mess with Mister In-Between

Without being diluted, Johnny Mercer had a point.

Ain't a sole that I know who thinks things aren't bad. Some like to recant stories of how soon they found 'the impending doom'. (How bout a contest? Who knew first!) :rolleyes:
...others regale in its possiblities (principally confused Canadians)

The water level is here for all to see.

Me? I'd much rather be in a boat taking on water with lads asking how can we make this better, how can we get through this using our strengths rather than those posturing 'I told ya so', 'It's the end' & 'God help us'.

Put 'em in a dinghy and send 'em adrift.

TaTa.Spoken like a true stuck up pansy.

Lads??? :rolleyes: :rolleyes: :rolleyes:

Must get pretty steamy out there for months and months at a time. Between ports. I betcha mucho battening down the hatches a goin' on. Not that there's anything wrong with that Whatever floats your dingy.

http://www.blakeneymanor.com/images/carryon/fop.jpg

[PaceAdvantage]

Mac go **** yourself you useless POSWow.

[ddog]

the mac laddy and crew,

the Paul post contains the "how we can make it better".

But, the laddies have to be off the glue long enough to crawl out from under the bed or come out of the closet and face the world straight up.

try it, maybe you and others will find your way back to solid soil someday.


We will be waiting for you.

[bigmack]

Wow.
A real class act huh? Jerking his chain is like taking candy from a kid.

Get a load of hcap. The king of Libdom & the use of 'lad' twirls him in an unfettered gay jag. :lol:

Ferreted out two lunkheads with one worm. :faint:

[ddog]

""Some just can't/don't want to see the elephant in the room.""

&


""Me? I'd much rather be in a boat taking on water with lads asking how can we make this better, how can we get through this using our strengths rather than those posturing 'I told ya so', 'It's the end' & 'God help us'.""

:bang: :bang: :bang:

I've post BOTH of these thought's/sentiment's in the last year...on numerous occassions...and GOT nothing HERE.

just abuse... :mad: :(


everyone must accept his lot in this life....
:(

[PaceAdvantage]

everyone must accept his lot in this life....
:(Seriously, even if you were a die-hard doom and gloomster, say, one year ago, how has that changed your life for the better?

What's the payoff to being "right" in this case? Did you guys short the shit out of oil when it was at $140+, realizing economies around the world will grind to a halt and thus demand for oil will drop big time?

All of you out there who have been doom and gloomers for over a year now, how did you take advantage of this foreknowledge?

I wasn't a doom and gloomster, and I must say that being behind the curve when it came to predicting the end of the world hasn't hurt me in the least.

[chickenhead]

the malls will really be full if the automakers go belly up. People will be living in those mofos, digging through the trash for pieces of discarded Cinnabuns.

[ddog]

Seriously, even if you were a die-hard doom and gloomster, say, one year ago, how has that changed your life for the better?

What's the payoff to being "right" in this case? Did you guys short the shit out of oil when it was at $140+, realizing economies around the world will grind to a halt and thus demand for oil will drop big time?

All of you out there who have been doom and gloomers for over a year now, how did you take advantage of this foreknowledge?

I wasn't a doom and gloomster, and I must say that being behind the curve when it came to predicting the end of the world hasn't hurt me in the least.

Pa,

One person's "hurt or benefit" from the current situation is just that.
DO you doubt that people who have lost their homes/jobs/pensions or a great percentage of their resources have not been hurt in the least?

DO you believe that as long as ONLY you have not been hurt in the least that YOUR position would be long-term sustainable?

seriously , yes, i have been short mainly via etf and have not been caught in the wreakage in my retirment accounts, and have made sone coin ,so yes, although it's redboarding, yes, it has helped.
I didn't buy a house at the top of the bubble, i didn't get stuck with a bunch of unflippable properties, i didn't pull out every dime of credit I could get to play on vacation or to put in new kitchen or a pool or buy a new boat or car or anything else assuming the value then has to go one way forever.

You know , lots' of times you don't need to gain , just not losing can be a relative gain.



I am NOT a gloom and doomer in the sense I think? you are implying.

I DO try very hard to look at and for signs that point to outcomes, that's at the heart of investing isn't it, not trading, maybe.

