The economy is STILL growing!!!!!!!!!! What happened to the recession???

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Engineer

Elite Member
Oct 9, 1999
39,230
701
126
Recession isn't defined purely on growth of GDP. We won't know if we're in a recession (officially) until about 6 months (historically) after it happens.

Economy isn't great..but it's far from the worst is has been. Let's see if the temporary pop from the $150 billion "borrowed" government injection (stimulus checks) stays of if things fall. 3rd quarter is the story here, not the second one.
 

miketheidiot

Lifer
Sep 3, 2004
11,060
1
0
Originally posted by: SleepWalkerX
Originally posted by: miketheidiot
Originally posted by: SleepWalkerX
I want to go ahead and apologize for not reading the entire thread (at work), but I want to go ahead and throw out what we are facing right now.

We are undergoing a deflationary recession. Banks are losing more money than the Fed can create credit. Deflation means the supply of the dollar is shrinking so the value of goods are rising in relation. Will we see inflation? Probably, but first we have to bottom out in our current housing crisis and let house prices fall in relation to real incomes. I'm still researching and trying to put all the pieces together, but from what I can gather we are in deflation.

*facepalm*

seriously dude, at least figure out the terms and definitions, or even basic mechanics before you post.

Deflation is a contraction of the money supply. Inflation is the expansion of the money supply. I am not arguing with you on this. Do some reading and learning.

Perhaps, you misunderstood what I was saying?

lol i do some reading and learning right?

deflation causes lower prices you moron. We are not undergoing a 'deflationary' recession, if so, we wouldn't be seeing incresing prices of goods because deflation --> leads to lower prices.

 

Kuragami

Member
Jun 20, 2008
92
0
0
Originally posted by: LegendKiller
Originally posted by: Kuragami
Originally posted by: LegendKiller
Originally posted by: cubeless
ummm... seems like lk is backing my story on this... and the gse's seem to be teetering back to "ok" today (but since u can't believe anything they say who knows what will happen...)... shit happens in a capitalist economy... at the "you" level being fiscally responsible is all you have to work with... you may still get screwed by some circumstance, but that's life...

I'm not really agreeing with you. This thing is affecting everybody, not just those who bought an overpriced house.

That's a disingenuous statement if I ever read one. Ma and Pa 6 pack with a family is not socking away thousands or millions into a financial portfolio that can save their wealth when the time comes. Chances are they have more debt than they do wealth and the primary source of that wealth is their property/house.

If you make enough money, after a certain threshold of income, you can save up money and start to generate wealth at an ever increasing rate. Sure you can have some, or even a lot, of that wealth wiped by the market but the point is that you have that ability.

The average people and most especially those who are Poor have no wealth, are most probably in debt and even if they aren't they are struggling to make ends meet. Let alone have the cash flow to invest their money.

Tell me something. What's the rate, the most up to date figure, of personal investments in the US?


Ohhh bullshit. It is affecting everybody to one extent or another. You can make the case about "ma and pa 6 pack". I am socking away 12% of my salary, with 50% matched and 8% profit sharing. Yet, I am getting hit hard. I see it everwhere even if I don't own a car.

Get rid of the angsty feeling towards the "wealthy", it doesn't do you any good.

Point out to me where I said it doesn't affect everyone. Do it. Right now. What I pointed out was that it affects different classes of people differently.

Stop trying to cut me down by putting words in my mouth. That's two posts where I lost any respect for what you have to say.

What you are doing with money is what most people in the US should do but they don't or can't.

Here is a handy chart that goes back some years so you can see what people have been doing.

http://bigpicture.typepad.com/...nal_savings_rate_2.jpg

If you don't like the chart I don't care at this point. Go find another one. There are thousands of such charts.
 

Harvey

Administrator<br>Elite Member
Oct 9, 1999
35,057
60
91
Originally posted by: ProfJohn

Topic Summary: Worst slow down in history my ass.

That slow down in your ass is because, as usual, you're full of sh8!

It looks like the worst economy in decade never turned out to be that bad after all.

Yeah... Right! Nice stats IF you happen to be a big oil corporation or Halliburton or some other large corporate entity shipping jobs overseas. Not so nice if you happen to be getting paid less than your cost of living in a full time job. That's why filings for bankruptcy were up 18% in February, and more Chapter 11 filings are on tap for 2008.

Jobless claims drop for 3rd week in a row

Go back and count again. This time, include all of those who have simply given up looking because they can't find a suitable job. They're not included in jobless figures.

