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Old 08-24-2019, 10:35 AM
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Well I'll let you guys know when the recession officially hits, as my area (heavy into manufacturing) gets hit first, hardest and last to recover.
Led the nation on unemployment under the Reagan recession (but it was short) and was really bad under the Obama one (very long lasting).
Lots of highly skilled trademan couldn't buy a job in the last one.
I got caught in it but I took my free time to make improvements to my house and property. Turn lemons into lemon aid.
All those Asshat companies that sold out the American worker for the cheap communist labor of China are getting there just desserts now.

I have a lot of confidence that Trump knows what he is doing.
Even if there is a recession it's doubtful to me that that it will swing the election as the Democrats are so out of touch with many that would otherwise vote Democratic.
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Old 08-24-2019, 11:27 AM
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Interest rates? At today's artificially low rates, the interest we paid on the national debt is right at $500 billion tax dollars--which is the first call on federal budget money.

I shudder to think of the effect on the economy--and on taxation rates--were the fed's rate to go near the long-term average in the 5%-6% range.
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Old 08-24-2019, 06:31 PM
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Economic growth has been weak since 2008, and not just for the U.S. but for the global economy. Few countries are gaining and only because they did not have much to lose in the first place.

The main causes of this are rising debt, which is part of any capitalist system, and made worse by financial deregulation, peak oil, and environmental damage.
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Old 08-24-2019, 06:55 PM
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Quote:
Rising food cost means either less is being produced or more people are buying food.
That is a very simplistic view.

There are many factors making food more expensive

Energy costs are rising and food production uses a lot of energy for production and transportation.

Climate change resulting in less desirable growing conditions.

Biofuels are consuming a lot food production capability. Almost half our corn is used to make ethanol.

Trade issues limiting the amount countries can trade, stockpile and subsidize.

Competition from third would countries who are now eating far more meat than they used to which is generally raising prices in the first world as their quality of life increases in the third. (Remember, its all a zero sum game)
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Old 08-24-2019, 07:06 PM
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But it's not just more people buying food or less food , it's not just higher prices , it's a lot of folks are not making the same they were just a year ago it's that the money no longer stretches as far. My point is there is less money for even small splurges such as resturant meals here in my area resturant sales are flat, movie theaters dead, the people you see shopping are buying only what they need no extras I have saw it an heard about for over a year and the cycle contuines as the resturant and other places then lower hours for employees so they can afford less an less. Now I know other places are going just great, I heard all about that on the thread I made however that does not mean the overall economy is great or even that it's not it's just something to look at.
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Old 08-24-2019, 08:57 PM
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Quote:
Originally Posted by ralfy View Post
Economic growth has been weak since 2008, and not just for the U.S. but for the global economy. Few countries are gaining and only because they did not have much to lose in the first place.

The main causes of this are rising debt, which is part of any capitalist system, and made worse by financial deregulation, peak oil, and environmental damage.
Could you support that with some data?
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Old 08-24-2019, 11:49 PM
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Originally Posted by Hoka-hey View Post
Led the nation on unemployment under the Reagan recession (but it was short) and was really bad under the Obama one (very long lasting).
Amazing.
When polled about nearly a third of those polled blamed Obama for Katrina's response and an additional 44% stated they didn't know who was responsible Bush or Katrina.
https://www.theadvocate.com/gambit/n...4fa80de03.html

The above comment clearly shows, you'd be one of those people. "Obama's recession" was Bush's recession. It was ongoing and stared in 2007 Obama swore in Jan of 2009.

When folks talk about the blind partisan divide in this nation. They see people like this as the reason.

