5 Responses to “US Depression Coming?”

1. Daltonsbriefs on October 5th, 2008 6:44 am

   Chris, I think we’ve turned the corner. The credit markets will stay tight thru the first of the year, because the government regulators are poring over two years of data to find people to blame. No one wants to take a chance with regulators looking for blood.

   The unemployment figures are all really the net affect of last year’s problems, the same goes for foreclosures and other consumer credit problems.

   In Indiana, we’re better off than most states, with foreclosure problems starting in 2006 and already peaking in Indy late 2007. There are actually some signs of an upturn in real estate property values. It is a little harder to get a mortgage, so a solid investment for the next three or four years would be market rate rental real estate. If you can afford to put down 25% on a rental property, one that will cash flow on day one, than I highly suggest buying rental real estate right now.

   Daltonsbriefss last blog post..Veteran Assaulted Protecting McCain/Palin Sign

2. Daltonsbriefs on October 5th, 2008 6:46 am

   One last thought:

   When everyone is screaming and running for the hills, where are Warren Buffett and JP Morgan and other mega billionaires? They are at work finding values in places that people have over-reacted.

   Look for underevalued investments in real estate, stocks, bonds. Putting cash on the sidelines for the next year will really mean moving backwards.

   Daltonsbriefss last blog post..Indiana: Referendum #1

3. Christopher C. Hedges on October 6th, 2008 9:33 pm

   Hi Steve,

   I’m still in the market — I told my FA that I am not risk averse and that I also see this time as a buying opportunity.

   Could it be just like 1987 — another 30 years or so of upward momentum after this cyclical correction and weeding out of some of the craziness that caught people’s fancy during the last decade or so?

4. Sloan on October 7th, 2008 11:25 am

   Chris - Anyone with a microphone in their face and the ability to speak seems to get their message out. The Asian economist didn’t help, he just scarred the viewer within the first few minutes of his Monday morning quarterback jaunt.

   Let’s look at the bright side here in Indiana…

   Daniels was elected in 2004. Job creation his #1 priority, he reorganized the state’s commerce department into the public-private Indiana Economic Development Corporation (IEDC), became chairman of its board, and ordered it to act at the speed of business, not the speed of government, to attract new jobs. Since 2005 more than 485 businesses have committed to create 60,029 jobs and invest $14.5 Billion in Indiana due to Daniels’ administration efforts. Over 100,000 more Hoosiers are employed than when Governor Daniels took office, resulting in a lower unemployment rate.

   2005, Daniels led the state to its first balanced budget in eight years and, without a tax increase, turned the $600 million deficit he inherited into a $300 million surplus in a single year. That’s a $900 million swing!!! Tell me one governor who did that in one year, let alone in that year? Governor Daniels used this surplus to REPAY hundreds of millions of dollars the state had borrowed from Indiana’s public schools and local governments in PREVIOUS administrations.

   In 2006, Daniels helped attract three high profile automotive investments - Toyota, Honda, and Cummins. The governor’s focus on renewing Indiana’s agricultural sector and strengthening the state’s rural communities moved Indiana to the forefront in the biofuel and clean energy areas, with 15 biofuels plants currently operating or under construction across the state, including the world’s largest soybean biodiesel plant. As a result of the largest public-private partnership transportation project in national history, Indiana is the only state with a 10-year funded highway construction program.

   While it was hard for me to get totally on board with his 2007 health care plan “Healthy Indiana Plan”, mainly because I senses that government was starting to fund health coverage for more than 130,000 low-income uninsured Hoosiers. This wasn’t total the case as he did manage to help 170,000 citizens with free or discounted prescriptions, and here is the key people…WITHOUT RAISING TAXES.

   Obama, I have heard a big fat NOTHING as to how your going to fund all of your so called wonderful save the middle class programs…I do see our taxes going through the roof like they are now (not because of George Bush people, but the bad economic policies and red tape regulation that Clinton placed on the American people that have finally caught up with us. Gang the past administrations “let government solve your problems” has begun to knock on our doors…and hard.

   Reagan was placed in a very similar role prior to his second term. Unemployment was at an all time high, inflation was skyrocketing and his first set of tax cuts (mind you they were cuts, not increases) still were not enough to get America working. Decades of fat governements were eating our economy alive. What Regan has and McCain is they are willing to lead and not bend to the will of a party or lobbyist. Stay the course was the theme for Reagan in the mid 80’s and things did turn around as less government ultimately worked. Reagan got his tax cuts, a 25 percent across the board reduction. He got some cuts in spending. They were controversial.

   And Reagan got big defense increases. One by-product, huge budget deficits, under Ronald Reagan, the national debt nearly tripled, not because of national defense spending, though high for those times, but because we were beginning to see the increase of foreign oil dependency. We were all tapped out in the 70’s.

   Keep in mind, when Reagan got his tax cuts, things actually got worse. By October 1982, unemployment topped 10 percent. A whole swathe of the country came to be known as the rust belt. Reagan’s job approvals sank to 41 percent. It was a tough time in the early ’80s because all of the things that he said were going to happen, the things were going to get better, were not getting better. Reagan was resolute. Slowly the economy recovered. Then it boomed. The stock market would more than double. Huge regulatory government is a prescription for failure. When you keep on spending and do nothing to save, you get foreign economist talking US recession…worst yet depression. Will Obama show the resolve to stick to a plan…oh that’s right, you have to have a plan to stick to it.

5. Christopher C. Hedges on October 10th, 2008 7:20 pm

   Hi Sloan,

   I think we’re at the turning point — we’ve probably hit the bottom and the wiser among us will start seeing the buying opportunities.

   It’s too bad I don’t have any extra cash lying around …

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