The Great Recession - post mortem

[Passacaglia]

Date.......Inventory 25th Pctile Median 75th Pctile
03/17/2008 61,999 $199,000 $289,500 $429,900
03/10/2008 60,823 $199,000 $289,000 $429,900
03/03/2008 60,614 $198,900 $287,250 $429,500
02/25/2008 59,954 $199,000 $286,000 $429,500
02/18/2008 59,427 $199,000 $285,000 $425,900
02/11/2008 58,169 $199,000 $285,000 $429,000
02/04/2008 57,913 $198,900 $284,990 $425,000
01/28/2008 57,373 $198,900 $285,000 $425,000
01/21/2008 56,298 $198,040 $284,900 $425,000
01/14/2008 55,361 $199,000 $285,000 $425,000

Hope the formatting works. Since we're about to buy soon, I've been looking at this web site that tracks home prices in my area. It's going up, but the February prices are 94.7% of Feb 07, and the March prices are 93.3% of March 08, so the increase is only due to seasonality.

[Cringer]

boomshakalaka!

hxxp://www.qctimes.com/articles/2008/03/19/news/iowa/doc47e03e9ea03bd427238845.txt?sPos=3

What started as a small, online grassroots effort now appears to have the potential for something bigger.

Dan Little, the owner/operator of a livestock hauling company in Carrollton, Mo., estimated Tuesday that at least 1,000 other truckers from across the United States have committed so far to joining him in a strike on April 1.

Although none of the truckers interviewed Tuesday at the Iowa 80 Truck Stop, Walcott, which is just off Interstate 80 west of Davenport, has heard of the intended strike, some said they would shut down, too.

Weldon Kinnison, a Virginia trucker who was hauling soft drink from Indiana to Denver, heard about the plans for a strike for the first time Tuesday while stopping at Walcott.

“I’m an owner/operator with the American Truckers Association,” he said. “I’d park my truck for a week with the cattle haulers.

“The fuel is too high, and there’s no reason for it. I don’t listen to the CB (radio) that much, but I guess I’ll start now.”

At issue is the rising cost of diesel fuel, which has reached or exceeded $4 per gallon in at least 17 states. But Little does not expect his strike to bring down the per-gallon price of gas, nor does he expect to have any effect on the oil companies.

“What I would personally like to see is our federal and state governments, until our economy recovers, suspend federal and state fuel taxes,” the 49-year-old said. “The second thing I’d like to see is an oversight committee for truck insurance, which is part of what’s taking us down.

“The average owner/operator is paying $600 to $800 a month for truck insurance. It’s based on personal credit, which means the monthly cost is going up for a lot of truckers because their credit is going down.

“Everything in the world is going up (in price), except for what we do. I lose money if I start my truck, and that truck is paid for — free and clear.”

Mike Hills, a driver from Wyoming, Iowa, said he also would shut down to support Little and the others — if he could.

“I can’t strike with them because I’m company,” he said while at the Walcott truck stop. “If I owned the truck, I’d strike with them. As far as I’m concerned, the gas prices are driving the economy.

“It might be a good thing if the drivers strike. They can’t make payments. Maybe if the oil companies bought all the trucks, things would change. Everything in this country is trucked.”

Hills then removed his wristwatch, using it to explain his point of view: “Every piece of this watch was trucked from somewhere. If you can’t keep up with the trucks, we’re all screwed — not just this country, but the world.”

Keith Deblieck, the owner of a trucking company out of Geneseo, Ill., said that, for many drivers, the time for a strike has come.

“They ought to strike,” he said. “We all ought to. They lose money every day they go out.”

But officials from the Owner-Operator Independent Drivers Association are encouraging truckers to find options to a strike. The trade group represents the interests of more than 160,000 small business trucking companies and drivers.

“If we told our operators to shut down, we’d be slapped with a lawsuit because of anti-trust,” said association spokeswoman Norita Taylor, adding that a poor economic outlook and rising fuel prices are creating “a lot of emotions” among truckers.