I don't hope for bad things to happen to anyone, that's not the way to go.

I know that to only HOPE that good things will happen or to deny because it's easier that only good things will happen isn't any good either.

I believe there are policies along with choices inside those that can help to make this country a stronger place , maybe not today but down the road.

I lament the culture I feel we encourage, maybe no other is possible now, that plays today since tomorrow we are all zero.

That maybe too dramatic, I don't think so, but it doesn't bode well for this country longterm.

I feel that many have been blinded by the "Morning in America" ideal and don't accept that night can follow the day but believe that policies from the past that may have made some sense then, can be eternal policies that always make sense for today.

That's a lot of smoke and mirrors, but basically I think that on a national level we hardly ever get down to the real choices since nobody can get elected talking about them out in the open.

Everyone wants to believe you can spend 6-10% more (or more) than you produce and be fine. I don't think nature works that way no matter how many aircraft carriers one has.

[PaceAdvantage]

Pa,

One person's "hurt or benefit" from the current situation is just that.
DO you doubt that people who have lost their homes/jobs/pensions or a great percentage of their resources have not been hurt in the least?

DO you believe that as long as ONLY you have not been hurt in the least that YOUR position would be long-term sustainable?Why in the world would I doubt that people are hurting? That wasn't my point.

One or two posters have been rubbing it in my face lately that a recession has been officially called and started in December of 2007. I was simply wondering what those who had the good fortune of being ahead of the curve in predicting our current economic have done to take advantage.

For instance, oil peaked in July of 2008, a full seven months after the recession officially began and many months after the doom and gloomers first began serious talk of recession. If the doom and gloomers started shorting oil at the beginning of 2008 to back their opinion, how destroyed did they get when oil shot to 140+ in July?

These are the questions I ponder.

[o_crunk]

All I know is this....I had to go to a mall last night. This mall probably has the most high end stores in the US, surrounded by some of the most expensive real estate in the US. I have been going to this mall for years this time of year and you would be lucky to get a parking spot within 500 feet. Last night was a GHOST TOWN. Parked literally within 60 feet of the place. Talked to a guy behind the register at a store and he said that black Friday was better than he expected but it's been surrounded by, in his words, 'no foot traffic, no sales'. He said he'd be surprised if half the stores in this mall were in business 6 months from now.

My friends are losing their jobs left and right.

At work for a manufacturer, we have been told to STOP production. Find something for your employees to do that's valuable to the company other then producing PRODUCT. And this company is in a GREAT position to weather this storm.

Where is our leader? Our President? This has been a total failure of leadership. People see the nightly news and think things are bad and act accordingly, without any explanation from leadership. Nothing. Bush has been a total empty suit for this entire crisis.

The ish is just starting to hit the fan.

[ddog]

Pa

Ok, i get it.
forget all the other.

I stayed bullish on oil a bit too long so got dinged the bottom fell out.
Dumb, but I would't give it up.

On something more important, i suspect we get worse than expected(not by me) emp nbrs friday , but I think that was the sell off to close thursday so I think we may actually pop a bit friday?

What say you?


O_C, as to Bush and Obama soon, this is too much for them to handle.
The forces at work are bigger/faster than gvt can react to.

I really can't fault them much , although I think the panic plan they rolled out was dumb and actually will end up being viewed as making things worse.

They just need to stop with all the "plans", thay have spooked anyone with real cash from jumping into risk since how can you know what they will next dream up.

Got to ride it down sadly, let's get on with it.
debt has to be reduced everywhere, either paid off or written off, whichever.
it's not home prices or foreclosures, that's just the symptoms.

[PaceAdvantage]

This recession has me quite confused. Past recessions have usually been marked by some pretty steep job losses near the official beginning of the recession.

Here we are, officially one year into our newest recession, and just now are we starting to see job loss numbers hitting traditional recessionary levels (325k expected Friday, with around 300-400k being the peak of most prior recessions).

If we're just starting to peak now with job losses, I would have to imagine things are going to get a whole lot worse in terms of consumer spending and loan defaults. There appears to be no light at the end of the tunnel and Paulson and company are inspiring zero confidence as far as I can tell.

