Economy Is In A Recession
The economy is a house of cards. What do you think is the cause? Can it be put back together?
Moderator - Look for the deepest recession since the Great Depression to hit the USA. If the bailout plan fails, a Little Depression could even occur.
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---NurseRobert on 9/24/08
Helpful Blog Vote (5)
On Dec. 11, Fortune Magazine (Fortune 500) published an article entitled "8 really, really scary predictions". They predicted a Dow Jones Industrial Average of 4000 and food shortages in the U.S. in 2009.
To call this a recession or even a severe depression, crisis or downturn is a very naive understatement.
---more_excellent_way on 12/22/08|
I believe that I answered this question before. However, I will restate my view. I do believe that we are in a very bad recession and if the nation is not careful we will go into a depression. I grew up during the depression. My family did not suffer as did others but I do remember just how bad it was. We are again spending more than we earn, big companies are siphoning off large amounts of money from the people who can least afford it, bad investments are being made, frauds and scams are happening every where and we are going along with the flow. If the powers that be do not take their heads out of the ground and see the destruction that is happening then everyone will suffer.
---Dorothy on 10/20/08|
God bless you Dorothy. I pray that we are not heading toward a depression. Today the stock rallied, hope it continues.
---BB on 10/13/08|
At age 86 I can remember the days of the Great Depression. My family was blessed because my father and mother had jobs and were able to provide for us. However, I do remember some people who lost everything and had to go to the soup lines and even worse. Our country has progressed so much and have so many different issues until now it would be worse if the recession became a depression. At the rate we are going, I fear that the depression is fast coming and we need to stop spending so much money or borrowing money that the country cannot pay back.
---Dorothy on 10/12/08|
I believe we are in a little depression, now. The Depression of the past, does not copmare to what is going on now finacially. The finacial vloume is much, much bigger now.
---BB on 10/9/08|
I stand corrected. I wasn't thinking government regulation. Yes, there must be a governmental oversight in commerce and banking and health industries. Yes, thank goodness the depression of the 20s and 30's gave birth to the FDIC (and others)...What would we do without them these days!
Government and private business share and buy from each other all the time. But that is co-operation not partnership.
I was thinking of "government sponsored" and "privately owned" as in Fanny Mae and Frankie Mac. (Would that they had had oversight like other companies!)Seems like these entities suffered from BOTH the corruption of GOVERNMENT and greed of PRIVATE enterprise.The worst of both worlds.
---Donna66 on 10/8/08|
Donna66: It never seems to work very well to mix government and private enterprise."
On the contrary, there are many industries I'm glad the government has a special interest - food, stocks and insurance to name three. If the government didn't regulate the food industry there would be half as many people in the United States becasue of food poisoning. "Investors" would still be buying stocks with credit which caused the "Great Depression." And today's insurance scams would be insurance scams but legal opportunities.
Besides, many of today's products came from government research. NASA Briefs is/was a publication that has/had products for sale to private investors/individuals.
---Steveng on 10/6/08|
alan of UK - I disagree with you in that it's not the bank's fault. The bank lent my father, a 75 year old man in 2006 $160,000. They saw how dilapidated his house was, we saw pictures that they have and they STILL lent him the money.
This is what has our economy in trouble today. If I went to the bank and borrowed $160,000 and the bank gave it to me just because my credit was good, and I was 75 years old, that would be ridiculous. How long does a man live these days? Not much passed 80 and my father died at 77, two years after that loan was made. Why didn't the bank do a health check on him? His entire family has a history of cancer and that's what he died from.
---donna8365 on 10/6/08|
2 Chron. 7:14
If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways, then will I hear from heaven, and will forgive their sin, and will heal their land.
---Lane on 10/5/08|
sure thing the world economy is crumbling.man is the author of his own destruction.the so called super powers are holding bombs capable of destroying the world.it takes one drunkard to just press the button and human history ends.99%of prophecy has come to pass.read luke 17.this is the time to focus more on getting ur lamps trimmed filled with the oil like those five clever virgins.t
---ellson on 10/4/08|
yes it is and yes it can be put back together with prayers
---and on 10/4/08|
Donna ... If your father was paying the interest, the principal should not have increased.