As many have said it was nothing more than a mental recession.

PJ -- Nice of you to ignore those who really are hurting with your smug, cavalier bullshit. YOU and your lame ass "pander to the rich few and screw the poor" Republicans are living examples of mental recession. :thumbsdown:
 

dmcowen674

No Lifer
Oct 13, 1999
54,889
47
91
www.alienbabeltech.com
Originally posted by: Harvey
Originally posted by: ProfJohn

Topic Summary: Worst slow down in history my ass.

That slow down in your ass is because, as usual, you're full of sh8!

It looks like the worst economy in decade never turned out to be that bad after all.

Yeah... Right! Nice stats IF you happen to be a big oil corporation or Halliburton or some other large corporate entity shipping jobs overseas. Not so nice if you happen to be getting paid less than your cost of living in a full time job. That's why filings for bankruptcy were up 18% in February, and more Chapter 11 filings are on tap for 2008.

Jobless claims drop for 3rd week in a row

Go back and count again. This time, include all of those who have simply given up looking because they can't find a suitable job. They're not included in jobless figures.

As many have said it was nothing more than a mental recession.

PJ -- Nice of you to ignore those who really are hurting with your smug, cavalier bullshit. YOU and your lame ass "pander to the rich few and screw the poor" Republicans are living examples of mental recession. :thumbsdown:

Thanks to guys on both sides of the D & R aisle I have this year's name for the R's.

MRR's - The Mental Recession Republicans

:thumbsup:
 

NeoV

Diamond Member
Apr 18, 2000
9,504
2
81
"Have you been playing a braindead drone for the past 4 years or something? The media has hammered what a crappy economy we have lived in since 2004. During that time we saw solid growth despite higher energy prices. So now we are supposed to be in the middle of the worst economy since the days of FDR yet we continue to see growth? Who exactly is being delusional here?

I can say we are finally seeing the effects of a slowing economy. I can accept that. You apparently think we are in the middle of a huge downturn despite the fact we just posted a 3.3% increase in GDP adjusted for inflation.

Go back to rubbing something, you are obviously better at that than coming up with a logical well thought out argument." GENX





Take out government (deficit) spending, and how much growth is there in the economy?
Unemployment rate is at it's lowest point in how many years?
How are those housing statistics looking? Mortgage crisis anyone? Am I imagining that, or is that just a media-fed creation?

Why I need to back up this discussion is beyond me - anyone who thinks the current economic situation in this country is good is highly delusional - and if the Repubs really want to run on the economy as central issue, bring it on. Regardless, I'll back up my assertions:

The United States lost a total of 463,000 jobs in the first seven months of 2008, including 51,000 jobs in July 2008. For the past 12 months, the United States lost on average 5,600 jobs each month after gaining an average of 125,800 in the 12 months before that and 185,800 in the 12 months before then.

In July 2008, the unemployment rate was 5.7%?the highest level since March 2004

Factoring in inflation, hourly wages were only 0.9% higher and weekly wages were actually 0.3% lower in June 2008 than in March 2001. Hourly wages in June 2008 were at their lowest level since August 2006 and weekly wages were at their lowest level since October 2005.

So if avg wages are less than 1% higher, and utility costs are up - 12%? - how does that equate in the end?

The share of private sector workers with a pension dropped from 50.3% in 2000 to 43.2% in 2006, and the share of people with employer-provided health insurance dropped from 64.2% to 59.7%

New home sales in May 2008 were 33.2% lower than a year earlier, and existing home sales were 15.5% lower. Prices for existing homes fell by 6.1% and prices for new homes by 2.6% from June 2007 to June 2008. The average monthly supply of homes for the six months ending in June was 10.2 months, the highest since the U.S. Census started to report residential sales in 1967

The total values of all homes fell by 2.5% or $417 billion in the first quarter of 2007 after accounting for inflation, the largest drop since the second quarter of 1974. Home equity as a share of home values also fell to a record low of 46.2% in the first quarter of 2008.

How many historic lows do I need to cite?

Prof john was excited about gas prices? Really? Consider - The price per barrel of light, sweet crude oil in early August 2008, which will be delivered in the next month, was still 64.6% higher than a year earlier. Gasoline prices increased by 36.7% during the same time. This difference will limit the declines in gasoline prices.

Transportation cost 11.4% more in June 2008 than a year earlier, college tuition was up by 6.4%, fuel and utilities by 12.3%, medical care by 4.0%, and food by 6.1%. Since March 2001, food prices have risen by 24.2%, fuels and utilities by 48.1%, medical care by 35.0%, transportation by 33.5%, and college tuition by 66.9%.