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I have a lot of confidence that Trump knows what he is doing.
Your confidence about shows by the fact you don't understand when the last recession happened and who was responsible.
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Old 08-25-2019, 09:53 AM
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The root cause of the "great recession" was the Democrat Congress mandating bad mortgage loans (aka sub-prime lending). This resulted in a housing price bubble, over building, and credit default swaps. All this was made worse by the Fed continually increasing the Fed rat for too long and too high. This resulted in even those that would have tried to keep their homes being unable to because they foolishly chose ARM rather than fixed rate mortgages.
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Old 08-25-2019, 02:27 PM
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The root cause of the "great recession" was the Democrat Congress mandating bad mortgage loans (aka sub-prime lending). This resulted in a housing price bubble, over building, and credit default swaps. All this was made worse by the Fed continually increasing the Fed rat for too long and too high. This resulted in even those that would have tried to keep their homes being unable to because they foolishly chose ARM rather than fixed rate mortgages.
I could tell you stories about the overbuilding in my area. When the SHTF one of the big builders left the country vs lose everything he had.
My Cousin ( a GC) couldn't sell the 500k house he built so he moved in and sold his modest home.
My builder lived in the next home he built because he couldn't sell it ( rented out his home).

One thing not talked about is the spike in gas at this time that was squeezing everyone's wallet.

Trump likes to toy with the media but he has a plan.
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Old 08-25-2019, 03:16 PM
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Originally Posted by PalmettoTree View Post
The root cause of the "great recession" was the Democrat Congress mandating bad mortgage loans (aka sub-prime lending). This resulted in a housing price bubble, over building, and credit default swaps. All this was made worse by the Fed continually increasing the Fed rat for too long and too high. This resulted in even those that would have tried to keep their homes being unable to because they foolishly chose ARM rather than fixed rate mortgages.
Glass-Stengle was repealed under a Republican-controlled congress. Whoever is force-feeding you facts needs to grab a few of their own.

The greedy banks and wall street tycoons overlending led to this not a political party.

Yet another intellectual dishonest post.
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Old 08-25-2019, 04:34 PM
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Glass-Stengle was repealed under a Republican-controlled congress. Whoever is force-feeding you facts needs to grab a few of their own.

The greedy banks and wall street tycoons overlending led to this not a political party.

Yet another intellectual dishonest post.
I am assuming you mean the repeal of parts of the Glass-Stengle Act in 1999. This did not cause the housing crisis or the recession. It worked find until the Dodd Frank Act.

Frank and Dodd's Community Reinvestment Act forced lending institutions to make bad loans contributing to the mortgage crisis, the root cause of crisis was Frank and Dodd's reduction of mortgage buying standards at Fannie Mae and Freddie Mac, which provided liquidity to mortgagees by buying the loans the mortgagees made to the public. Frank and Dodd passed legislation weakening Fannie and Freddie's buying standards, all mortgages purchased off the primary market by these two Government Sponsored Enterprises adhered to Federal Housing Administration standards, i.e. they were "prime" loans. Frank, Dodd, and their ilk caused subprime lending, and, glutted Fannie and Freddie with worthless mortgage paper. Fannie and Freddie sold the bad loans to institutional investors buying them with cheap capital provided by the Fed. Trillions of dollars invested in derivatives particularly by Big Banks created the financial crisis.

Without Dodd-Frank involvement in CRA there would have been no housing crisis because there would have been no bad loans. With Glass-Stengle in full force but with Dodd-Frank junk loans there would have still been the housing crisis.
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Old 08-25-2019, 04:42 PM
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Nope.

https://www.investopedia.com/terms/g...eagall_act.asp
Quote:
KEY TAKEAWAYS
The 1933 Glass-Steagall Act drew a distinct line between the banking industry and the investment industry, forbidding a financial institution to be both a bank and a brokerage, in effect.
The Glass-Steagall Act was largely repealed in 1999 by the Graham-Leach-Bliley Act (GLBA), allowing commercial banks to engage in investment banking and securities trading.
In the wake of the financial crisis of 2008-09, interest in reviving the Glass-Steagall Act or passing similar bank-regulating legislation to protect consumers has grown.
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Old 08-25-2019, 06:26 PM
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Yep, After 1999 things continued just fine. It was not until Dodd-Frank started trying to force poor lending practices. That started a turf war among the half-dozen or so agencies plus Congress over banking and lending standards and practices. To end run these conflicts between capital requirements, lending standards, and subprime lending dictates Dodd-Frank lowered the Fannie Mae and Freddie Mac standards for buying loans. Once the standards were reduced mortgage brokers popped up everywhere.