“It’s hurting these people who are living paycheck to paycheck,” she said. “People are upset. What can we do?”

One thing the association is trying to do is talk to lawmakers and truckers about making sure that surcharges being charged to shippers are getting back to the people who paid for the gas. Surcharges are supposed to compensate for high fuel charges, but they must be negotiated with each shipper, and the truckers who pay at the pump aren’t always first in line to receive the surcharges.

Even when the surcharges do make it back to the driver, they are not enough.

“I turn down loads every day,” Little said. “The loads aren’t the problem — never have been.

“It’s the only thing I know how to do, driving a truck. But I sold my trailer the other day, and I’m not buying another one until something gets done.

“In no way, shape or form do truckers want to hurt this country. My whole deal on this thing is that I’m shutting down on April 1. Call it a strike, a shutdown or just flat-ass going broke.”

Jim Johnston, president of Owner-Operator Independent Drivers Association, warned that a strike “is not the answer,” saying, “Calling for a strike without the support of the majority would show weakness rather than strength, and the result would be increased economic hardship to the small percentage of truckers who do participate in the shutdown with no gains to justify their sacrifice.”

Little said he has no other choice.

“Our federal government is subsidizing railroads, airlines, banks and farmers,” he said. “Meanwhile, we’re being taxed to death.”

Ok, so not a huge thing really, I just wanted to say boomshakalaka. Why not a huge thing? I don't see a 'trucker strike' doing much, IF it gets off the ground. Let me say that I have heard truck off a trucker strike at least once a year for the last 9 years. Nothing ever happened. Why? Because most drivers drive for a company, and unless it is a small company they are not going to back such a strike. That means most trucks will keep rolling.

I wish them luck though. The crappy part is the talk was always because of what most view as crap pay for a job that never lets you home. Now it is just to survive the fuel prices.

[Edward64]

I agree, I just don't think a trucker strike from independants will do much of anything except make traffic flow easier in big cities! That said, trucker strikes seem to have an effect in France?

Also, JP Morgan may raise the ante to $10/share for Bear Stearns.

http://www.foxbusiness.com/markets/a..._530338_2.html

According to the Times, JPMorgan Chase (JPM: 45.97, +3.50, +8.24%) executives worked over the weekend to raise their offer price after coming under enormous pressure from Bear Stearns (BSC: 5.96, +0.63, +11.81%) shareholders. If raised to a $10 a share offer price, it would increase the value of Bear to more than $1.1 billion.

[Edward64]

Mon 3/24, futures looking up.

Last week was pretty good for the markets and somewhat lent credibility to the "Contra Flasch" theorem.

Flasch, what say you this week?

[Flasch186]

Ill post it in the financials thread

[Galaxy]

http://www.msnbc.msn.com/id/23781864/

Gas prices rising quickly. Credit getting tight. A falling dollar. How long will this last?

[SFL Cat]

I think we're seeing the bottom now. I think we continue to see some volatility... some major ups and downs for the rest of the year, and things start improving late this year or early next year.

[Edward64]

Originally Posted by SFL Cat

I think we're seeing the bottom now. I think we continue to see some volatility... some major ups and downs for the rest of the year, and things start improving late this year or early next year.

Same old story. Some say yes, some say no.

http://www.msnbc.msn.com/id/23796366/

Per my assumption in above threads, the stock market is a leading indicator and if it stablizes and/or trends upwards then we may be out of the woods.

---

Flasch predicted volatility and trending higher this week and therefore the contra-flasch theorem predicts a lower market this week.

---

Interestingly, I've lost more % in my 401k than the Dow has dropped.

Dow (high of 14,198 - current 12,532) / 14,198 = 11.73% loss

My 401k has lost approx 19.1%. WTF? Must be from my overseas funds.

[Flasch186]

today is a nice start for the contra-flasch theorem. Spot on for today with very little volatility and slightly down.