The bankruptcy rate rose by 94.7% from an annualized 1.5 cases per 1,000 people in the first quarter of 2006?the first quarter after the new bankruptcy law went into effect?to 2.9 cases per 1,000 people in the first quarter of 2008. Credit card defaults rose to 4.7% of all credit card debt by the first quarter of 2008, an increase of 50.2% from the first quarter of 2006.

Today?s data still leaves median household income 0.6 percent lower in 2007 than in 2000.

Average real weekly earnings are down 2.4 percent so far this year, according to the Bureau of Labor Statistics

Economic growth, defined by spending, can, and is obviously now, be a highly deceiving stat.
 

shira

Diamond Member
Jan 12, 2005
9,500
6
81
Originally posted by: Svnla
Originally posted by: Arkaign
All I can tell you is that things are pretty crappy here in D/FW. Lots of stores/restaurants closing, cars piling up on dealer lots, homes going unsold, etc. Anecdotal, I know, but it's worse than I've seen since the early-90s recession.

Dallas Fort Worth has strongest job market in U.S.
And this shows what, exactly? If the D/FW economy, the "strongest job market in the the U.S.," is pretty crappy, then everywhere else the job market must be even more crappy.
 

Acanthus

Lifer
Aug 28, 2001
19,915
2
76
ostif.org
You know that most figures are core inflation which exclude the prices of food, fuel, and energy?


I mean, youve taken 100 level economics right?

The prices of food have doubled (unless you want to eat little debbies and frozen pizza, those have remained stable enough at the grocery store to hide the enormous spike in real food costs) fuel almost tripled, and energy is sharply up across the board over the last few years.

Still today core inflation trails real inflation by a factor of 2.

Funny how you can hide the bad statistics if you think your audience wont catch it :thumbsdown:
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: Acanthus
You know that most figures are core inflation which exclude the prices of food, fuel, and energy?


I mean, youve taken 100 level economics right?

The prices of food have doubled (unless you want to eat little debbies and frozen pizza, those have remained stable enough at the grocery store to hide the enormous spike in real food costs) fuel almost tripled, and energy is sharply up across the board over the last few years.

Still today core inflation trails real inflation by a factor of 2.

Funny how you can hide the bad statistics if you think your audience wont catch it :thumbsdown:

GDP is indexed to real inflation, not core. They release total inflation figures at the same time they release core.

Perhaps you're the one who should be hitting the books again.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: Skoorb
Growth is meaningless without adjusting for inflation.

Please go back and read what GDP includes and does not include, then think about it. Come back here and let us know what you find.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: Kuragami
Originally posted by: LegendKiller
Originally posted by: Kuragami
Originally posted by: LegendKiller
Originally posted by: cubeless
ummm... seems like lk is backing my story on this... and the gse's seem to be teetering back to "ok" today (but since u can't believe anything they say who knows what will happen...)... shit happens in a capitalist economy... at the "you" level being fiscally responsible is all you have to work with... you may still get screwed by some circumstance, but that's life...

I'm not really agreeing with you. This thing is affecting everybody, not just those who bought an overpriced house.

That's a disingenuous statement if I ever read one. Ma and Pa 6 pack with a family is not socking away thousands or millions into a financial portfolio that can save their wealth when the time comes. Chances are they have more debt than they do wealth and the primary source of that wealth is their property/house.

If you make enough money, after a certain threshold of income, you can save up money and start to generate wealth at an ever increasing rate. Sure you can have some, or even a lot, of that wealth wiped by the market but the point is that you have that ability.

The average people and most especially those who are Poor have no wealth, are most probably in debt and even if they aren't they are struggling to make ends meet. Let alone have the cash flow to invest their money.

Tell me something. What's the rate, the most up to date figure, of personal investments in the US?


Ohhh bullshit. It is affecting everybody to one extent or another. You can make the case about "ma and pa 6 pack". I am socking away 12% of my salary, with 50% matched and 8% profit sharing. Yet, I am getting hit hard. I see it everwhere even if I don't own a car.

Get rid of the angsty feeling towards the "wealthy", it doesn't do you any good.

Point out to me where I said it doesn't affect everyone. Do it. Right now. What I pointed out was that it affects different classes of people differently.

Stop trying to cut me down by putting words in my mouth. That's two posts where I lost any respect for what you have to say.