They would make loans to "Government Sponsored Enterprise" standards(aka Dodd Frank standards). These brokers would pocket the initial charge of the mortgage and sell the subprime loans. In an attempt to reduce the risk, these loans were packaged into groups and sold. Then try to offset the risk with "credit default swaps". (somewhat an over simplification).

To make subprime loans even more attractive to subprime borrowers ARMs (adjustable rate mortgages) were created. These mortgages started with very low interest rates with a set date for adjustment with the adjustment based on prime rate plus, Fed rate plus or come complicated index. Pre-2008 the adjustment period was much shorter than today and in many cases had no adjustment limits.

What ever the adjustment rate factor was it could always be traced back to the Fed rate. So for example if a person took out a mortgage with a low rate but adjustable after a year. The Fed was adjusting the Fed rate every 3 months. Theoretically the Fed rate could go up 4 times within that year.

This means even if some of these subprime borrowers wanted to pay by the time the rates were adjusted they could not come close.

There were many moving parts. If Dodd-Frank had not required and made it possible for unqualified people to get mortgages, the housing demand would not have been as great; the prices would not have went up as much; or as fast; bad financial instruments would not have been created as a hedge; the Fed would have increased the Fed rate 17 times all leading up to the crash.

I have kept track of all this mess since 1972. I made loans for 2 years '72-'74. Purchased and sold 4 homes, purchased acreage, and purchased 3 homes I still own. Some of this during the period in question. I not only know a little about what I am talking about but have experienced it. I remember when mortgage rates were 9%. I remember thinking mortgage rates would never get below 5% much less as low 3%.

If the Glass Stegall Act was still in full force mortgage rates would not ever have gotten as low as they have.

Free advice take it or leave it. Never take out an ARM mortgage. Never take out a mortgage for more than 20 years, 15 or 10 years if you can. Usually 15 is the shortest time but you can still make payments as if it is a 10 year mortgage.
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Old 08-26-2019, 03:40 PM
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I think they meant to say "reelection."
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Old 08-26-2019, 09:35 PM
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after reading through 3 pages of this thread, still not sure if we are all going to get gold plated houses or if we are sinking on the titanic.

i think since our measure of the economy (GDP) is simply a record of quantity of transactions, it may not be the greatest indicator of prosperity... it could just mean that we have more net consumers than producers. debt to GDP gives a little more granularity, but that only takes public debt into account. total debt is pretty telling, and we are probably past the point of no return on both total and public debt. all of these only take into account national variables and not international comparisons, so we are probably better off than any other country... so i think the question is more about the global economy than the national/state/local economy.

bottom line is you need to be diversified/hedged and prepped... asking if the economy will collapse is foregone... I think most folks here are just trying to predict when the economy will collapse, and that is very difficult. if you have the vast majority of your net worth in US common stock, i think you can safely sell soon to take a profit, if we make it through another cycle you can always reinvest after a price drop.

https://usdebtclock.org/
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Old 08-27-2019, 10:46 AM
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Insider sales of stocks is running at some $600 million per day, so far this month.
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Old 08-27-2019, 03:05 PM
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Insider sales of stocks is running at some $600 million per day, so far this month.
I never paid much attention to this metric but here is the chart.

http://openinsider.com/charts
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Old 08-27-2019, 09:37 PM
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I never paid much attention to this metric but here is the chart.

http://openinsider.com/charts
Thanks for the link. Certainly doesn't look like a promising indicator.
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Old 08-27-2019, 10:43 PM
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Originally Posted by PalmettoTree View Post
I never paid much attention to this metric but here is the chart.

http://openinsider.com/charts
seems like we are close to where we were December 2018 in terms of sales over buys... looks like it has crossed several times in the past year as well... not sure what to interpret from this.
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Old 08-27-2019, 10:49 PM
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Buy gold folks.

Precious metals weather the storm.

Sent from my Note 8 using Tapatalk
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