Just so everyone is clear on what a recession is

Damocles said:
It helps the other party if people feel a "recession".
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Yeah - but who is the "other party?"

With Democrats controlling Congress, they're in just as much trouble as the GOP if things head south next year.

I am genuinely concerned at this point. I have felt for years that overinflated home values and over-extended credit (often against those home values) was propping up an otherwise fairly weak economy. New reports out today show the housing market tumbling further, and consumer confidence at low levels.

This is a fairly unprecedented set of circumstances; there is reason for concern.
 
Chapdog said:
its like false advertising.. cnnmoney last night had top headline with words recession in it. How can news outlets be talking about recessions when we have not had a negative quarter yet. Q4 will not be negative.. and by all current forecasts there is not negativity for 08.

believe the hype if you want to. im sticking to fundamentals of economics. when we have a negative gdp quarter then i will admit risk of recession.
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All of this is not to say the media isn't over-hyping crap... because they are blowing things up. One day everything is great, the next they act like it is doomsday. They are sensationalist by nature.

But bottom line, people are tightening their belts. Many are worried about what happens with their mortgage, because they know they bit off more than they could afford. IF the Fed acts now and slashes rates, they can stem the mortgage problems that will occur with the resets that will take place next year.

Grain is high, energy high, building materials high, current account deficit is horrid, dollar very weak, financial sector has yet to take the writeoffs of their bad debt (for the most part)..... all of this points towards problems ahead. Lets worry about it now, BEFORE it gets worse. Try to stem the tide. Prediction....Fed cuts rates by another 50-100bps on the 11th.
 
that will be sweet.. tho the 30year mortgages are still at historic lows.

right now: 5.82% 30year fixed on bankrate.com

basically if you cant refinance to a 30year and afford it from the one your in now then you shouldn't be in that house.
 
Chapdog said:
that will be sweet.. tho the 30year mortgages are still at historic lows.

right now: 5.82% 30year fixed on bankrate.com

basically if you cant refinance to a 30year and afford it from the one your in now then you shouldn't be in that house.
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On that I agree completely.

But the problem lies with those that cannot afford the 30 fixed. Not sure if you saw the article in the journal yesterday, but that couple is a perfect example of why we need the fed to lower rates. Way too many people in that situation at this time.
 
well then offer a 50year fixed loan.. keeps them in home.. offers them rate protection and a chance to build some equity back so they dont have to file bankruptcy.
 
Chapdog said:
well then offer a 50year fixed loan.. keeps them in home.. offers them rate protection and a chance to build some equity back so they dont have to file bankruptcy.
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I think that may be what ends up happening (or something like that)... or the government may just force the original lenders to issue fixed 30 years regardless of credit to rectify issuing the damn ARMs in the first place.
 
There should be a new regulation on home lending. If you do not qualify for a 30 year fixed, you do not get the loan. If you do qualify, THEN you can choose to go with an ARM etc... if you desire.
 
I agree with Lorax there is plenty to worry about. There doesn't need to be a recession for people to be hurting.
Continued bad trade deals and the average joe getting the shaft on wages is a biggy.
Housing will over correct and so will the market like they did on long term capital in the 90's. Lower rates from the fed will take a bit of time to juice the economy.
IF you look at long term housing prices averaging 6% a year they don't have much more to fall to get in line.
 
lol with the recession fears talk.. its so over hyped. 2 quarters negative gdp folks.. we have not had 1 yet. wont have in Q4.. not forcasted to for all of 08.
 
Superfreak said:
There should be a new regulation on home lending. If you do not qualify for a 30 year fixed, you do not get the loan. If you do qualify, THEN you can choose to go with an ARM etc... if you desire.
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i also think people should have money invested. i was able to get a 260K loan with cashback and nothing down.. with no assets for most part. now thats risky practice.
 
Superfreak said:
I think that may be what ends up happening (or something like that)... or the government may just force the original lenders to issue fixed 30 years regardless of credit to rectify issuing the damn ARMs in the first place.
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whatever ends up happening.. plenty of options to counter the dismal predictions people have. not like nothing we can do in this situation..

50year loans,
forced 30years..
extensions on balloon payments.
etc..
 
Superfreak said:
No, by that definition, there was indeed a recession in 2000/2001. Negative GDP growth for the third and fourth quarters of 2000 and the first quarter of 2001.
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i was correct; no recession in 2001; but it now seems, if you are correct (and I believe yhou are not), then there was indeed a CLOWNTOON recession in 2000..........shrub didn't take office until 2001.................you need to get your facts straight.
 
"The U.S. economy shrank in three non-consecutive quarters in the early 2000s (the third quarter of 2000, the first quarter of 2001, and the third quarter of 2001). Strictly speaking, the U.S. economy was not in recession during this period -- the common definition being "a fall of a country's real gross domestic product in two or more successive quarters."

sorry; no recession by definition
 
HipLew said:
"The U.S. economy shrank in three non-consecutive quarters in the early 2000s (the third quarter of 2000, the first quarter of 2001, and the third quarter of 2001). Strictly speaking, the U.S. economy was not in recession during this period -- the common definition being "a fall of a country's real gross domestic product in two or more successive quarters."

sorry; no recession by definition
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thats not the definition.. "real gdp"

its actual GDP growth.
 
well based on the buy low sell high theory.. u would want to sell before recession is announced and buy when its announced.
 
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