[Marc Vaughan]

Originally Posted by Edward64

Interestingly, I've lost more % in my 401k than the Dow has dropped.

Dow (high of 14,198 - current 12,532) / 14,198 = 11.73% loss

My 401k has lost approx 19.1%. WTF? Must be from my overseas funds.

If its anything like my UK pension scheme than thats near 'standard' they always seem to underperform their base a little ...

I'd also say that the fact that one of the 'staples' (ie. financials) has been hard hit will have played into it more than the overseas funds section.

[Edward64]

Okay! Looks like the market is stabilizing and trending upwards in the past 3 weeks. Even with some bad earnings from Financials, the market has not been too spooked.

Assuming markets is a leading indicator, I am pretty optimistic about our economy and the length/breadth of a recession.

[Marc Vaughan]

Originally Posted by Edward64

Okay! Looks like the market is stabilizing and trending upwards in the past 3 weeks. Even with some bad earnings from Financials, the market has not been too spooked.

Assuming markets is a leading indicator, I am pretty optimistic about our economy and the length/breadth of a recession.

Don't presume this on the strength of the market - the market is happily misleading itself about the state of things because of the weak dollar presently imho.

If you factor out the influence of the dollar on the recent profits then you'll find that companies are performing a lot worse than expected in general (so obviously at present invest in companies which do heavy trade abroad - especially in Europe itself).

That being said my 'weather vane' for the American economy is my father in law who works in retail and he thinks its picking up slightly at present .. time will tell.

[Edward64]

Okay, I know this may be an unpopular statement, but I am calling it. The market has hit bottom and it is rebounding. I've read bottom is hit approx 6 months into a recession and as the market is a leading indicator, I am predicting we are on the uptick.

[cartman]

Originally Posted by Edward64

Okay, I know this may be an unpopular statement, but I am calling it. The market has hit bottom and it is rebounding. I've read bottom is hit approx 6 months into a recession and as the market is a leading indicator, I am predicting we are on the uptick.

I'll go with you that the market is a leading indicator, but only when the dollar is stable. With the dollar still dropping, there is a thought out there that foreigners are buying up bargains which are driving DOW30 stocks upwards. So although the market is improving, the capitalization relative to foreign currencies is actually dropping.

[Groundhog]

I can't believe the Aussie dollar is nearly equal with the US. Doesn't seem like that long ago to me when it was less than 0.50c. Great time to buy online, and I've been doing my best to keep the US online companies in business, at least!

[Edward64]

Oh, one more thing. If at all possible, please spend your rebate checks on products instead of paying off debt!

If only the rebate checks could have been timed for Nov just before the Thanksgiving sales.

[cartman]

Originally Posted by Edward64

Oh, one more thing. If at all possible, please spend your rebate checks on American products instead of paying off debt!

Fixed that for you. No sense in increasing the trade deficit even further and sending the money offshore.

[Galaxy]

Good luck in finding those cartman.

[Galaxy]

Do, and when, do you guys see the dollar start to turn it around?

[Buccaneer]

Originally Posted by Galaxy

Good luck in finding those cartman.

We.re spending nearly all of it on domestic airlines. So there.

[Galaxy]

Originally Posted by Buccaneer

We.re spending nearly all of it on domestic airlines. So there.

So fly a Boeing-fleet carrier.

[Cringer]

Originally Posted by Edward64

Oh, one more thing. If at all possible, please spend your rebate checks on products instead of paying off debt!

If only the rebate checks could have been timed for Nov just before the Thanksgiving sales.

If someone wants to give me an extra $1200 then I will spend my rebate check on crap. Otherwise I will spend the money as normal money, and buy crap when possible. Gas makes that hard when you have to fill up the tank so much.

[Radii]

Originally Posted by Edward64

Oh, one more thing. If at all possible, please spend your rebate checks on products instead of paying off debt!

If only the rebate checks could have been timed for Nov just before the Thanksgiving sales.

