Double Dip Recession coming our way? What do you think?

[MagicNakor]

Double Dip Recession coming our way? What do you think?

I think it's bullshit 'doom and gloom' talk, for the sake of a headline.

Unfortunately the nature of markets makes that continual sort of talk very dangerous. Of course, invest in the right things...and it can make one very wealthy.

[999969999]

Some of the points in the article seem to be already at our door...


"The cost of homes in the areas where prices have already dropped by 50% or more will continue to fall. These regions typically have the highest unemployment rates, the local governments are hard pressed to offer basic services, and potential buyers are aware that home prices could drop further. Real estate values in these areas could drop another 20%. In the rest of the country, protracted unemployment and the unwillingness of banks to lend would make otherwise attractive all-time low mortgage rates unappealing."

In Arizona, for instance, home prices are still dropping. Just recently a speculator bought a foreclosed home down the street from me for about half of what it originally sold for, and then he fixed it up and tried to sell it again, and no one has made an offer on it. We talked to him about it and he said he made a huge mistake not waiting for the price to drop further before buying it.


"One of the primary reasons that consumer buying activity did not grind to a halt at the beginning of the last recession was that people still had access to a huge reservoir of home equity loans most of which were taken out at the peak of the real estate market in 2005 and 2006. The New York Times recently reported that “lenders wrote off as uncollectible $11.1 billion in home equity loans and $19.9 billion in home equity lines of credit in 2009, more than they wrote off on primary mortgages, government data shows. So far this year, the trend is the same.” Retail activity was helped somewhat by the capital available on these lines of credit, so store closings were probably deferred to the latter part of 2008. With more than 11 million mortgages underwater, 24% of the national total, and several million more within a few percentage points of being negative, the consumer will have no cushion as the economy deteriorates over the next six months."

This is what is taking a huge bite out of consumer spending and consumer confidence. They don't have any home equity left.

[che]

Ireland has just announced that it has gone into recession again. It has it's own set of unique set of circumstances but is it the pre-cursor for Europe?

[j2k4]

Ireland has just announced that it has gone into recession again. It has it's own set of unique set of circumstances but is it the pre-cursor for Europe?

Well, there sure are a lot of other things that move left-to-right, so...yeah, probably a precursor.

[orcka]

double dip?.As far as most are concerned it's just one long recession.

[999969999]

double dip?.As far as most are concerned it's just one long recession.

Yeah, for the average person, it has been just one long recession with no recovery whatsoever.

It's not easy to build a strong economy by delivering pizzas to each other (in other words, relying on the service side of the economy rather than on manufacturing and exporting more than we import).