More signs of recovery. (Canada, speech, rating, financial)
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I'm talking about his libido in the present here and now. Like the economy, not so good. Gets itself up for a tiny epoch, and quickly dies down. The analogy holds.
There are ups and downs in the early stages of ANY recovery - and it's the same with this one. What's important is where TREND is taking us - and in that regard, the movement of the economy is clearly (though still slowly at this stage) towards recovery and growth.
And apparently Construction Spending is ALSO rising.
"Meanwhile, U.S. construction spending made its largest gain in a year in September, the Commerce Department said on Monday, bolstered by a record pace in public construction and the biggest increase in private residential building in more than six years."
There are a LOT of "ifs" in the scenario the article mentions - all of which makes that combination very unlikely.
First off, if there is still a major problem with the housing market Congress will NOT let the homebuyer credit expire - that's just NOT going to happen.
Secondly, unless the economy REALLY picks up by spring (unlikely to happen to that degree) interest rates are likely to remain low even without the US buying back treasuries (as the sales this week indicate) - and even IF rates start to creep up, they are soooooo low now, that they can start upward and STILL remain very very low - not only that, but any movement upward is likely to result in a spike in sales as those on the fence rush forward to buy before rising rates raise their potential payments.
Finally, the article mentions that banks MAY start releasing their inventories. Why would they do that if the other "bad things" had come to happen? In that case, they are likely to simply wait a bit longer (as they are doing NOW).
All in all, it's a typical "doom and gloom" scenario that relies on ALL of those bad things ALL happening at the same time - which is very unlikely.
Sorry, I just don't buy it. Home prices are stablizing and will continue to do so. Yes, there IS excess inventory, but the banks are no longer in panic mode and so no longer in any real hurry to dump those properties at fire sale prices. Thanks to the various bail-outs, the recovering stock market (which puts them in a better financial position) and their overall improving bottom lines - more banks now have the advantage of being able to take their time on these sales and thereby keep prices fairly stable.
Is it a great market?
No.
Is it another disaster on the way?
Probably not.
COULD the scenario pictured happen?
Sure.
Is it LIKELY?
Not really - there's just too many "ifs' in that scenario - "it's" that require too many people (Congress, bankers, buyers) all doing things against their interests. That just isn't likely to happen.
It's FAR more likely that the Real Estate market will limp along and gradually improve as the months go by.
And of course FedEx has announced it's going to begin hiring 14,000 temp and/or part time workers for their holiday rush - yes I KNOW it's temporary work that simply happens every year - the news here though was their prediction that they will have their busiest shipping day EVER this year (another sign that people ARE buying and products ARE shipping).
Yes, I KNOW there are STILL plenty of companies reducing (more than hiring at this point), but that WILL turn around. It begins when a few companies announce plans to expand hiring - which is where we are now (as compared to a few months back when really NO ONE was yet hiring) - and then moves into a period when MORE companies begin hiring - and FEW are laying off.
In the spring you will see the layoffs end and hiring pick up.
It's all about who's in the White House. It did tank when Bush was there, and it's improving now.
It tanked when the democrats took over congress, in Bush's 6th year. Before that, the economy was more than great..! It is definitely getting worse, not better. Telling yourself it's getting better doesn't put food on anyone's table.
It tanked when the democrats took over congress, in Bush's 6th year. Before that, the economy was more than great..! It is definitely getting worse, not better. Telling yourself it's getting better doesn't put food on anyone's table.
Dems took over Congress in January 2007.
The stock market reached an all-time high of 14,144 in Oct 2007.
How do you explain that?
And are you forgetting that the 5 year Adjutable Rate Mortages (the subprimes) that triggered the foreclosure mess were written back around 2003 - 2005, when Republicans controlled ALL branches of government?
So this subprime mortage foreclosure "time bomb" was built while Republicans were in charge.
And it was destined to explode regardless of who controlled Congress in 2007.
The stock market reached an all-time high of 14,144 in Oct 2007.
How do you explain that?
And are you forgetting that the 5 year Adjutable Rate Mortages (the subprimes) that triggered the foreclosure mess were written back around 2003 - 2005, when Republicans controlled ALL branches of government?
So this subprime mortage foreclosure "time bomb" was built while Republicans were in charge.
And it was destined to explode regardless of who controlled Congress in 2007.
Glass Stegall was repealed in April of 1999; signed by Bill Clinton. That was the beginning of the end. As you know the tech bubble burst not too long after that. So with the act repealed the next bubble was created with mortgage backed securities.
You partisans can point fingers and spew stupid rants regarding whether the Republicans or Democrats are responsible for the current mess we are in but the clear thinkers know they are all responsible. Every single leader in Washington has failed their Constituants. They rather help their corporate buddies.
The stock market reached an all-time high of 14,144 in Oct 2007.
How do you explain that?
So even though Bush was in the White House, the stock market reached an all time high, explain that to me and replace White House with Congress to answer your own question
Quote:
Originally Posted by RD5050
And are you forgetting that the 5 year Adjutable Rate Mortages (the subprimes) that triggered the foreclosure mess were written back around 2003 - 2005, when Republicans controlled ALL branches of government?
ARM's were not the problem with the mortgage industry. ARM's are tied to the federal interest rate which has only gone down, not up..
Quote:
Originally Posted by RD5050
So this subprime mortage foreclosure "time bomb" was built while Republicans were in charge.
Wait, was the problem subprime mortgages, or ARM's, they are not the same..and do you have one bit of evidence that it was built during the "Republicans" power?
Subprime mortgage meltdown did not cause the collapse of the "industry".. In fact it was due to a $2B writedown of A credit mortgages held by a company not even based in the USA. When this writedown took place, it tightened the credit industry which caused a domino effect on required equity vs operating capital. This simply means that banks couldnt finance their operating costs even though their loans were good.
http://upload.wikimedia.org/wikipedia/en/2/25/MBS_Downgrades_Chart.png (broken link)
Quote:
Originally Posted by RD5050
And it was destined to explode regardless of who controlled Congress in 2007.
And it would have exploded regardless of who was president, especially considering it didnt even originate in the USA.
Glass Stegall was repealed in April of 1999; signed by Bill Clinton.
I dont even know if thats really true. I think the problems started when the government started securing more and more mortgages, and setting lower and lower parameters to obtain a mortgage. When they did this, it let the banks off the hook and allowed them to just loan to anyone simply based upon "points", rather than looking at the fundamentals.
$500,000 home with $25,000 income.. No problem, government said you have enough points, do the loan..
Yes, I've seen people that did stupid things like this..
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