Time for another rate cut...:rolleyes:

[lamboguy]

what is happening now is the excessive's are coming to pass. for instance, it only cost about $3500 to manufacture an automobile, why should people continue to pay up to 10 times that amount. samething with building homes, or financing their homes. why should someone pay points on a morgage?

why should a ballplayer make $10 million a year?

the answer to all these questions is that we live in a free enterprise system. if no one will pay these ridiculous prices then their won't be any need to manufacture automobiles that have these price tags on them. as far as i can see this is the only way to clear out the problems we have right now. not throw out handouts to bankers that stole to begin with, so they can stay afloat and do it again.

the recession has already hit the horse business, no more crazy prices for bad horses. the horse racing industry is more discrecionary, but it will hit every other form of high priced junk we have on the market these days.

[sammy the sage]

Time for another ''HISTORY" lesson...exp. for those who JUST look at ONE number at time...instead of INTERPRETING them all TOGETHER :bang:

http://abcnews.go.com/Business/WireStory?id=6397760&page=2

!st..."" Still, the unemployment rate often peaks after a recession has ended.""

Hope this CLARIFIE's a previous poster's confusion...""This recession has me quite confused. Past recessions have usually been marked by some pretty steep job losses near the official beginning of the recession.""

2nd...""Given the current woes, the jobless rate could rise to as high as 8.5 percent by the end of next year, some analysts predict. Projections, however, have to be taken with a grain of salt because all of the uncertainties plaguing the economy.""

This is still...WAY OFF...the AUTHOR is also guilty of looking AT ONLY ONE ste of number's...true unemployment/spending power has ALREADY exceeded 15%...and getting worse...so NO BOTTOM yet to the market!

[slewis]

This recession has me quite confused. Past recessions have usually been marked by some pretty steep job losses near the official beginning of the recession.

Here we are, officially one year into our newest recession, and just now are we starting to see job loss numbers hitting traditional recessionary levels (325k expected Friday, with around 300-400k being the peak of most prior recessions).

If we're just starting to peak now with job losses, I would have to imagine things are going to get a whole lot worse in terms of consumer spending and loan defaults. There appears to be no light at the end of the tunnel and Paulson and company are inspiring zero confidence as far as I can tell.

Time for another rate cut...:rolleyes:

PA,

I was attracted to this post by your last comment "time for another rate cut".

It is my opinion that, although fine tuning the economy with constant rate adjustments (especially cuts) by the central banks, especially the fed, has become the state of the art way to keep the boat on a straight course,
in the current enviornment, I think it's a MAJOR blunder.
It was tried in Japan where rates hovered around the 1% level for almost a decade and just kept a bad situation bad longer.

Here's why they shouldn't:
Although a rate cut will create greater profitability for banks (the price they pay for day to day funds compared to the consumer "spread", what they charge you for credit cards, car loans, etc)cuts will have an adverse effect in the housing market, where the true crisis exists in this country right now.
Cut rates and the guy who's doing ok and wants to buy that $800,000 (but should only buy a $650,000 home) he will go back to the bank and squeeze hard to get his "better" piece of the american dream. Here's an example of how low rates artificially keeping real estate prices up, and it has a stagnating effect on the market.
More importantly, should things turn worse, as is possible, you've greated more foreclosures and bigger problems, including the optimistic guy who just bought his dream home, with the help of artificially low interest rates.
Was this not the major cause of the problem to begin with?
The Govt and banks need to give new homeowners every chance to succeed by having home PRICES drop, NOT by cutting interest rates.
It is my opinion, that if this Govt really wants to move quickly (although painfully) through this mess, they need to let the Real estate market meltdown, let housing prices CRASH, and move from there.
They wont do it... they dont have the balls.
Paulson and co continue to put a band aid on a major artery in an attempt to stop the bleeding.... and this wont work.
They should NOT cut rates.

[LottaKash]

This recession has me quite confused. Past recessions have usually been marked by some pretty steep job losses near the official beginning of the recession. Time for another rate cut...:rolleyes:

With all due respect, and I really hate to be viewed as a "gloom & doomer", but anything previous that has occurred financially, in this nation's history, is and was very different from now... With our nation on the "brink of bankruptcy" it is a brand new and un-rivalled ballgame then in the past, and if viewed in this light, the past historical economies do not necessarlily equate to our future economies with any degree of prediction or certainty, and all future bets are off, I believe.......

