<p>Not really. Even with all the drumbeating by the papers and leading politicians, economists are split 50-50 and even then most only see a very mild recession. </p>
<p>[Economists</a> rate chance of recession as a ‘coin flip’ - USATODAY.com](<a href=“http://www.usatoday.com/money/economy/2008-01-28-survey_N.htm]Economists”>http://www.usatoday.com/money/economy/2008-01-28-survey_N.htm)</p>
<p>Shh, don’t tell the Federal Reserve, OK?</p>
<p>Knowing my brother for 58 years, who is a practicing economist for a major entity, I trust his foresight about as far as two weeks. I invited him to see the local wm, cfc, bac, usb, and local banks and credit unions, so that he can see who are the clientel. I tell him the traditional lenders are constantly loosing out to the mortgage brokers and aggressive lenders because of the adjustable loans. Nope don’t need to see. Six months later he again visits, I make the same invite And he says in October, “don’t worry, be happy,” its only an accounting problem, the assets are still there. "</p>
<p>I don’t know if anyone really knows about the chances for a recession. Fortune telling is a gift of Gypsy’s, here today, gone tomorrow.</p>
<p>You know I go by what I see not by what I read or watch on tv… What I see are alot of empty houses in Mayberry when I walk my dog… no for sale sign, no foreclosed sign, just an empty houses where families were 6 months ago. </p>
<p>As to how strong or mild things are now, I guess that would depend entirely on your personal situation. What’s the old saying a recession is when your neighbor loses his home and moves on and a depression is when YOU lose your home and have to move on…</p>
<p>I’m just glad I live fairly inexpensively and have little debt.</p>
<p>[Bloomberg.com:</a> Exclusive](<a href=“Bloomberg Politics - Bloomberg”>Bloomberg Politics - Bloomberg)</p>
<p>"Jan. 29 (Bloomberg) – The Federal Reserve may push interest rates below the pace of inflation this year to avert the first simultaneous decline in U.S. household wealth and income since 1974. </p>
<p>The threat of cascading stock and home values and a weakening labor market will spur the Fed to cut its benchmark rate by half a percentage point tomorrow, traders and economists forecast. That would bring the rate to 3 percent, approaching one measure of price increases monitored by the Fed. </p>
<p><code>The Fed is going to have to keep slashing rates, probably below inflation,‘’ said Robert Shiller, the Yale University economist who co-founded an index of house prices.</code>We are starting to see a change in consumer psychology.‘’ </p>
<p>So-called negative real interest rates represent an emergency strategy by Chairman Ben S. Bernanke and are fraught with risks. The central bank would be skewing incentives toward spending, away from saving, typically leading to asset booms and busts that have to be dealt with later. </p>
<p>Negative real rates are <code>a substantial danger zone to be in,‘’ said Marvin Goodfriend, a former senior policy adviser at the Richmond Fed bank.</code>The Fed’s mistakes have been erring too much on the side of ease, creating circumstances where you had either excessive inflation, or a situation where there is an excessive boom that goes on too long.‘’ </p>
<p>Adjusting Outlook </p>
<p>The Federal Open Market Committee began its two-day meeting at 2 p.m. New York time and will announce its decision at about 2:15 p.m. tomorrow. Officials will also discuss updates to their three-year economic forecasts at the session. </p>
<p>Bernanke, 54, and his colleagues on Jan. 22 lowered the target rate for overnight loans between banks by three-quarters of a percentage point. The cut was the biggest since the Fed began using the rate as its main policy tool in 1990 and followed a slide in stocks from Hong Kong to London that threatened to send U.S. equities down by more than 5 percent. </p>
<p>The central bank will probably lower the rate at least to 2.25 percent in the first half, according to futures prices quoted on the Chicago Board of Trade. The chance of a half-point cut tomorrow is 86 percent, with 14 percent odds on a quarter- point."</p>
<p>I’m sorry Barrons, but if we need a 2.25% interest rate, I don’t care if we are in an official recession or not…we have economic problems. 3% means problems.</p>
<p>At least this time you aren’t quoting an economist who is predicting 3% growth this year. :)</p>
<p>yes, economists are the ones to believe, not the people with no work, or having to work 3 jobs, or the people who can’t afford medicine and milk, or the empty houses, or the people getting laid off…</p>
<p>yeppers, its a rosy little barrons garden…</p>
<p>guess what my 3.X % pay raise meant to my bottom line…</p>
<p>$25 a week after taxes, insurance, and yada yada yada were deducted from my paycheck.</p>
<p>But I have a job (and unless the federal government goes out of business I won’t lose it) Piece of mind that the income won’t evaporate… priceless!</p>
<p>I wonder how many "soft landings: there truly have been? Not many, I’d hazard.</p>
<p>So why is the solution to problems bought on by too much debt more debt?</p>
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<p>Agreed…whenever it looks like the Fed Reserve is on the ball, it takes the ball and goes home.</p>
<p>“So why is the solution to problems bought on by too much debt more debt?”</p>
<p>Amazing, isn’t it?</p>
<p>He’s in the two economists debating part of the article in a sidebar. And I believe it was 2.5% but I’ll take your word. We are coming off a great wealth increase the last 5 years so an adjustment is due. Even if you have to give back 10% you did great from 2001-2006. So trees don’t grow to the sky. I’m telling you buy Las Vegas RE this year. In 10 years you’ll thank me.</p>
<p>Economies have always and will always run through cycles. To think that it doesn’t have to just means that one doesn’t understand economics. With all the good and prosperous times, there has to be inflation and recession. It HAS to happen. Basically;</p>
<h1>The economy is strong, people are employed and making money. Demand for goods – food, consumer appliances, cars – increases to the point where it outstrips supply.</h1>
