Stocks Slump; Car Makers, Housing Hit

[DuncanK]

Demand seems to be falling badly just as it seemed that business spending was starting to increase. Housing starts was the one bright spot and that looks bad too now.



What should we do? Some economists are saying the Fed should lower interest rates. The FF rate is already 1.25%. Do we want to take the it down to zero like it is in Japan? They have been in a recession for about 10 years now and zero interest rate isn't helping. If our rates go down to zero will we be in as bad of trouble as Japan?

[Dis]

I've been telling you. Depression time

but seriously. The thing people forgot about the stock market. Is you can't believe the PR hype. A company is worth only as much as their profits. And many of these company's aren't making profits. And many of them lie about how much they are making.

In any case I recommend not investing in stocks and paying off your debts. And I predict real estate values will drop off quite a bit. that is your chance to buy in when it is cheap.

[SlowwHand]

Lower the interest rates? That will help the unaffected only.
If you don't have unemployment, what does a lower rate gain?

The 2 biggest areas of concern in this country, that are legitimate.

What is now being called "Homeland Security", and Employment.

[Lincoln]

Good advice Dissident. If this war begins and ends soon though things might look up for a while.

[Dis]

yes good oil prices will help out the economy quite a bit.

but until this is over expect rough times for the economy. energy prices and gasoline prices will be too high.

[DuncanK]

Originally posted by Dissident
I've been telling you. Depression time

but seriously. The thing people forgot about the stock market. Is you can't believe the PR hype. A company is worth only as much as their profits. And many of these company's aren't making profits. And many of them lie about how much they are making.

In any case I recommend not investing in stocks and paying off your debts. And I predict real estate values will drop off quite a bit. that is your chance to buy in when it is cheap.

I think a lot of people think like you Dissident. People see a bit of a bubble in real estate. After all people have been selling their stocks and buying real estate. Housing starts have been good, but now they are falling off. There's bonds, but what if that market goes bad. Then where will people put their money. Maybe if they pay off enough debt they will start to spend more, but that takes a long time. Meanwhile there could be big problems in the future.

[Lawrence of Arabia]

dont touch the rates
deficit spending is driving up interest rates
which means less investment
threat of war is making the consumer jittery
companies know this, and wont invest into things which wont sell

[Lawrence of Arabia]

and btw in that quote, I hate to say this but Mr. Marx doesn't seem to know how the banks get their money, because hardly any of it is deposited by the evil capitalists

[DuncanK]

Originally posted by Lawrence of Arabia
deficit spending is driving up interest rates

Bond rates are going down though. And the tax cuts are going to the rich. My feeling is that they are going to turn around and buy bonds. I don't think these deficits will increase interest rates much.

[DuncanK]

Originally posted by Lawrence of Arabia
and btw in that quote, I hate to say this but Mr. Marx doesn't seem to know how the banks get their money, because hardly any of it is deposited by the evil capitalists

Where there is a lender there is a borrower. One of them is usually an evil capitalist.

[Lawrence of Arabia]

no you see, by spending more then thheir budget, the us govnermnet needs to borrow money from the banks. which means that there is less money in there, and sincve interest rates are the price of monney, when money becomes more scare, its price increases

[Lawrence of Arabia]

Dunkan - but the majority of the money that the lendor lends does not come off the backs of the working class. In the US, banks need to have 10% of their lendings backed up by cash. that means that out of 100 dollars that you borrow, only 10 of it came from the workers

this money is hardly dripping of blood.

[DuncanK]

Originally posted by Lawrence of Arabia
no you see, by spending more then thheir budget, the us govnermnet needs to borrow money from the banks. which means that there is less money in there, and sincve interest rates are the price of monney, when money becomes more scare, its price increases

The banks will sell the bonds to those who got the tax cuts.

[Lawrence of Arabia]

and those bonds will in no way cover the deficit, because even if every dollar of the tax cut was invested into bonds, the US would still run a deficit for the next 3 years at least.

[Ted Striker]

I've said it before and I'll say it again.

The day Saddam is DEAD, the entire world will begin to turn around.