If the government wants people to spend their surplus money on products instead of paying off debt they need to issue debit cards or something else that at least attempts to encourage, if not require, purchase of goods in retail outlets.

The one time your average American thinks about saving money or paying off debt instead of spend spend spend is during times of economic crisis. Handing out checks to your average American during economic crisis and then being surprised when they pay an extra bill or put it in savings is ridiculous of our government.

I've got one credit card left and then I'm 100% debt free. My surplus check is going towards that.

[fantom1979]

Originally Posted by Cringer

If someone wants to give me an extra $1200 then I will spend my rebate check on crap. Otherwise I will spend the money as normal money, and buy crap when possible. Gas makes that hard when you have to fill up the tank so much.

I just filled two 14 gallon tanks for about $50 a piece. I drive two cars that get pretty good mileage, I cannot imagine what the SUV drivers are paying right now.

[fantom1979]

Originally Posted by Radii

If the government wants people to spend their surplus money on products instead of paying off debt they need to issue debit cards or something else that at least attempts to encourage, if not require, purchase of goods in retail outlets.

The one time your average American thinks about saving money or paying off debt instead of spend spend spend is during times of economic crisis. Handing out checks to your average American during economic crisis and then being surprised when they pay an extra bill or put it in savings is ridiculous of our government.

I've got one credit card left and then I'm 100% debt free. My surplus check is going towards that.

My check is going towards bills and some into savings. I think the checks are a good idea in general, just because the less debt people have, the better the ecomomy should rebound when this is all over.

If the government thinks the checks will be spend on goodies, I dont think they did enough research.

[Marc Vaughan]

Originally Posted by Galaxy

Do, and when, do you guys see the dollar start to turn it around?

I have to admit I'm somewhat bemused when I hear commentators say that they expect the dollar to strengthen in the near term ...

I'd have thought that flooding an economy with 'free cash' via. the rebates is hardly the way to either dampen inflation or strengthen the dollar ....

Then again I can't understand why candidates believe that having a fuel tax holiday makes economic sense either (feel free to try and explain this if you know why - I'd be interested to hear why its anything but a short-term measure destinated to grab votes but further destabalise the economy in the long term).

[Marc Vaughan]

Originally Posted by fantom1979

I just filled two 14 gallon tanks for about $50 a piece. I drive two cars that get pretty good mileage, I cannot imagine what the SUV drivers are paying right now.

Its about $70 to fill up our Aspen at the moment, that being said I'm back in England at the moment and its over £5 ($10) a gallon here these days ...

http://www.telegraph.co.uk/news/1915...-a-gallon.html

.... do also realise that the UK gallon is a somewhat different size to that in America (1 US gallon = 0.83267384 UK Gallon - so real price of fuel is around $8/US Gallon over here) ...... also do bear in mind that in general cars in England are a lot more fuel efficient than in America ...

[Flasch186]

IMO the rebate checks makes the recession into a W but doesnt end it. I'll be spending mine on bills and gas BUT.....

I TRULY believe that people spend the $ more than once. They have spent it in their heads long before the check even arrives. They buy stuff in the month prior and rationalize it with the impending arrival of the check. Then when the check arrives they'll spend it again (or stats say 40% of it) and then put it in an account that either pays for bills or necessities (thus spending it again).

[Galaxy]

Originally Posted by SteveMax58

Dola,

I cant blame the lending institutions enough for this mess. Investors are also culpable...but the lendors in many cases were not even thinking about keeping most of these ridiculous loans.

Just a mess all the way around...but somebody gave these loans out...and it wasnt Greenspan. I'd agree he could have "possibly" done some things to help lessen the mess, but I dont see him as the problem in it.

What about the home buyers? I mean, they are buying homes worth more then they can afford (with no down-payments, ect.).

[Flasch186]

Originally Posted by Galaxy

What about the home buyers? I mean, they were buying homes worth more then they can afford (with no down-payments, ect.).

Loans are tough to come by right now and AFAIK 100% financing has all but disappeared.

