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Originally posted by FlankerFlyer:
IMHO we went into recession in the 3rd quarter of 2007 when oil and food started their meteoric rise into the stratosphere while housing went deep into the tank.
Due to this administration's fuzzy math, the GDP numbers among other "economic indicators" used currently failed to show the recession we are in.
ANY GDP growth can be easily offset by inflationary forces in both food and energy as well as a very large increase in credit spending despite the housing mess.

When you discard the Bush administration's fuzzy math we find that we now face 4+% inflation and since "growth" has been due to excessive borrowing and those inflationary pressures I mentioned, we have actually been in a real recession since 3rd quarter 2007 and will continue to be until probably mid 2009.
Although the housing/mortgage crisis is now aproaching rock bottom we now have to contend with the credit card crisis which has been brewing since march of this year as people simply choose to "charge it" rather than make the necessary changes required to meet the new economic challenges we face with high energy and food prices. That is why we have only seen a slight decrease in gas usage over the last 6 months of 1.4% when it should be much more while the average amount of credit card balances among the American populace continues to break records month after month.
The Fed only complicated matters by lowering interest rates which was akin to trying to stop a steam roller with a paper wad. It only made matters worse and ruined the dollar.
Our economy can improve only if congress lifts the ban on oil exploration and thousands enter the workforce in energy related fields.
The oil industry could add hundreds of thousands of jobs in only a year to 18 months if this ban is lifted and energy prices could come down to 80/bbl within months of this even being announced.
If a "moonshot" type mentality were adopted, the USA could be energy independent in less than 7 years and give a very huge kick start to the American economy in the process.

However, If Obama becomes president, his radical marxist policies will send the USA into a great depression not seen since the 1930s

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Originally posted by FlankerFlyer:

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Aditionally, commercial loan defaults are on the rise. Not exactly sure what is driving that. I am sure some of it is developers.

That may have alot to do with overdevelopment in both retail space and motel/hotel capacity.

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The softening economy and the collapse of the housing market caused U.S. businesses to file for bankruptcy protection at a higher annualized rate than individuals, according to data compiled from June court records.

Bankruptcy filings in the U.S. during the month rose 33 percent from a year earlier and may surpass 1 million in a year for the first time since bankruptcy laws were tightened in October 2005.

Individuals this year have filed at an annualized rate that is 23 percent above 2007, while total commercial bankruptcies rose 34 percent, data compiled by Jupiter eSources LLC in Oklahoma City show.

Companies filing for Chapter 11 reorganization also rose at an annual rate of 34 percent above the 6,241 filings in 2007.

The Labor Department tomorrow may report that payrolls fell for a sixth straight month in June, according to a Bloomberg News survey. The U.S. lost 49,000 jobs in May, when the unemployment rate increased by half a point to 5.5 percent, the biggest jump in the jobless rate in more than two decades.

The U.S. economy expanded at an annual rate of 1 percent in the first quarter, the Commerce Department said last week. The revised figure, up from 0.9 percent released in May, caps the weakest six months of growth in five years.

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Originally posted by OrangeCat97:

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The number of homeowners stung by the rout in the U.S. housing market jumped last month as foreclosure filings grew by more than 50 percent compared with June a year ago, according to data released Thursday.

Nationwide, 252,363 homes received at least one foreclosure-related notice in June, up 53 percent from the same month last year, but down 3 percent from May, RealtyTrac Inc. said. One in every 501 U.S. households received a foreclosure filing last month.

Foreclosure filings increased from a year earlier in all but 11 states. Nevada, California, Arizona, Florida and Michigan continued to have the highest foreclosure rates.

Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions. More than 71,000 properties were repossessed by lenders nationwide in June, the company said.

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Originally posted by OrangeCat97:
You KNOW things are getting bad when even the prostitutes have a free gas offer to bring in customers!!!
http://www.freerepublic.com/focus/f-news/2037662/posts

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What this country needs is either a good 5¢ cigar or the reincarnation of an Illinois “rail-splitter” willing to tell the American people “what up” – “what really up.” We have for so long now been willing to be entertained rather than informed, that we more or less accept majority opinion, perpetually shaped by ratings obsessed media, at face value. After 12 months of an endless primary campaign barrage, for instance, most of us believe that a candidate’s preacher – Democrat or Republican – should be a significant factor in how we vote. We care more about who’s going to be eliminated from this week’s American Idol than the deteriorating quality of our healthcare system. Alternative energy discussion takes a bleacher’s seat to the latest foibles of Lindsay Lohan or Britney Spears and then we wonder why gas is four bucks a gallon. We care as much as we always have – we just care about the wrong things: entertainment, as opposed to informed choices; trivia vs. hardcore ideological debate.

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The U.S. seems to differ from the rest of the world in how it computes its inflation rate in three primary ways: 1) hedonic quality adjustments, 2) calculations of housing costs via owners’ equivalent rent, and 3) geometric weighting/product substitution. The changes in all three areas have favored lower U.S. inflation and have taken place over the past 25 years, the first occurring in 1983 with the BLS decision to modify the cost of housing. It was claimed that a measure based on what an owner might get for renting his house would more accurately reflect the real world – a dubious assumption belied by the experience of the past 10 years during which the average cost of homes has appreciated at 3x the annual pace of the substituted owners’ equivalent rent (OER), and which would have raised the total CPI by approximately 1% annually if the switch had not been made.