What you are doing with money is what most people in the US should do but they don't or can't.

Here is a handy chart that goes back some years so you can see what people have been doing.

http://bigpicture.typepad.com/...nal_savings_rate_2.jpg

If you don't like the chart I don't care at this point. Go find another one. There are thousands of such charts.

The PSR should be taken in context of what it includes or doesn't. When one does that one can easily see how it could be skewed by recent events or trends. It doesn't mean that people aren't saving anything.

Yes, people are affected differently.

What exactly do you want people to do about those who cannot build wealth? Give it to them?
 

Engineer

Elite Member
Oct 9, 1999
39,230
701
126
As I stated earlier and am now asking the OP, do you think that recession is defined solely by GDP drowth (or lack thereof)?

By the way, personal incomes dropped by the most in 3 years.

By MARTIN CRUTSINGER, AP Economics Writer
53 minutes ago



WASHINGTON - Personal incomes plunged in July while consumer spending slowed significantly as the impact of billions of dollars in government rebate checks began to wane.

ADVERTISEMENT

The Commerce Department reported Friday that personal incomes fell by 0.7 percent in July, the biggest drop in nearly three years and a far larger decline than the 0.1 percent decrease analysts expected.

Consumer spending edged up a modest 0.2 percent, in line with expectations, but far below June's 0.6 percent rise. When the impact of rising prices was factored in, spending actually dropped by 0.4 percent in July, the weakest showing for inflation-adjusted spending in more than four years.

The July performance for incomes and spending reinforced worries that the economy, which posted better-than-expected growth in the spring because of the rebate checks, could stumble in coming months as their impact fades.

Some economists worry that overall economic growth, which rose at a 3.3 percent annual rate from April-June, could come in at less than half that pace in the current quarter, and could actually dip into negative territory in the final three months of this year and the first quarter of 2009.

Back-to-back declines in the gross domestic product, which measures the value of all goods and services produced within the U.S. and is the best barometer of the country's economic health, would meet one rule of thumb for a recession.

A gauge of inflation closely watched by the Federal Reserve remained elevated in July, rising by 0.6 percent. Over the past 12 months, this inflation gauge tied to consumer spending was up 4.5 percent, the biggest year-over-year increase in more than 17 years.

The surge reflected the big increases that have occurred this year in food and energy costs. Excluding food and energy, inflation by this measure was up 0.3 percent in July, and 2.4 percent over the past 12 months, still above the Fed's comfort zone. The central bank is caught in a bind between a sluggish economy and rising inflation pressures.

The 0.7 percent drop in personal incomes followed a 0.1 percent rise in June and a 1.8 percent surge in May. After-tax incomes dropped by an even bigger 1.1 percent in July, following a 1.9 percent decline in June and a 5.7 percent surge in May. All the income figures were heavily influenced by the rebate checks.

Democrats, including presidential nominee Barack Obama, are calling for the government to pass a second stimulus package to guard against the economy slumping into a deep recession.

But President Bush, concerned about the impact the stimulus payments will have on the budget deficit, has resisted those calls, insisting that the rebate payments will continue to support the economy in coming months. The administration is already forecasting that the federal budget deficit for the budget year that begins on Oct. 1 will soar to an all-time high in dollar terms of $482 billion.

The report on consumer spending also showed that personal savings totaled 1.2 percent of after-tax incomes in July, down from a rate of 2.5 percent in June
 

jonks

Lifer
Feb 7, 2005
13,918
20
81
More fake bad news about our thriving economy. When will these statistics stop lying? It's all in their head!

http://news.yahoo.com/s/ap/200...on_bi_go_ec_fi/economy

July incomes drop by largest amount in 3 years

WASHINGTON - Personal incomes plunged in July while consumer spending slowed significantly as the impact of billions of dollars in government rebate checks began to wane.

The Commerce Department reported Friday that personal incomes fell by 0.7 percent in July, the biggest drop in nearly three years and a far larger decline than the 0.1 percent decrease analysts expected.

Consumer spending edged up a modest 0.2 percent, in line with expectations, but far below June's 0.6 percent rise. When the impact of rising prices was factored in, spending actually dropped by 0.4 percent in July, the weakest showing for inflation-adjusted spending in more than four years.
 
Oct 30, 2004
11,442
32
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WASHINGTON - Personal incomes plunged in July while consumer spending slowed significantly as the impact of billions of dollars in government rebate checks began to wane.

So much for the "stimulus" plan. Oh well. The party was fun for two or three months, but the hangover of an increased national debt is going to suck.
 