It seem he must have been paying less than the full interest
From all you say about what happened, I think he could well have gone into this with his eyes open, with the intention of bowwowing money to spend & not repay, with no regard to the effect on his family.
I don't see the bank as being to blame in such circumstances.
---alan_of_UK on 10/4/08|
ralph7477, I'm sad to tell you that my father did loan sharking. I knew he did it because he showed me a book with a list of names and the amounts he loaned people. He told me when he died that I was to go after them to pay back the loans. My response to him was, "Dad, I value my life, I'm not going after anyone for money, no thank you" and to this day I haven't found that book he showed me.
ralph, also, my father was only paying the interest amount on the loan. That's why the principle kept going up. I have his checkbook and was shocked to see that he was only paying the interest on the loan, no principle. Does this all make sense to you now?
---donna8365 on 10/3/08|
You are right. I mispoke. Freddie and Fannie
were SPONSORED by the government, though privately owned. But lenders being pressured to make these risky loans, were assured that, because of Federal backing, the loans would be safer.
It never seems to work very well to mix government and private enterprise. Using such a combo for social engineering, as in this case, is disasterous.
I don't worry. My money is mostly in stocks (I know better than to sell now) and will stay there til this all shakes out.
My FAITH, however, is in the LORD. Psa 62:7 In God [is] my salvation and my glory: the rock of my strength, [and] my refuge, [is] in God.
---Donna66 on 10/2/08|
The United States is a capitalist leader. Other countries try to reflect the United States economy. I think we have a great Financial Team in the federal reserve system. And, the newer Mr. Bananki is a recession expert.
---paul on 10/2/08|
Donna8365, are you sure that your father didn't have a reverse mortgage? That is the only way I can think of that the balance of a loan increases instead of decreases. If you have a statement then it should clearly state the interest rate.
If your father was making payments then the balance should have gone down not up. Some loans allow for negative amortization but $900 a month negative amortization seems out of the realm of possibility. The balance would increase if your father was not making payments but if he was not making payments then the bank would have foreclosed on the property. So what did your father do with the money?
---ralph7477 on 10/2/08|
ralph said: If that is the case then how did the bank expect to make a big profit?
ralph, the bank made $20,000 off of my father in 2 years. Not bad, huh?
He borrowed the money in 2006. When he died in Feb of 2008, we found his mortgage statement and he owes $180,000 now.
$20,000 in 2 years is ALOT of money, no? That's what the bank charged him to borrow the money.
Imagine if he was still alive and lived until he was 90, he would owe probably about $300,000. See my point? What was the interest rate he was being charged if the bank made $20,000 in 2 years?
---donna8365 on 10/2/08|
Donna8365, the points you are making don't make a whole lot of sense. You accuse the bank of being greedy by loaning your father the money, but then you say that they had to know that he could never pay it back in his lifetime. If that is the case then how did the bank expect to make a big profit?
If your father took the money in order to bankrupt his estate as you stated, and if there is nothing left then it sounds like he was the one who was greedy and selfish.
---ralph7477 on 10/2/08|
It's still Countrywide's fault for lending an old man money ESPECIALLY since my father's house was bought in 1969 for $39,000. I understand the market value of the house increased over the years, but my father NEVER fixed one thing. It needs everything from windows to new toilets, new bathrooms, a new kitchen, and has leaks all over the house.
His screen door was duck taped together and his back shed was condemned by the board of health. SO WHY DID THE BANK LEND HIM THE MONEY? We found pictures of the house that the bank took before the loan went through - they saw a dilapidated house and STILL gave him the money, that's what has me in such a tizzy.
---donna8365 on 10/2/08|
Donna8365, your father could not be turned down for the loan based on his age if he otherwise qualified. It would be considered discriminatory on the same level as race or gender. That's why all the banks say they are an Equal Opportunity Lender.
The problems started when the Clinton regime decided that everybody had the right to own a home even if they couldn't pay for it. Banks were threatened with investigations if they rejected too many loans in targeted areas. In exchange for approving the questionable loans, the government assured the banks that Freddie and Fannie would buy the loans from them.
