Hello everyone - - Do you think the Economy is going to get better, worse, or pretty much stay the same ? I leave this open as to time frames. Please explain your thinking. - - Maybe youre on one side if this argument or the other; its always valuable to question your opinions - maybe they'll be changed. Of course, we can't absolutely predict anything. Those black swan events happen that toss all the crystal balls right out the window. Regards, - -
I believe that things will get much much worse but for now things are definitely getting much better....in housing anyway. In my neighborhood, new construction has been close to nonexistent for 2 years. In the last 3 months, houses have been popping up everywhere. I have notice traffic up and down my street has picked up and believe it to be people looking at the neighborhood and the remaining empty lots. We have enjoyed the quiet with empty lots all around for a while and it looks like that is coming to an end as new houses are creeping towards us in every direction. I live north of Fort Worth.
Until the unemployment rate begins to improve, conditions will get worse. ISM above 50 is only positive I can see.
the future obligations of the economy enormous so if the situation gets better now it is just amount of time before either the debt defaults and people lose money or the amount people have to pay back cripples growth. the biggest problem i see is when inflation rises and the government either increases interest rates or taxation either way it will cripple the economy and create big problems.
Though I started the thread, I'd like to find out what others think. Its easy to get locked into your own mode of thinking - to form an opinion and then see only what supports that, and ignore what doesn't. I guess that's human nature. Last time I checked the VIX was in the low 20s - - not exactly pessimistic, at least as far as the stock market goes - - in the nearer term. In the mid term - say a year or two out, I think we'll see a worsening macro-economy. Not too many people are making real top line earnings (you can't 'cost cut' to prosperity). Likely increasing unemployment. More draining of resources away from what productive economy there is into the non-productive government sector. Rise in prices reflecting the underlying inflation of the money supply by the Fed - in what sectors of the economy will that show up ? A million dollar question, who knows ? It often shows up in the capital goods sectors. - - Bottom line, I don't think its going to get better for awhile. I dont find a Japan like 20 years of crap economy situation to be outside of possibility either. They did the interest rate cuts, save the 'too big to fails' , and public works projects till they practically paved themselves over too. Everything they shouldnt have done and that our 'leaders' seem to be following . - - -
This is largely a statistical recovery. On a year-over-year basis, things are bound to look better now since we're comparing to the worst of the credit crisis a year ago. It may go on for a bit, but under the current regime, the best case scenario is a double-dip recession and 70s style dismal economy and flat/ranging stock market. Again, that's best case.
I believe things will continue to get better in the short run, if for no other reason than the negative consequences surrounding the stupidity of 9/08-til now has not had time to manifest. Long term I think we are screwed especially if PEElosi-care and cap 'n tax get passed. I predict the next crisis will be a result of the fed attempting to remove liquidity from the system. The real question is: Is it inevitable that the US must crash and burn economically in order to purge the ubiquitous meme of "getting something for nothing" out of the national consciousness.
I happen to agree with you. When the Fed attempts to take that liquidity back it might get really bad in a hurry. The other scenario might be that they never try to take it back. They will always look at some economic statistic that prevents them from doing so. We most likely will end up with a wild swinging stock market like the seventies where the Fed is either pushing the accelerator or pushing the brake with no real progress in either direction.
Odds favor they NEVER drain liquidity. In so doing the economy will slow, and THAT will be their excuse to "not". "Drain the liquidity" is like "concern over deficts".... all they ever do is MENTION it... and never actually do it.
At the time I'm making this post, there are 5 people who believe the economy will get better (I'm assuming they mean over a longer term than just an immediate time frame). Why do you believe that ? What evidence convinces you of that ? There are quite a few people who believe the economy will be the same - well that's not particularly good right now. What would keep it that way ? Why wouldnt it either improve or decline ? (Thats about 40% of people being 'kinda optimistic' - thinking things won't be getting worse.) Thanks, - -