Xavier434

Lifer
Oct 14, 2002
10,373
1
0
Originally posted by: cubeless

until you got hoity toity on me i wasn't going to be nasty in my reply... oh well...

all the stuff you posted is whining bullshit and belief that you live in a socialist state... put away the economics books you didn't understand and get out a government book and try to understand that...

so there are supposed to be lots of empty jobs so your wife can hop around at will, eh? that's noble... so everyone is supposed to be able to buy a house? that silly idea helped get us into the current mess... and your lament about the money spent on education is so laughable that i can hardly type a response - look to yourself and your management for the dilemma you are in... and you aren't "throwing away" money renting... there's price for housing and many folks are better served by renting... and as for your fifth point - grow up and take some responsibility for your own mental health at least... have you ever thought that maybe if you are a little less mopey then you could be the catalyst for everyone else to be happier?

it sounds to me like you have it pretty good compared to 90+% of the rest of the inhabitants of this planet...

and, incidentally, you gave absolutely 0 ideas how to fix anything...

You misinterpreted that bolded statement. That was not meant to be read as being nasty by any means.

I am not looking for socialism. I am not looking for handouts. I'm just looking at the past and looking at where we are now and I am seeing some really crappy stuff which has the potential to be fixed.

I don't want my wife to be able to hop jobs. I want her to be able to get just one job in accounting which matches her skills that offers benefits and a chance for growth and advancement after she proves herself to them. That's it. Right now, that is ridiculously hard to find as opposed to just 3 years ago even. They used to be much easier to find because there used to be a lot more business. The lack of availability for such a job is highly unusual for her field and location and that's a bad sign.

In terms of education, I am the one working in the budget department of my county's school system. Not you. I'd say it is safe to assume that I know more about what is really going on in that area than you do.

I don't want everyone to be able to afford a house. I do think the middle class should be able to afford one though with ease without being limited to affording a run down shack in the ghetto which is about the only affordable housing in South Florida right now. I realize that is not the case in most parts of the country atm because their bubble has burst already, but it has not happened here yet. I know that it will eventually.

As far as the fifth point, I told you that some will find it flakey. I am not concerned about my mental health. I am a very happy person in general. However, my values when it comes to the quality of the atmosphere around me are clearly different than yours which is perfectly fine. You are not wrong to feel how you feel about that anymore than I am right to feel how I feel. The point is that it has nothing to do with responsibility. It is simply how it makes me feel and that does influence my daily life.


Last but not least, you wanted to know "what is it that you would fix?" and "what personally is happening to you and your circle". You did not ask how I would fix these issues. I answered your question. Remember...I am just one guy apart of one family with just one set of problems which are a result of the current situation in our economy. There are millions out there with their own problems as a result of this same economy. Just because you don't like my reasons doesn't mean they don't exist and it doesn't mean that improving the economy will not directly result in fixing them. I really don't care if you think they are important or not. We all have problems. We all have different priorities. We all hold different values. No one's feelings on the matter are better than the feelings of others.


 

dmcowen674

No Lifer
Oct 13, 1999
54,889
47
91
www.alienbabeltech.com
Originally posted by: jonks
More fake bad news about our thriving economy. When will these statistics stop lying? It's all in their head!

http://news.yahoo.com/s/ap/200...on_bi_go_ec_fi/economy

July incomes drop by largest amount in 3 years

WASHINGTON - Personal incomes plunged in July while consumer spending slowed significantly as the impact of billions of dollars in government rebate checks began to wane.

The Commerce Department reported Friday that personal incomes fell by 0.7 percent in July, the biggest drop in nearly three years and a far larger decline than the 0.1 percent decrease analysts expected.

Consumer spending edged up a modest 0.2 percent, in line with expectations, but far below June's 0.6 percent rise. When the impact of rising prices was factored in, spending actually dropped by 0.4 percent in July, the weakest showing for inflation-adjusted spending in more than four years.

You don't get it do you?

This doesn't affect the rich MRR's (Mental Recession Republicans) a bit.

It's "Mission Accomplished" for them.
 

Jaskalas

Lifer
Jun 23, 2004
33,952
8,007
136
Originally posted by: eskimospy
Pro-Jo you realize that inflation is outpacing growth at this point, right?

We need to redefine recession as any two quarter period where inflation is greater than growth, lest we be as thrilled and happy as the OP as we enter the Weimar Republic.
 

mshan

Diamond Member
Nov 16, 2004
7,868
0
71
Is what this guy is saying correct?"