[gstelmack]

Originally Posted by Marc Vaughan

I'd be interested to hear why its anything but a short-term measure destinated to grab votes but further destabalise the economy in the long term).

Welcome to American politics!

[Galaxy]

Originally Posted by Flasch186

Loans are tough to come by right now and AFAIK 100% financing has all but disappeared.

I know. I was pointing out that everyone has a share of the blame.

[cartman]

Here's something supporting my point that due to the low dollar, foreign purchases of US instruments is on a sharp rise:

http://www.bloomberg.com/apps/news?p...&refer=economy

[Cringer]

Originally Posted by fantom1979

I just filled two 14 gallon tanks for about $50 a piece. I drive two cars that get pretty good mileage, I cannot imagine what the SUV drivers are paying right now.

I think there are plenty of SUV drivers who really don't give a crap. They may say they do, but though don't act like they do. I drove from where I live up here to Waco yesterday, 7 hours. I will do a couple MPH over the speed limit and get some of my best gas mileage with the cruise control set at 70-72. Yet I see nothing but big SUVs flying by me doing 80+ MPH. I know they are decreasing there MPG at the speed, but they clearly feel getting to their off ramp 5 miles down the road 30 seconds earlier just to sit at a red light is better for them.

Originally Posted by Galaxy

What about the home buyers? I mean, they are buying homes worth more then they can afford (with no down-payments, ect.).

Home buyers are to blame because there are some dumb ass people out there. We (wife and I) deal in almost nothing but repos, and as I go around to the usual neighborhoods for repos down here to take pictures I look at the person in a house worth $65,000 and they have their two or threes nice cars with 20" wheels and custom paint. I take a picture of their house knowing it is about to be repo'd, then go home and see they haven't even paid their property tax for the last couple years. They are idiots spending money on the wrong crap. Hell, I have had my Chrysler 300 for a year now and have not even had extra tinit put on the windows. I see 300's at some of these houses with the custom grills, add on chrome, wheels, and new paint. That is one reason I don't have a problem making my house payment on a house worth twice as much as theirs though.

Lenders are also to blame. Some local mortgage brokers have in the recent past made up fake documents just to get people approved for loans they should not be getting.

Originally Posted by Flasch186

Loans are tough to come by right now and AFAIK 100% financing has all but disappeared.

We got 100% financing 4 years ago thankfully. You are correct is far as I am concerned about now though, as we haven't seen anyone get it for a while. The best you can do is get a grant to cover your down payment, which is not open for everyone.....

[Logan]

Originally Posted by cartman

Here's something supporting my point that due to the low dollar, foreign purchases of US instruments is on a sharp rise:

http://www.bloomberg.com/apps/news?p...&refer=economy

Is this really debatable? All of our assets (property and companies especially) are being bought up cheaply by foreign investors.

[Galaxy]

Originally Posted by Cringer

Home buyers are to blame because there are some dumb ass people out there. We (wife and I) deal in almost nothing but repos, and as I go around to the usual neighborhoods for repos down here to take pictures I look at the person in a house worth $65,000 and they have their two or threes nice cars with 20" wheels and custom paint. I take a picture of their house knowing it is about to be repo'd, then go home and see they haven't even paid their property tax for the last couple years. They are idiots spending money on the wrong crap. Hell, I have had my Chrysler 300 for a year now and have not even had extra tinit put on the windows. I see 300's at some of these houses with the custom grills, add on chrome, wheels, and new paint. That is one reason I don't have a problem making my house payment on a house worth twice as much as theirs though.

Lenders are also to blame. Some local mortgage brokers have in the recent past made up fake documents just to get people approved for loans they should not be getting.

Cars are the worst things you could buy in terms of value.

The look rich on credit phase seems to be over. Now you actually have to earn your possessions, it seems. I do agree, every one shares the blame. I'm just not too keen on the government using taxpayer dollars to support those who did.

[SteveMax58]

Originally Posted by Galaxy

What about the home buyers? I mean, they are buying homes worth more then they can afford (with no down-payments, ect.).