Recovery is or may be possible if our manufacturing base would return home, but other than that, or wishful or prayerful thinking, what will or what could, possibly save us ?.....

I know, thank goodness "Change has Come".........:D

best,

[DanG]

Cut rates and the guy who's doing ok and wants to buy that $800,000 (but should only buy a $650,000 home) he will go back to the bank and squeeze hard to get his "better" piece of the american dream. Here's an example of how low rates artificially keeping real estate prices up, and it has a stagnating effect on the market.

More importantly, should things turn worse, as is possible, you've greated more foreclosures and bigger problems, including the optimistic guy who just bought his dream home, with the help of artificially low interest rates.
Was this not the major cause of the problem to begin with?
They should NOT cut rates.
:ThmbUp: Huge piece of the future puzzle right here… :ThmbUp:
http://www.choiceshirts.com/images/A9/46/A9461-lg.jpg

[chickenhead]

I think there are two prerequisites for a "healthy" housing market, requiring less leverage by way of a larger down, and sufficient cash flow to service the debt. So long as 20% is put down (and a remaining CASH cushion somewhere else), and the borrower has proven cash flow to service the debt, they can put mortgage rates wherever they think they want it. Cheap is fine.

What bothers me more than the prospects of lower interest rates, are things like the FHA loans with 3% down. Loose money is more of the problem than cheap money, imo. If they require equity to underpin the market in a way that was absent over the past couple of years, things will sort themselves out on their own.

[RaceBookJoe]

Most of the places i have gone to this past week have had decent crowds. What I am not sure about is if and how much they are actually buying, and after todays job loss numbers of over 500,000, i wonder if some of the stores have more people because more people are out of work. The busiest stores i went to were costco, best buy, and the mall. Target, BBB were not as crowded as i expected. My friend works for Walker Furniture and where a normal delivery day might have 700 pieces, one day was down to about 50 pieces...they have even canceled deliveries 1-2 days a week and are combining them. Times are tough for a lot of people. According to Fox, the #1 business to be in right now that is recession proof is the funeral business. rbj

[ddog]

rates play a large part of the timing of major purchases.

Not smart,imo. also, i suspect PA was deriding the effect in his post.
When you keep rates "artificially" low , all you do is "borrow" consumption forward in time , when in reality the income stream to support it may not , almost can not be in the current time available to support it.

You thus encourage people to "buy" stuff that they wouldn't/shouldn't under their present income stream.

Thus, you encourage over leverage and set the stage for any minor shortfall to possibly cause the whole persons "house of cards" to collapse.

People will borrow/buy to excess when the rates currently seem to be "to good to last".

This gets to the whole deal of expectation in regard to inflation,future values ,etc.

I had said many months ago that the FEd shold actually hold or raise rates and I think at least holding them steady at 3 or so woud have been better.
Same reason we should have a gasoline tax pegged to keep gasoline steady when the "price" falls.


It's the expectations you have to manage.

[chickenhead]

Thus, you encourage over leverage and set the stage for any minor shortfall to possibly cause the whole persons "house of cards" to collapse.

People will borrow/buy to excess when the rates currently seem to be "to good to last".

What I don't understand, is that isn't this supposed to be the major blocking and tackling function of a lender? This should be kept from happening regardless of demand. If those other functions are not restored, we're screwed regardless, it seems to me.

[ddog]

yes, but i don't know how (other than the current happenings) do you enforce that.

Once you allow "paper" to be sold/hidden then the original lender/originator has his cut and is out of the deal.

If you clamp down too hard I suppose you kill deals that "could work".

If you don't , you encourage deals that couldn't work ever.

I guess this is why I was against the gvt encouraging home ownership via tax policy or anything else and certainly they should not be backstopping it.

I think I am fine with crazy deals being done as long as the people doing them bear the full brunt of failure all the way up and down the line and that policy is made clear and explicit to all.

[chickenhead]

that's why I'd argue a big equity cushion is a must have requirement for a mortgage, and an easy one to enforce. You can get directly to the overall housing markets leverage right there. It's easy to bullshit about a lot of things, but not 20% on the barrel head.