<h1>This demand fuels a rise in prices, or inflation. As prices increase, people ask for higher wages. Higher employment costs translate into higher prices for goods, fueling an upward spiral effect.</h1>
<h1>When prices get too high, consumers decide goods are too expensive. Hence, demand decreases. When demand decreases, companies lay off workers because they don’t need to make as many goods.</h1>
<h1>Decreasing demand fuels declining prices, which means the economy is in a recession.</h1>
<h1>Companies lower prices to spur demand. As demand picks up, people begin buying again, fueling the need for greater supply. And the cycle goes back to the beginning.</h1>
<p>The only difference is how the government handles it. The objective; such as the economic stimulus package currently in front of the senate and how the Fed alters the interest rates; isn’t to stop a recession. It’s to ensure that the cycle runs smoothly. If the cycles change too quickly, you can run into situations like the great depression. </p>
<p>These cycles continue constantly. If you look back all the way to the great depression, you will see economic cycles in the 7 year period. Unfortunately, because many don’t understand these cycles; and that they are essential to a healthy economy; (Or eventually milk would be $10 a gallon; but you make $100,000 a year; and the inflation become artificial and unstable). Also; too many people put credit and blame on the current president at the time. Neither Reagan, Bush, Clinton, or Bush are individually responsible for the economic recession/inflations since 1980. All they can be responsible for is how smoothly we transition in and out of the cycles. You don’t want ramped inflation and you don’t want drastic recession. </p>
<p>While I believe that the cycle runs in the 7 year period, that doesn’t mean that it’s 7 years uphill and then 7 years downhill. Just that it will usually go one direction or stay somewhat stable for about that long before a shift. I personally think we are in the beginning of a recession. (Since 3rd qtr 2007) I also believe that if exports improve; which they can because of new customers such as china; technology; and depending on energy prices. Have you noticed that last year oil was at about $50 a barrel and gasoline was at about $2.30 a gallon. Oil has almost doubled; getting close to $100; yet gasoline is only at about $2.85 a gallon. I know the answer, but ever think how they can double the price of crude but only raise the final product by 20%. Anyway, it is quite easy for a recession to only last about 12 months before it stabilizes again.</p>
<p>COMMENTARY: It will be funny if Hillary or Obama get elected. People will say that the economic down spin of 2007-2008 was Bush’s fault, but when it starts to go very bullish in the 3 quarter of 2009 it will be all because of Hillary or Obama; whoever is in office. Such ignorance.</p>
<p>I agree that then economy runs in cycles. The US government and the Fed are trying to eliminate the down cycles. So we keep creating bubbles.</p>
<p>You can’t eliminate a cycle, you can only cushion the transitions. If you eliminate the down cycle, inflation will eventually cause an imbalance. Being we are now more and more on a global economy, it is much more fragile. That is why the dollar is weaker and the US economy is not as strong against much of the world. </p>
<p>Our economy use to be excessively much higher than almost the entire rest of the world. When the economy is global, there is a balance that must be reached. Some economies have to go up and some MUST COME DOWN. If they didn’t no one would ever import our exports because no one could afford them. We wouldn’t have ANY products made in the USA because overseas would always be cheaper. You have to balance imports, exports, and domestic. That is the period we are in now. Whether or not we can get SE Asia, China, Latin America, Aftica, etc… to be part of the balance or not is the hard part.</p>
<p>We still have a global imbalance. There are all these potential customers to help our exports and get our economy balanced. Unfortunately, many of these countries can’t afford our exports. If we HELPED Africa and other areas in their economic development; like we are actually trying to do in the middle east; then they can buy our exports as well as other countries. They in turn would trade their exports. </p>
<p>No, we can’t stop the cycle, nor should we try. If we don’t allow some recession at times to keep the prices in check, then our economy will never recover. We are too proud of our $30-$50 an hour jobs in many industries. How do you compete that with countries paying $10 a day?</p>
<p>“We are too proud of our $30-$50 an hour jobs in many industries. How do you compete that with countries paying $10 a day?”</p>
<p>That’s a very tough issue. Whoever solves this is going to be a hero to millions of people.</p>
<p>We are too proud of our $30-$50 an hour jobs in many industries</p>
<p>How much do you plan on making when you get out of college?</p>
<p>what I see are alot of empty houses in Mayberry when I walk my dog.</p>
<p>I don’t even have to walk my dog to see empty houses- on our next door- there are two houses that have each been vacant for well over a year- different owners- another house down the street has been for sale for over 4 months.
This is the same street where even a year ago, a house sold within a week for over asking price.</p>
<p>Meanwhile all around me, I watch single family homes being torn down & replaced by studio or 1 bedroom condos.- selling very slowly- the market looks saturated around here
Sure glad Im not a landlord!</p>
<p>[Bloomberg.com:</a> Worldwide](<a href=“Bloomberg Politics - Bloomberg”>Bloomberg Politics - Bloomberg)</p>
<p>U.S. Economy Expanded 0.6 Percent, Less Than Forecast</p>
<p>feds cut rate again?
[Bloomberg.com:</a> Exclusive](<a href=“Bloomberg Politics - Bloomberg”>Bloomberg Politics - Bloomberg)</p>
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<p>Ive never been so tickled that our mortgage is a ARM</p>
<p>“Ive never been so tickled that our mortgage is a ARM”</p>
<p>I am glad somebody is happy. :)</p>