A little late on the response, but yeah, I know there are plenty of morons out there who bought well above tyheir means...but they are just consumers who tend to take what they can get, and I dont expect them to have the same level of accountability as a financial institution.

I expect financial institutions, who enjoy the benefits of borrowing at the fed rate, to be a little more responsible than flippant knuckleheads who make $30k/yr, and want to purchase $800k houses with <5% down.

But I do agree in one sense...those borrowers do piss me off as well.

[Groundhog]

Originally Posted by SteveMax58

A little late on the response, but yeah, I know there are plenty of morons out there who bought well above tyheir means...but they are just consumers who tend to take what they can get, and I dont expect them to have the same level of accountability as a financial institution.

I expect financial institutions, who enjoy the benefits of borrowing at the fed rate, to be a little more responsible than flippant knuckleheads who make $30k/yr, and want to purchase $800k houses with <5% down.

But I do agree in one sense...those borrowers do piss me off as well.

Yeah I agree. They are idiots for borrowing what they can't afford, but people often need saving from themselves, and that's where the other idiots who lend the money are supposed to look at how much these people earn and realise that this is a terrible idea and shoot them down.

[Edward64]

1Q 08 at .9% GDP.

Well, I guess the 5 people that voted 'No Recession' were (most probably) right. I'm okay with it, maybe this will start a small rally.

http://money.cnn.com/2008/05/29/news...ion=2008052911

"Nine-tenths of a percent is not strong on its own right, but if the second quarter does not show decline, it's very unlikely we'll have a recession in 2008," said Wachovia economist Mark Vitner.

The results surpassed the initial estimate released in late April, a 0.6% rate that matched the anemic growth in the fourth quarter.

According to Vitner, the National Bureau of Economic Research (NBER), which determines whether or not the U.S. economy entered a recession, will not vote to label the current sputtering economy "recessionary" if there is no decline in GDP. The most common definition of a recession is two consecutive quarters in which GDP is negative, although the official designation of an economic downturn is based on broader measures as determined by the NBER.

[Flasch186]

Like Buffett said, definition be damned, to main street America it "feels" like we're in a recession.

[Galaxy]

It depends on where oil prices go. If they going up, I don't know how you can avoid a recession.

[JPhillips]

Rising energy prices are one of the reasons we're not technically in a recession, not that that gives most people much comfort.

[Buccaneer]

Still better off than I was 7, 14, 21 years ago, esp. now that I paid off all high-interest debts and both vehicles are paid off as well.

[Galaxy]

Originally Posted by JPhillips

Rising energy prices are one of the reasons we're not technically in a recession, not that that gives most people much comfort.

Really?

[Flasch186]

he said technically.

[Galaxy]

Originally Posted by Flasch186

he said technically.

I actually mis-read it at first. Long day.

[Flasch186]

This summer will be brutal, IMO, when it comes to the housing market. the Government did not step in in any timely or meaningful manner, as I thought they would, and the bulk of the foreclosures will begin to hit the market in June and continue to climb through the end of the year. How this translates to the broader market, I dont know, other than it will continue to put additional downward pressure on prices. Just my opinion but the call earlier about a bottom may be wrong. Check back in an hour as I could change my mind but this is what Im seeing here and, while not the center of the world, we're kind of in between the apocalypse cities and the cities that have rebounded...kind of in the middle so maybe a decent barometer.

[Buccaneer]

You are in Florida, perhaps the worst housing market in the country (according to cnn.com, 5 of the 7 worse housing markets are in Florida). I don't think it is a good indicator for the rest of the country.

[Flasch186]

NE Florida is not the same as SW or S or C Florida. Not great but not as devastated as those.

[Buccaneer]

Originally Posted by Flasch186

NE Florida is not the same as SW or S or C Florida. Not great but not as devastated as those.

I buy that considering the five cities they listed are Miami, West Palm, Orlando, Tampa and Naples.