"Overall gross domestic product popped 3.3 percent in the second quarter, but undermeasured inflation made the GDP leap rather like the guy in the falling elevator who hoped to save himself by jumping just before hitting bottom. "Nominal" GDP rose 4.6 percent, adjusted to "real," non-inflated dollars by subtracting the 1.3 percent inflation "deflator." The deflator, usually an excellent measure, is way too low right now: Actual overall inflation ran close to 5 percent in the second quarter, and real GDP thus was negative, as it was in the first quarter."
http://www.inman.com/buyers-se...risis-trumps-inflation

 

Engineer

Elite Member
Oct 9, 1999
39,230
701
126
Originally posted by: mshan
Is what this guy is saying correct?"

"Overall gross domestic product popped 3.3 percent in the second quarter, but undermeasured inflation made the GDP leap rather like the guy in the falling elevator who hoped to save himself by jumping just before hitting bottom. "Nominal" GDP rose 4.6 percent, adjusted to "real," non-inflated dollars by subtracting the 1.3 percent inflation "deflator." The deflator, usually an excellent measure, is way too low right now: Actual overall inflation ran close to 5 percent in the second quarter, and real GDP thus was negative, as it was in the first quarter."
http://www.inman.com/buyers-se...risis-trumps-inflation


It "ISN'T" if you believe that year over year inflation was only 1.3% for Q2 2008.
 

mshan

Diamond Member
Nov 16, 2004
7,868
0
71
Regarding the commentator I linked above's commentary on the Case-Schiller Index, here is someone else recent take on the same index:


"It is true that home prices have corrected more than any time in the past, and further price declines are likely. However, the methodology used to track resale home prices is overstating the actual correction. Some examples of reported overstatements in the resale market thus far are a 36% decline in value in Sacramento, a 31% decline in Port St. Lucie, a 24% decline in Las Vegas, a 24% decline in Orange County, and a 20% decline in Tampa.

The problem is that there has been a tremendous shift in the activity of what is selling, which is impacting even the best price indices, such as Case-Shiller-Weiss. Here is what you need to know:

1. Small Sample Sizes: Home buying activity has plummeted, which has significantly reduced the sample size of what is selling. Our research shows that sales volumes have plummeted back to early 1990s levels in many areas of the country. A low sample size reduces the validity of the conclusions.

2. Dominance of Foreclosures: Today, the low sample size is dominated by foreclosures and short sales. In Sacramento last month, 65% of the sales volume was a foreclosure or short sale. Our research shows that foreclosure sales are heavily concentrated in certain submarkets, which is generally the poorer inner-city areas and the most outlying areas.

3. The Use of Median Prices: Median prices are the best measure to track because the median-priced home is the home where half of the homes sold are more expensive, and half are less expensive. In normal times, this home represents a 20-year-old, 1,600 square foot detached home in a typical suburb. Therefore, in normal times, comparing year-over-year price changes is relatively representative of most homes in the market. However, the median transaction today is more likely to be 1,400-square-foot, less desirable home in the inner city or a new home sold at auction.

4. Bigger Price Declines on Distressed Home Sales: The most sophisticated measures like Case-Shiller-Weiss only examine the price changes on the same home, so the mix shift is supposed to be eliminated. However, when the current sample consists of mostly distressed transactions, the index does not accurately represent the broader market. The vast majority of homes are not distressed and are underrepresented in the current sample.

While the housing market and banking industry are under severe duress, it is important to know that most homeowners have not seen the decline in home value that is being reported in the newspaper. As always, we emphasize that the best decision makers use the most accurate information to make decisions."

http://realestateconsulting.co...tter=Local/local200806


 

SleepWalkerX

Platinum Member
Jun 29, 2004
2,649
0
0
Originally posted by: miketheidiot
lol i do some reading and learning right?

deflation causes lower prices you moron. We are not undergoing a 'deflationary' recession, if so, we wouldn't be seeing incresing prices of goods because deflation --> leads to lower prices.

You're forgetting a step in between deflation and lower prices. And that's scaled back production. Deflation means you have less money, which leads to less money circulation, which leads to scaled back production, which leads to foreclosures and practices going out of business, which leads to lower incomes, which leads to lower prices to reflect incomes (for a majority of goods).

If I'm right (and who knows? I may be completely wrong on this) we'll first see lots more unemployment and businesses ending. The good thing is that at least consumption is slowing down and savings is going up (or at least people paying off their debts).