Barney Frank and the Liberal's loved their social engineering so much that they ignored all warnings of impending disaster.
---ralph7477 on 10/2/08|
Yes, the bible told us that in the last days we will see all kind of thing happening in the world ,and the sign are all point in the air
---clove6736 on 10/1/08|
Donna66: "But Freddie and Fannie were government programs,..."
Freddie and Fannie were NOT government programs, but are public corporations - having it's own stock holders that were authorized to make loans and loan guarantees - and were only sponsored by the government. How could a governemnt program be taken over by the government if it WAS the government?
BUT, don't worry about what is happening in the world for it is fortold that these things must happen - and the worst is yet to come. So put on the whole armour of God and pray continually that you will be worthy that God will protect you during the tribulation.
---Steveng on 10/1/08|
Donna8365 and others-- The reason we are in this mess goes clear back to the Clinton years,(not that he personally is responsible). "Community Organizers" and a liberal Congress, with the best of intentions, backed Fannie Mae and Freddie Mac which were partially government supported loans designed to make home ownership possible for those who might not otherwise be able to afford it.
The banks made almost no money from these loans, so certain congressmen threatened to sue them for "red-lining" if the didn't accept enough high risk loans.("red-lining" is refusing to make loans in certain poor neighborhoods and it could be construed as racially motivated by some.)
---Donna66 on 10/1/08|
PART 2 Donna8365 and others
To avoid the accusation of discrimination, banks took on many of these loans...too many. When the borrowers defaulted, neither the banks nor the government had sufficient funds to cover them. That why the "bailout".
Many middle-class people who sacrificed and worked hard to MAKE the PAYMENTS on THEIR homes are now furious at having to pay for home buyers who didn't.
But the debt must be paid. Legislators are trying to find ways to ease the pain somewhat for the taxpayer (and as usual some are tring to add other pet projects onto the bill) That's what's causing the delay.
---Donna66 on 10/1/08|
frances008-David Wilkerson wrote a book in the 1980's about America's Financial collapse. And I've read where foreign countries were going to invest in American banks and then pull their money out so they can bankrupt us-well it's working.
When I opened my 401K, I never put it in stocks even though I had that option. I put it in a fixed rate interest account. And now when stocks are failing, my account is growing. NEVER store up your treasures upon this earth, but rather use wisdom and don't be greedy. I don't care if I lost money in stocks in the good times. As long as I'm not losing money now. And Yes, my father got caught up in a big lie and he believed it.
---donna8365 on 10/1/08|
...before the comming of the anti christ,and the rapture,the worlds ecconomy is going to colaps and there will be no way of rescue
The worlds and US ecomony had challenges before...
many thought great depression was "the end" too
fear is greatest evil Christians MUST overcome ...behaving like "chicken little" believing sky is falling spreading doom and gloom like Christians have done for HUNDREDS OF YEARS due to not WAITING for God to REVEAL prophecy ...only spreading FEAR not prophecy
...all things will come to pass prophecy is 1/3 of Bible ...less than half is fulfilled
there are MANY prophecies to be fulfilled BEFORE beast returns NOT just economic woes
---Rhonda on 10/1/08|
Yes, and the bible tells about this happening.
---Betty on 10/1/08|
Donna, I am so sorry you got caught up in the evil conspiracy, because that is what it is. No apologies for using the word. People want us to believe that there is no conspiracy, but when they get caught inside a financial trap laid out for them so carefully, then they will realize the truth. This is a wake up call for everyone. People are suggesting that the conspirers will withdraw (or already have withdrawn) money from the USA, and bought houses abroad, because they do not want to face the wrath of Americans when the country goes down.
---frances008 on 9/30/08|
People getting gready and not caring about their fellow man and women. If people stop
caring about how much money and possesions
and not caring about what their neighbor has.
---madea8894 on 9/30/08|
Donna:-The answer to your qestion lies in another question.Why did God not only say but Did build His Church on Rock a solid Foundation.Americans did say "Let the good times Roll."This is not meant to say I told you so but Gods way of saying lay up for yourselves Treasures in Heaven.B/C one does not tkow the time Place and the hour.
