Wait a second, I thought the economy was recovering?

By
Real Estate Broker/Owner

Wait a second, I thought the economy was recovering?

Isn't that what everybody has been saying?

What about all of those "green shoots" and mustard seeds that Bernanke and Larry Kudlow have been talking about?

Didn't the new administration tells us that unemployment would only peak at 8% because of their "stimulus" plan? 

What about the recent Wall St. rally?

I thought consumer confidence was up?

Even Jim Cramer recently called a housing bottom.

But then I read today that the World Bank's revised economic forecast shows that the recession will be deeper than once thought. 

The truth is that an economic recovery is difficult when home values are plunging, stock portfolios are being halved, the real unemployment rate is 16.4%, and credit is evaporating as a result of massive default rates on credit cards and mortgages.

I guess even those closest to the situation either don't know what is going on or have a difficult time telling the truth.  Some things never change...

"While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States - that is, prosperity." - President Hoover, May 1, 1930

"The worst is over without a doubt." - James J. Davis, Secretary of Labor, June 29, 1930

"We have hit bottom and are on the upswing." - James J. Davis, Secretary of Labor, September 12, 1930

I'm not saying, I'm just saying...

 

 

Comments (6)

Li Read
Sea to Sky Premier Properties (Salt Spring) - Salt Spring Island, BC
Caring expertise...knowledge for you!

The one thing that might be a little different from the 30s scenarios (which are certainly worth viewing!) is this concept of time.    The internet appears to have erased time.   Time is always, and it's global, not country specific, and in "no time", it's also speeded up.    What took years, now takes minutes.   Might mean recoveries could be faster, too, than older models???  

Jun 22, 2009 04:14 AM
Mark MacKenzie
Phoenix, AZ

Seat to Sky:  You bring up a good point about the concept of time, things certainly move faster today than they did 70 years ago.  But I think that that pendulum swings both ways, for good or bad.  I'm not sure if it will have an impact on macro-economic events though.  I certainly could be wrong. :)

Jun 22, 2009 04:24 AM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Mark - Talk isn't always cheap, it this case it's priceless!  But it is easy to talk about a recovery, hoping somehow, that wishing will make it so.  I think some are beginning to realize that this isn't a typical recession, and there will be no quick recovery.   

Jun 22, 2009 04:36 AM
Pat Champion
John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs

All we can do is wait-it may take awhile for us to recover but hopefully we are headed in the right direction.

Jun 22, 2009 05:35 AM
Tere Rottink
CoastalVa Realty Inc - Virginia Beach, VA

Although in a recession there has never been a time like this.  A global economy to begin with, the internet, blogging, twittering etc.  I have read that since no body has done this before, no body really knows how to fix the problem.  My guess is that the people in charge are also guessing. I somehow, see the  light at the end of the tunnel. 

Jun 22, 2009 02:38 PM
Mark MacKenzie
Phoenix, AZ

Tere:  I have three suggestions because we are facing three problems, unemployment, the stock market crash, and a housing depression.

1.)  Cut taxes across the board for all Americans and businesses.  This would increase consumer spending and help let companies retain more employees.  It will save jobs.

2.)  Reduce the capital gains tax rate so as to stimulate investment in the stock market.

3.)  Repeal the Tax Reform Act of 1986 as it pertains to investment real estate passive loss and income limitations.  This will stimulate demand for real estate and stop falling home prices.

I have not heard the Obama administration mention any one of these measures.

 

Jun 22, 2009 03:26 PM