In the 1990s the U.S. CPI was subjected to three additional changes that have not been adopted to the same degree (or at all) by other countries, each of which resulted in downward adjustments to our annual inflation rate. Product substitution and geometric weighting both presumed that more expensive goods and services would be used less and substituted with their less costly alternatives: more hamburger/less filet mignon when beef prices were rising, for example. In turn, hedonic quality adjustments accelerated in the late 1990s paving the way for huge price declines in the cost of computers and other durables. As your new model MAC or PC was going up in price by a hundred bucks or so, it was actually going down according to CPI calculations because it was twice as powerful. Hmmmmm? Bet your wallet didn’t really feel as good as the BLS did.

In 2004, I claimed that these revised methodologies were understating CPI by perhaps 1% annually and therefore overstating real GDP growth by close to the same amount. Others have actually tracked the CPI that “would have been” based on the good old fashioned way of calculation. The results are not pretty, but are undisclosed here because I cannot verify them. Still, the differences in my 10-year history of global CPI charts are startling, aren’t they? This in spite of a decade of financed-based, securitized, reflationary policies in the U.S. led by the public and private sector and a declining dollar. Hmmmmm?

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Originally posted by floersh:

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Originally posted by bill_kananen:
The ec**omy took several hits at **ce. This was due to inept policies and inept regulators.

With the libs taking over the country we can look foward to expensive give-a-ways.

I d**'t see a quick recovery in our future.

I think your right. I currently believe we are heading to a very long recession. One unlike any I have seen in my lifetime. Probably lasting 4 to 6 years. Maybe even longer. I believe that because of this is being driven by energy as much as the credit crisis. Two major economic anchors this time around.

I don't know if it will really matter which party wins the elections.

My worry at this point is if we will really call it a recession or if it will actually be more of a depression. I am keeping my eye on the banking/credit crisis. Way to many people believe its not even close to being over. And there are tons of financial experts warning people to ensure they have their money FDIC insured. Does the government have the money to back up that insurance if some of these banks start going under without further devaluing the dollar and driving up energy even further? From what I am reading it sounds like 10s if not 100s of billions of deposits are at risk.

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Originally posted by john2x:

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Originally posted by floersh:

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Originally posted by bill_kananen:
The ec**omy took several hits at **ce. This was due to inept policies and inept regulators.

With the libs taking over the country we can look foward to expensive give-a-ways.

I d**'t see a quick recovery in our future.

I think your right. I currently believe we are heading to a very long recession. One unlike any I have seen in my lifetime. Probably lasting 4 to 6 years. Maybe even longer. I believe that because of this is being driven by energy as much as the credit crisis. Two major economic anchors this time around.

I don't know if it will really matter which party wins the elections.

My worry at this point is if we will really call it a recession or if it will actually be more of a depression. I am keeping my eye on the banking/credit crisis. Way to many people believe its not even close to being over. And there are tons of financial experts warning people to ensure they have their money FDIC insured. Does the government have the money to back up that insurance if some of these banks start going under without further devaluing the dollar and driving up energy even further? From what I am reading it sounds like 10s if not 100s of billions of deposits are at risk.

All the fed will do is print more worthless paper and that will continue till the fed Reserved is abolished and the authority to print us currency is brought back to where it belongs. The US Treasury and backed by silver or gold. Weve been being lead down the primrose path since Wilson bought into this scam and later regretted it. How can self serving private industry even be considered logical?

Kennedy recognized this and started to make the transition back. The two dollar bill being the first and backed by silver. Look what that got him.

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Nope, the Fed provides elasticity and flexibility to the money supply.

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Originally posted by john2x:

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Nope, the Fed provides elasticity and flexibility to the money supply.

Its allowing us to spend money we dont have. People who ran thier housholds in this fashion spending what they dont have on credit are the ones who are in trouble today losing thier homes and barely able to make the interest payments on loans. This practice is being passed down to the youth of the country who want to run before theyve mastered walking. Spoiled and enjoying the good life without a thought of tommorow or financial stability. Credit credit credit and interest. Till the bubble busts. Thats how the country operates and the Fed is more than happy to accomodate.

If were going to pay interest on worthless paper
Why not just print it ourselves? Why do we need a central bank?

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Originally posted by 18476586:
Well according to a public official recently we are just imagining problems in the economy and all is well...We should stop complaining..

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Originally posted by DCookeUSA1:
There would be consequences to eliminating the Federal Reserve, which must be looked at and understood. The only way it could be done effectively is to eliminate interest income. No more bonds (taxpayer money). Treasury Bills, Treasury Notes would be gone too.

Bonds are easy money - why should they necessarily be eliminated? Someone goes to school, works hard, puts together a business plan, starts a business and sells it for 20 million, and puts 20 million into government bonds and then goes and hangs out in the Caribbean and lives off the 75k or so a month the bonds bring him for life. Are you sure you want to take that away?

Interest you earn at the bank would be gone also. You'd have a completely different dynamic, and I'm not completely sure it'll be better.

People with a lot of money would be forced to earn a rate of return through real estate or by operating businesses and franchises, profits from the market, dividends, things like that.

Mortgages would still be there, but rates wouldn't fluctuate that much. You'd have rich companies lending out their own money on their own terms, so maybe that would be better.

Inflation WOULD be greatly reduced, as people who earn interest income now will be forced to compete with each other more and produce goods and services, if they want to keep their money and keep income and a rate of return coming in. The person in the above example would have to be a lot more proactive with his money to keep getting that 75k a month.

There are many other aspects also which all must be considered.