---MIC on 9/30/08|
Well all i can tell you is that before the comming of the anti christ,and the rapture,the worlds ecconomy is going to colaps and there will be no way of rescue, by then the believers had left the earth.Then the anti christ will arise to save the world from the crises.The ecconomy might be managed but more disaster is yet to some that will crush it.This are end times prophecies that are beeing fulfilled.I urge belivers to be watchfull and prayerfull
---Samuel on 9/30/08|
The world changed too quickly, without time to adapt. Half the U.S. population is unemployed or underemployed. Jobs they trained for are "offshored" or eliminated. We have no manufacturing now, the foundation of an economy. The countries that inherited our jobs are building economies and will recover sooner than we. They have the foundation now. Maybe it's too late for our government to save our economy. If so, we the people of the united states will hope that the next world power acts more wisely than our government has. This "bailout" or "rescue" is a bandaid that will fail because it only addresses symptoms, not the underlying diseases that have devoured and destroyed the health of our economy.
---Dale on 9/30/08|
i think congress must act on bailout and also need to get bailout package and keep in mind,republicans voted against bailout and bush is disappointed outcome vote
---Elizabeth on 9/30/08|
Donna66-My father was in his right mind when he signed for the loan and you're right, he wanted to bankrupt his estate before he died. He was bitter for many years that he had to give my mother settlement money when they got divorced.
What is my complaint? It has NOTHING to do with getting money. I make an excellent salary, have savings of my own and a large 401K account. I don't need my father's money. And I'm giving most of my inheritance to 3 separate ministries.
My complaint is this is why America is in the state it's in RIGHT NOW Donna. They lent a 75 year old man $160,000, now it's up to $180,000.
TAKING ADVANTAGE OF STUPID PEOPLE IS WHY WE ARE IN THIS MESS WE ARE IN NOW in the United States.
---donna8365 on 9/30/08|
Yes. The world economy depends on a cheap abundant supply of oil. There will be severe shortages in the coming decades, and gas will soon be $9 or $10 a gallon or even more, if it is available at all. The DOE estimates that there are only 35-50 years left until the supply is completely gone. World oil is currently at or past peak supply, which means it is at least 50% depleted. The stock markert will go into severe recession when the energy shortages worsen. I suppose it was all prophesied for the end times though. I mean, the end all battles will be for oil in all likelihood.
---obewan on 9/30/08|
We have to keep trusting in God the author and finisher of our faith. It is not easy living in a world where daily necessities are getting more and more expensive. God is the only one who can bring us through all difficulties no matter how big they seem to us. God is the only answer by each inidivual tithing into the Church that one attends. Offerings can be made anywhere depending on how God leads each idividual. A christian has to be discerning of the Spirit of God at all times and be guided by God alone.
---Aug_Ceu on 9/30/08|
I am happy to have this opprtunity.Yes,the worlds economy is collapsing especially in Africa.I think it is because people have turned away from God and seek for money,and the littlew they get they don't honor God with their substance as per the word of God from Malachi 3:7-11
God bless you.
---Mildred on 9/30/08|
So, people's dreams will be destroyed. If your dreams are not what God has given you, and you go along with greedy people, buying what you can't afford . . . looks to me like it's not just the ones at the top who have helped this to happen. And why so much attention to the economy, now? I notice most of our new blogs in a *Christian* forum are about money, versus seeking first the kingdom of God and our attention to the things of God. What money does can *decoy* our attention and us away from God. The problem isn't what the money is doing. If you are controlled by money, you can be controlled by whoever controls the money.
---Bill_bila5659 on 9/30/08|
I'm not being critical when I ask this...but I can't help wonder if your dad was naive about business or was his judgment impaired? Did he involuntarily sign the note? Or did he not understand?
He must have known that most of the loan would have to be paid out of his estate. Of course, he may not have anticipated that the the value of real estate market would drop like a rock. But if there is enough money in his estate to cover the balance of the loan...what is your complaint? (Surely not that YOU aren't getting the money?)
