More economic danger signs on the horizon

Real Estate Agent with Sand Dollar Realty Group, Inc. BK627826

In spite of many of the announcements from Washington and various news sources that "The recession is over," there are still some very frightening statistics that cannot be ignored.  So much of what Washington and the media do is play on the emotions of the people.  This is all the while ignoring so many of the economic facts that continue to churn out.


Certainly the stock market has rallied some in recent months and the real estate market has shown signs of improvement.  There is no doubt about these facts.  However there are many underlying economic fundamentals that show inevitable economic danger still coming down the pipe. 

While I certainly would love all the positive headlines to be the truth, I can't see ignoring so many of the other stats out there.

For instance according to a CNN article earlier this month, July was a record month for foreclosures.  According to the article new foreclosures are up 32% when comparing July 2009 to July 2008.  That is a HUGE number.  Locally foreclosures continue to happen at a rate of several hundred new cases filed per week - YES SEVERAL HUNDRED PER WEEK.

Of course these foreclosures aren't any surprise.  There have been predictions for quite a while now of all the ARM loans getting ready to adjust.  I posted this 60 Minutes segment a few months ago.  The 2nd wave of foreclosures is expected to be much larger than the last wave.  Incredible!

Then there is the announcement from the White House just 2 days ago that they underestimated the federal deficit by some $2 trillion.  What the heck?!?!? The federal deficit will run at some $9 trillion through the next decade.  And these guys want to take over our health care system.  Everybody pray that this never happens.  You can read more in this Wall Street Journal article.  And the unemployment rate is expected to hit 10% nationally according to this USA Today article.

I'm not quite sure what to think of all this, but I do believe it is time for everyone to work hard to get out of debt, save money, invest in hard inflation-resistant assets.  Instead Washington wants everyone out trading in their paid off used cars to get into new car payments with their cash for clunkers, to spend lots of money on new energy efficient appliances, and of course to pay all sorts of new taxes and fees to all levels of government so that they can redistribute with giant bailouts.  I say no thanks to all of it.  It is time for Americans to do the exact opposite - the debtor is servant to the lender AND cash is king.  All these "programs" the government has created are simply dragging out the recession and potentially could cause a double dip recession in 2010-2011. 

These are crazy times to say the least.  This blog post wasn't written to be gloom and doom but simply to point out that we have a LOOOOOONG way to go before we get out of this mess. If you are in the real estate business you need to learn and get involved in as many of the short sale, REO, and foreclosure transactions that you can.  They are going to continue to increase for years to come.


(Copyright © 2009. Sand Dollar Realty Group, Inc. All rights reserved.)  

Rob Arnold - Your full service and investor friendly Realtor ® in Orlando and Central Florida.

407-389-7318 / 1-877-389-7318 

We sell foreclosure, short sale, and bank owned REO house home throughout Central Florida, metro Orlando, and the Space Coast. We sell and list Central Florida real estate and Orlando real estate. Free list of foreclosure and short sale houses available.  Our firm also provides flat fee MLS listings, For Sale By Owner, and menu-based services in most parts of Florida including Orlando, Altamonte Springs, Apopka, Kissimmee, Sanford, Lake Mary, and Deltona.


This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
ActiveRain Community
Politics And Real Estate
Silent Majority
Blatant Politics
u s economy
9 trillion deficit
u s unemployment rate

Post a Comment
Spam prevention
Spam prevention
Show All Comments
David Holzmann
Holzmann & Associates - Mountain View, CA

Good post, Rob.  Just yesterday I saw a report that said just over 80 banks had gone under this year.  But over the next two years an additional 1000+ banks are expected to follow suit.  The "comforting" part of that was it's "only" smaller, relatively unknown banks that will be going under.  So, it will "only" hurt small businesses and individuals.  At least none of the big businesses will be hurt.

This afternoon I saw a comment pointing to an article by Star Parker from about 6 months ago...  Here's what the article said:

Six years ago I wrote a book called "Uncle Sam's Plantation." I wrote the book to tell my own story of what I saw living inside the welfare state and my own transformation out of it.

I said in that book that indeed there are two Americas. A poor America on socialism and a wealthy America on capitalism.

I talked about government programs like Temporary Assistance for Needy Families (TANF), Job Opportunities and Basic Skills Training (JOBS), Emergency Assistance to Needy Families with Children (EANF), Section 8 Housing, and Food Stamps.

A vast sea of perhaps well intentioned government programs, all initially set into motion in the 1960's, that were going to lift the nation's poor out of poverty.

A benevolent Uncle Sam welcomed mostly poor black Americans onto the government plantation. Those who accepted the invitation switched mindsets from "How do I take care of myself?" to "What do I have to do to stay on the plantation?"

Instead of solving economic problems, government welfare socialism created monstrous moral and spiritual problems. The kind of problems that are inevitable when individuals turn responsibility for their lives over to others. The legacy of American socialism is our blighted inner cities, dysfunctional inner city schools, and broken black families.

Through God's grace, I found my way out. It was then that I understood what freedom meant and how great this country is.

I had the privilege of working on welfare reform in 1996, passed by a Republican congress and signed into law by a Democrat president. A few years after enactment, welfare roles were down fifty percent.

I thought we were on the road to moving socialism out of our poor black communities and replacing it with wealth producing American capitalism.

But, incredibly, we are going in the opposite direction.

Instead of poor America on socialism becoming more like rich American on capitalism, rich America on capitalism is becoming like poor America on socialism.

Uncle Sam has welcomed our banks onto the plantation and they have said, "Thank you, Suh."

Now, instead of thinking about what creative things need to be done to serve customers, they are thinking about what they have to tell Massah in order to get their cash.

There is some kind of irony that this is all happening under our first black president on the 200th anniversary of the birthday of Abraham Lincoln.

Worse, socialism seems to be the element of our new young president. And maybe even more troubling, our corporate executives seem happy to move onto the plantation.

In an op-ed on the opinion page of the Washington Post, Mr. Obama is clear that the goal of his trillion dollar spending plan is much more than short term economic stimulus.

"This plan is more than a prescription for short-term spending-it's a strategy for America's long-term growth and opportunity in areas such as renewable energy, health care, and education."

Perhaps more incredibly, Obama seems to think that government taking over an economy is a new idea. Or that massive growth in government can take place "with unprecedented transparency and accountability."

Yes, sir, we heard it from Jimmy Carter when he created the Department of Energy, the Synfuels Corporation, and the Department of Education.

Or how about the Economic Opportunity Act of 1964 -- The War on Poverty -- which President Johnson said "...does not merely expand old programs or improve what is already being done. It charts a new course. It strikes at the causes, not just the consequences of poverty."

Trillions of dollars later, black poverty is the same. But black families are not, with triple the incidence of single parent homes and out of wedlock births.

It's not complicated. Americans can accept Barack Obama's invitation to move onto the plantation. Or they can choose personal responsibility and freedom.

Does anyone really need to think about what the choice should be?

Aug 28, 2009 02:27 PM #1
Mike Saunders
Lanier Partners - Athens, GA

Jim - we are in a very fragile economic situation right now. Perhaps the economy is turning around, but, as you pointed out, there are some dark clouds out there that we still have to endure. We don't need any more legislation that is going to kill the goose that laid the golden egg.

Aug 29, 2009 12:18 AM #2
Terry Haugen STAGE it RIGHT! 321-956-2495
Stage it Right! - Melbourne, FL

Rob, Noriel Roubini, esteemed economist predicted two years ago we would enter a "W" (interesting connection) recession.  He says we are now on the top of the center of that letter with another big dip on the horizon.  All indicators are just that.  I find it interesting that some here prefer to politicize the situation, forgetting on whose watch the recession started and whom did nothing to try to stave it off.

Aug 29, 2009 05:58 AM #3
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

It is GWs fault I tell you, he is secretly running the country from an undisclosed location (somewhere on an oil rig in Iraq). I am always amazed at people that live in the past. Jimmy Carter did this and GW did that.

The bottom line is the current president whoever it is has the power to do whatever he pleases within the constraints of Congress and when the same party has it all then the president is virtually uncontrollable.

Obama has it all and he is trying to get things going and spending hi sway out. Time will tell if it worked or not and I think it will be sooner than later. But it is his to do or die by. Blaming it on GW or JC is wrong or ludicrous. As Obama has show with a stroke of a pen he can spend trillions and change whatever he wants. Now congress can and will reign him in as they are showing on the health care issue. But it is his and only his so put the blame or praise where it truly belongs squarely on his shoulders. I wish him all the best as an American. 

Sep 03, 2009 03:48 AM #4
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?


Rob Arnold

Metro Orlando Full Service - Investor Friendly & F
Ask me a question
Spam prevention

Additional Information