the economy isn't as bad as you think IMO

[Deal Hunter]

The current economic "crisis" is a set up.  Everything is starting to fall into place for our entrenched political system to make the following occur:

Massive Tax Reform:   It will include:
1) Elimination of the mortgage interest deduction on primary homes
2) Re-structuring of tax tiers to eliminate AMT
3) Further movement of tax burden from corporations to individuals
All of the above is outline in Bush's Tax Reform Advisory Panel from 2005: http://www.taxreformpanel.gov/

Privitization of Social Security:  The first step will be upheaval of Wall Street rating systems (currently provided by Moody's, Fitch, and Standard & Poors).
Following that will be the collapse of at least one Investment bank and one Commercial bank.  The ensuing fiascos will justify that individuals get control of their retirement and entitlements as the government and large GSE's will be blamed for the falls.

Because the majority of the population is so uneducated about American style capitalism, the way money works, the global corporate system, and the true "market," the above will come to pass.  There will be a recovery of sorts, followed by an even bigger and more lasting economic collapse.

In 30 years, the typical American household will look like this:

A husband, a wife, their one child and 6-7 of their elder relatives all living under one roof, which will be a small 2-3 room condo in a massive 60 story housing complex in the middle of the city.  Water will cost more than gasoline does now and the children won't taste a fruit or vegetables that can't grow within 300 feet of where they live.

[propertymanager]

A husband, a wife, their one child and 6-7 of their elder relatives all living under one roof, which will be a small 2-3 room condo in a massive 60 story housing complex in the middle of the city.

I'm already seeing this in the rental business.  Several generations of family are starting to live together because they can't afford to rent on their own.  The only thing I'm not seeing is a husband and wife with one child.  I VERY RARELY see a married couple (people are just shacking up) and rarely one child.  Reality is more like 4 or 5 kids with 4 or 5 different men, all of the kids supported by you and me (the taxpayers, or more accurately the funny money printed by the government out of thin air)!!!

Mike

[rookieNYC]

A husband, a wife, their one child and 6-7 of their elder relatives all living under one roof, which will be a small 2-3 room condo in a massive 60 story housing complex in the middle of the city.  Water will cost more than gasoline does now and the children won't taste a fruit or vegetables that can't grow within 300 feet of where they live.

A real doomsday scenario...The water issues we are experiencing around the world are deeply troubling but I would bet that the earth's weather pattern has turned a corner..I would expect to see precipitation pick up drastically in the coming years...

[Roger J]

Wow.  You guys could depress a $20 Million lottery winner!

Seriously, the model presented has flaws, most notably, where is the data taken and how big of chuck of market are we talking about?  That said, using it as the example, the only comparable boom to the current housing situation is directly after WWII.  If you'll notice, the market only 'suffered' about a 10-12% drop in value during it's decline, not back to "pre-boom" figures, as suggested.  Holding that, you'd surmise that the MAX adjustment in this market should be only 20-24%.  If the top markets are already at 18% drops, then the bottom is near, correct?

And please, no flames.  I'm not saying that this IS what is happening, just showing that based on the model, that is the evidence presented.

It not worth getting into the whole "world is ending" argument again.  Quite frankly, it's all wild, rampant speculation based on skewed data.  Yes, skewed.  Data only becomes important once you know WHO is presenting it and WHERE the information came and HOW much of the information obtained was actually used.  The problem that I've seen with most of the data provided any ANY of these theories is that they are grossly leaning toward a particular viewpoint.

While a major bank collapse is possible (anything is possible) it's highly unlikely.  Fdjake, you mention that "Entire divisions of goverment were set up to keep a COMPLETE economic collapse from ever happening again."  I believe that I had used the word "safeguards" once before and was severely critized for it, but I digress.    Anyway, one of those 'divisions' was setup to keep large banks from going under.  Why?  That was one of the major reasons for the 1929 collapse.

So, if a big bank is failing, either the gov't, another big bank, or possibly even foreign funds will more than likely come in to "save the day."  Maybe even a combo of all three.

More concerning to me is actually the smaller banks which wouldn't have the same "focus" on them.  And I see signs of some major problems with them.

Most noticeable is that I am constantly getting calls from my lenders now on the 3rd of the month if they haven't received my payments yet.  The 3rd!, boys and girls.  Now, if you're not even late until the 15th, why bother people on third?  "It's just a friendly reminder about your payment.  You can make it over the phone if you'd like" is what they say.  What it means to me is that they need to collect so that THEY can pay somebody else.

Why this is bad?  If smaller banks go under, they won't get the same attention from the gov't as a larger lender would.  Also in this current economic situation, I believe that there would be far fewer larger banks willing and able to buyout/takeover the bank nor would they be able to handly the influx of new customers that a small bank closing would create.  THAT is what scares me.

Raj

[Deal Hunter]

While a major bank collapse is possible (anything is possible) it's highly unlikely.  Fdjake, you mention that "Entire divisions of goverment were set up to keep a COMPLETE economic collapse from ever happening again."  I believe that I had used the word "safeguards" once before and was severely critized for it, but I digress.    Anyway, one of those 'divisions' was setup to keep large banks from going under.  Why?  That was one of the major reasons for the 1929 collapse.

So, if a big bank is failing, either the gov't, another big bank, or possibly even foreign funds will more than likely come in to "save the day."  Maybe even a combo of all three.

No, I don't think the collapse of one or even two major banks will be the end of the world.  It is however, the perfect setting for Tax reform and Privitization efforts that have been in the works for 10-15 years.  With privitization will come the emergence of thousands of new financial products, rating companies, insurers, you name it.  This will cause a short boom in stocks (the next bubble?) The biggest hurdle that Privitization will overcome is government regulation of entitlement programs across the board.  Nothing like a little economic recession (or threat of one) to de-regulate the markets.  It is this perfect storm, of 1) increased tax burden on individuals, 2) privitization of social security, 3) further de-regulation of markets, that will pull the country toward the doomsday stuff.  It won't happen overnight - more like a slow leak or bleed over the next couple of decades.

If you don't believe me about what happens when banks/insurers/credit collapses, you may want to look up "LTCM."  It's a little known story of a bank bail-out back in 1998 of a company called Long Term Capital Management.  The de-regulation that resulted from that event, lay the groundwork of much of the bubble that grew over the last 15 years.

I guess what bothers me and others the most about the optimism of "They" won't let big banks fall and "They" will always bail out the economy, is that "They" are really our childrend, grandchildren and their children for generations to come.  Not only are workers unfairly burdened now with taxation, but that we so casually put the burden of today's bail-outs on the backs of our decendants.