Unless there is evidence to the contrary, I'd assume your father knew what he was doing.There is responsibility on both sides of a contract.
---Donna66 on 9/29/08|
TIMOTHY, Timbo, Timborino, Timmeister, right on bro! I couldn't have said it much better than that.
---average_guy on 9/29/08|
Kim2U: Have you checked the Nikkei Index lately? The Far East will not be buying much of anything for a while.
---TIMOTHY on 9/29/08|
The cause is man's greed. Making deals they knew that people wouldn't be able to pay back the loans just to get MORE money.
My father borrowed $160,000 in 2006. He was 75 years old. WHY did the mortgage company loan him this money? and better yet, how can a 75 year old man pay back $160,000 in his lifetime? He can't and he died and now I'm stuck trying to sell the house in it's dilapadated condition but guess what folks?
The loan is now for $180,000. The bank charged my father a variable rate and my father took it. They made $20,000 in 2 years. We are taking a loss and paying the $20,000 out of our Estate money. How sad these people took advantage of my father and sadder yet, the people went for these kinds of loans.
---donna8365 on 9/29/08|
Amen Brother Timothy! Preach it brother!
---Martin on 9/29/08|
America is a great country, but what has happened?? Only one word comes to mind.... GREED. The bailout plan that our President has proposed is only a temporary fix. We need to keep our eyes fixed on one, and that is the Lord, Jesus Christ. Matthew, chapter 24 comes to mind, and as our Lord Jesus said When you see all these things occur, this is just the beginning of things to come. Things will continue to get worse, but God is in control. Praise the Lord!
---Cynthia on 9/27/08|
No, deregulation was NOT the cause. The cause was Freddie Mac and Fannie Mae!
Deregulation works ONLY with private enterprise, because private companies reap the rewards of their own business practices, for good or for ill.
But Freddie and Fannie were government programs, which always require oversight....and Freddie and Fannie apparently had none.
Congressmen, ostensibly concerned for the poor, pushed lenders to make these loans and lenders were happy to comply because the government backed these loans. If the loans went bad there were no consequences that affected THEM. Then, in the frenzy of a housing boom, they went hog-wild, recklessly writing an excess of government backed loans. Now it is the taxpayer who must pay.
---Donna66 on 9/27/08|
America is not in its infancy as a civilization. It is merely an adjunct of a European civilization that was already old in 1776 and is now about to die. America will die with it, to be replaced by the Far East as the dominant civilization. Just look around you.
---Kim2u on 9/26/08|
America is less than 250 years old and is still in its infancy regarding societal maturation. However it has achieved more in 250 years than many nations have in 2500 years. I am not positive that a Democracy in its truest form is sustainable over time however I'm willing to keep trying. Like other great nations, America will have to learn the secrets to longevitiy. As Benjamin Franklin said, "this is an exercise in Democracy". No elected official or self respecting American is going to allow this great country to fail without a fight. It is up to God if we are to make it, my fervent prayer is that we do and that we change. God Bless America!
---TIMOTHY on 9/26/08|
Even experts admit that the bailout might not work.
The financial markets had been de-regulated and this let the greedy mortgage brokers suck people into a financial black hole. If the bailout does any good at all, it will likely be a temporary fix. Even with a bailout in place, people who wanted to send their kids to college and provide for their future will have their dreams destroyed. People who worked all of their lives so they could enjoy "golden years" will have their dreams destroyed. People who depend on insurance companies for medication will "???????". There will be widespread emotional depression and worse. There will also be future hurricanes with little recovery.
Come, Lord Jesus, come.
---more_excellent_way on 9/25/08|
Bailout plan will give a little false hope. But it will only delay the inevitable. We as a great nation are going down. What is the cause? It is commonly called human greed!!!!! Alongside of greed is ignorance . Only one man can close the borders of this country and that man is the president of the United States. The presidency is currently occupied by just a ridiculous, self-important, self glorifying, person.
Can this nation recover? Never!!!!! But each individual person can be true to God and to himself. It is my belief that God is very disappointed with our tolerance of"anything goes". Concernimg the bailout remember " a drowning man will grab at a straw"!!!
---mima on 9/25/08|