News Double dip recession?

[ar81]

Meredith Whitney: "No Doubt We Have Entered A Double-Dip For Housing"
Now we know where did recovery come from.
People are buying because they are not paying their mortgages.
Without increase of employment and no increase in wages in US, without the bill to create jobs, it was quite strange that there was recovery in US.

Microeconomical vision of people is causing a macroeconomical imbalance.

Size of consumer market = Employment * Wages

Not paying mortgages means paying rent, which is quite deflationary.
As consumer market shrinks it seems we are getting closer to the unthinkable: A market without customers.

 

[Moach]

and they say rocket science is complicated... gee...

 

[Mantis]

We've been out of recession for nearly a year in Canada. In fact our economy is outpacing even the most optimistic projections. Compared the the recession of the early 90s, this was a piece of cake for us. We were about the last to go into recession and about the first to come out of it.

 

[anemazoso]

Meredith Whitney: "No Doubt We Have Entered A Double-Dip For Housing"
Now we know where did recovery come from.
People are buying because they are not paying their mortgages.
Without increase of employment and no increase in wages in US, without the bill to create jobs, it was quite strange that there was recovery in US.

Microeconomical vision of people is causing a macroeconomical imbalance.

Size of consumer market = Employment * Wages

Not paying mortgages means paying rent, which is quite deflationary.
As consumer market shrinks it seems we are getting closer to the unthinkable: A market without customers.

The reason the housing market started to come back a bit in late '09 and the beginning of this year is due to a large tax credit granted as part of the recovery act. It was called the "Fist Time Home Buyers Tax Credit" it was for $8000 (something I took advantage of btw).

Now the tax credit has expired and buying is slowing again without a stable job market to pick up the slack. But this is easier to come back from and doesn't contain the systemic failures of the last housing crash.

 

[Linguofreak]

But this is easier to come back from and doesn't contain the systemic failures of the last housing crash.

Which assumes that it's separate from the last housing crash, rather than the two being the same crash with a band-aid masking over the middle. And as for "systemic failures", I wouldn't be so confident that they're gone. The attitude people have towards money doesn't really seem to have changed.

 

[anemazoso]

Which assumes that it's separate from the last housing crash, rather than the two being the same crash with a band-aid masking over the middle. And as for "systemic failures", I wouldn't be so confident that they're gone. The attitude people have towards money doesn't really seem to have changed.

Financial regulation WILL pass and the current downturn is not yet a "crash" only a dip.

I would argue that the first crash caused this second dip. The crash caused most of the economy to crash, jobs were lost and now that housing prices are back down to affordable not enough people are back to work yet to cause a signifcant rise in sales. The sliver lining though is that per capita income has has not fallen much and defation has eased the pain of wages not rising. On top of that factory jobs have been coming back to the states because a lot of the high end stuff like aerospace was a disaster to outsource so domestic maunfacturers have been moving back to domestic vendors.

Right now the US economy is going through a serious tune-up. Changing spark plugs and fluids. Soon it will be humming right along again (of course not soon enough!). But these things take time. After most recessions jobs take a long time to recover. This recession is no different.

 

[ar81]

:lol: The difference between dip and crash is... acoustic?? :lol: