Rising Foreclosures are actually BULLISH for the economy - let me convince you in this thread

reply to post by GreenBicMan


No I do not agree.

People used homes as piggy banks for the last ten years. Buying up whatever they wanted. Useing home equity as a down payment on another house, or using it to remodel the home they currently reside in.

They paid contractors to remodel those homes with that equity. That created jobs. The country needed more contractors. The contractors needed more wood, more wire, more appliances, etc. The Lumber yards responded, so did the people making stainless steel appliances.

But that wasn't enough, people wanted bigger, flatter TV's, faster computers, and gimmicky cell phones. And there where 1 billion Chinese people waiting in the wings to make it for them. All paid for, by a house they didn't even own.

The Real Estate boom created booms in other sectors. Massive job growth and massive expansion. And now that those homes have lost value, and people are getting foreclosed on en-masse. All the money to by the new TV, or pay the Contractor, is gone. Which all the money going to purchase timber is gone, all the money to purchase automobiles is gone.

I agree that this is a good thing. But not for the reasons you do. You seem to think that out of the mountain of debt these people have incurred, that somehow, the American Consumer is going to come back like Lazarus and save the corporations that are hemorrhaging money right now. They won't, they can't. The American consumer is going to fade away, because suddenly, when everyone is loosing jobs, brand new sparkling crap made in China doesn't matter so much.

You would argue that as long as the FED keeps rate as low as possible, that money would be cheap enough for people already drowning in debt to get even more credit cards or loans than they already have to deal with. That kind of logic is severely flawed. Everyone has limits, especially societies driven by consumption.

Things you should consider. People have lost jobs. That means a lot of families are operating on one income. They have no savings, and if they are not maxed out on credit, they will be after Christmas. There is no equity left in the house they bought at an inflated price, and because of the FED and it's policy of Currency destruction, things are about to get more expensive.

Not a good environment for making money in a market rigged by artificially low interest rates.

But it needs to happen. Because the idea that an economy can be driven by a consumer is a failure. The only way for a system like that to continue is for debt to never have to be paid back, and for everyone to have infinite amounts of credit. Otherwise debt will catch up with you and squeeze you out of the rat race. Which it already has done to a huge portion of America.

[edit on 30-11-2009 by aravoth]

reply to post by aravoth


Take my example, these people "avg consumer" do not care about what you are saying, they are in need of toys and expensive food for guests.

Yes they will leverage every dollar until they have to cash in their life insurance, scrap metal, and their pocket lint.

Is that wrong, obviously, should we care? No, because "Hank" will get another job at another factory at some point and start the whole damn process over...

But that is ok to disagree, I like that, and would like to hear more input from other members that goes against my forward thinking, thanks for your input btw

Originally posted by GreenBicMan
reply to post by aravoth

 

Is that wrong, obviously, should we care? No, because "Hank" will get another job at another factory at some point and start the whole damn process over...

What are these factories you speak of? You mean those things they have in China? Hopefully Hank didn't max out his credit card, Plane tickets to China are spendy.

[edit on 30-11-2009 by aravoth]

This is just people washing each others backs, it may be slightly bullish short term, but long term it is stagnation, these people incurred debt that needs to be accounted for.

What we need is to actually produce things again in the USA. We can be "Bullish" all we want and spend our money in corporations that have sold our production and jobs overseas, but the truth is we are losing everyday.

The money being spent right now in your "Bullish" economy, is leaving the USA at alarming rates, to produce factories where people are working for a few dollars an hour. And corporate exec are taking historically unheard of salaries and bonuses.

Ethics is what we need again at all levels.

Originally posted by GreenBicMan
reply to post by Realtruth

 

Of course its people BSing themselves over and over

This is my point - this is the AMERICAN CONSUMER, you are correct, and now I am giving you another reason to be bullish, bc people dont pay BAC 1200 a month, they pay the 900 rent and the rest to costco/wmt/tgt/etc..

[edit on 30-11-2009 by Realtruth]

reply to post by Realtruth


Interesting..

So we dont produce anything you say?

What are the top corporations on the planet, and on what exchange do they trade?

reply to post by aravoth


There is a dusty warehouse on the corner of every traintrack that hank can drive his forklift in.. lets not get too overboard here..

Think about it the media and government have been brainwashing the public for years now,to buy that new car,or the tree huggers with their Envirormentally friendly appliances and other junk,the real estate agents saying"you'll never go wrong buying real state"the real truth is this will effect everyone you may be laughing now but that job that will never end is soon comming to an end,pretty shortsighted post,I was always brought up if you can't pay cash for it,you can't afford it,I have no debt,I own all my things outright,but you don't think this will effect me?hell yes it will some should look at the big picture the US is going broke soon the almighty dollar will be like confederate money,the day is near and it's just around the corner

reply to post by GreenBicMan


Whether the consumer cares about it or not is irrelevant. Defaults, foreclosures, and debt don't give a crap about a person's deluded world view.

[edit on 30-11-2009 by aravoth]

reply to post by Oldtimer2


thats sweet oldtimer, but do you agree or disagree with the topic?

remember, there are 10 of them to every 1 of you

reply to post by aravoth


neither does the avg american consumer..

reply to post by GreenBicMan


Right.... the average consumer with no credit, no job, and no house is still going to consume.....

Sorry to say... I can't follow that logic.

i understood you theroy fine .
now be kind enough to explane to me if ppl are spend so much money then why is it that so manny retail stores are going broke?
my god man just take a drive through town and see for your self how manny stores are empty.
so arourding to you ppl are spend even more money at these stores .
in my experence that usaly means taht the stores expand .
like i said even the mall here is bankrupt and asking for a balout .
was alomost shut down twice they dident even have the money to pay there electric bill.
the fact is ppl just dont ahve money to spend in the last year the amount of ppl in florida on foodstamps went from 280k to 560k .
now let me tell you for a fact you have to make less then 150$ a week to qulfi for even 50$ worth.
so that right there tlls you theres alest 560k ppl right here in fl making LESS then 150$ a week . so weres this extra money every one spending going anyway? the sgtores here sure arent getting any of it

[edit on 30-11-2009 by xxcalbier]

reply to post by xxcalbier


which retail stores are going broke?

circuit city?.. sure..

the weak will not survive the worst, that we can agree on

their business moves right to ............ drumroll please............................HH GREGG!!

Think about it.. where every circuit city was for the most part, now a HH GREGG is there...

Does that strike you as odd? It shouldnt, infact HH GREGG is doing great if you havent bothered to look up the last q-statement

Why?

BC we LOVE SPENDING OVER OUR MEANS = CONTINUATION of this mess/quazi bull market

It never ends.. although while all of you see this as bad, I see this as a buying opportunity, and I doubt I will be proved wrong

reply to post by aravoth


see my example

they find a way..

always will.. payday loans.. who cares.. they will find this disposable income..

again, while all of you see this as bad, you should see it as $$ in your eyes

and to the other poster, I never see empty retail places.. could you name some nationwide retail stores please?

I live in a suburban area.. so may not be the same, thanks

reply to post by xxcalbier


haha this proves my point even more..

MORE PEOPLE ON FOODSTAMPS = MORE DISPOSABLE INCOME TO SPEND

You are making my point perfectly

Hey GreenBicman,
I don't want to throw your thread off track. If you'd rather U2U me your answer, I understand. However, I can't find it now but, you wrote earlier in the thread that historically when things are bad people invest in the dollar (or something to that effect). However, isn't the world dumping the dollar, buying gold, and looking to a basket of currencies at the moment instead of the dollar?

ding ding ding

this means THINGS ARE GOOD/GETTING BETTER

This reflects 2 things my friend

1) RISK APPETITE INCREASING = EQUITIES RISING/ DOLLAR FALLING / COMMODITIES RISING

2) FLIGHT TO RISK/ OUT OF QUALITY (basically same things)

_____

Remember when the market tanked earlier this year.. guess WHAT WENT WAYYY UP..

Give you 2 guesses, but you will only need 1.. that is correct the US DOLLAR

Now that we know the world isnt going to meltdown (no matter what karl D. and friends will tell you) we are getting back into RISKIER ASSETS = EQUITIES and out of QUALITY (US DOLLAR)

That should help I hope

[edit on 30-11-2009 by GreenBicMan]

[edit on 30-11-2009 by GreenBicMan]

funny you sure dident havbe any trouble comming up witha forclosed store well hers a parcial list of all the sgtores taht made so much money from thous forclosed on ppl they went broke
Ann Taylor closing 117 stores nationwide.
Eddie Bauer to close more stores after closing 27 stores in the first quarter.
Cache, a women’s retailer is closing 20 to 23 stores this year.
Lane Bryant, Fashion Bug, Catherines closing 150 stores nationwide
Talbots, J. Jill closing stores. Talbots will close all 78 of its kids and men's stores plus another 22 underperforming stores. The 22 stores will be a mix of Talbots women's and J. Jill.
Gap Inc. closing 85 stores
Foot Locker to close 140 stores
Wickes Furniture is going out of business and closing all of its stores. The 37-year-old retailer that targets middle-income customers, filed for bankruptcy protection last month.
Levitz - the furniture retailer, announced it was going out of business and closing all 76 of its stores in December. The retailer dates back to 1910.
Zales, Piercing Pagoda plans to close 82 stores by July 31 followed by closing another 23 underperforming stores.
Disney Store owner has the right to close 98 stores.
Home Depot store closings 15 of them amid a slumping US economy and housing market. The move will affect 1,300 employees. It is the first time the world's largest home improvement store chain has ever closed a flagship store.
CompUSA (CLOSED).
Macy's - 9 stores closed
Movie Gallery – video rental company plans to close 400 of 3,500 Movie Gallery
and Hollywood Video stores in addition to the 520 locations the video rental
chain closed last fall as part of bankruptcy.
Pacific Sunwear - 153 Demo stores closing
Pep Boys - 33 stores of auto parts supplier closing
Sprint Nextel - 125 retail locations to close with 4,000 employees following 5,000 layoffs last year.
J. C. Penney, Lowe's and Office Depot are all scaling back
Ethan Allen Interiors: plans to close 12 of 300 stores to cut costs.
Wilsons the Leather Experts – closing 158 stores
Bombay Company: to close all 384 U.S.-based Bombay Company stores.
KB Toys closing 356 stores around the United States as part of its bankruptcy reorganization.
Dillard's Inc. will close another six stores this year.
still want to talk about how much money ppl are spending now that there BROKE if ppl are spending so much then Explane this list of closed sretail stores

Originally posted by GreenBicMan
reply to post by aravoth

 

always will.. payday loans.. who cares.. they will find this disposable income..

Gotta have a payday for a payday loan.

second line.

reply to post by xxcalbier


Flight to quality in an unstable market, I thought I already addressed that

Eddie Bauer and Ann Taylor do not have $hit on WMT and friends

Again, the weak will die, but DONT WORRY, people like HH GREGG will be there to mop up with th rest of the suckers credit cards

Its always this way, NOT ONLY THAT, but the internet marketplace of course is becoming predominate, and that is A BUSINESS CYCLE MORE THAN ANYTHING IMO