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alstry (36.56)

Where do you think this is going????

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July 21, 2009 – Comments (8)

Let's look at the BIG areas of our economy.

Finance....Housing....Commercial Real Estate..Autos...Technology....Health Care......Government

Just the above pretty much cover our entire economy.  If you think about it, easy credit drove all of them.....

Easy money to buy houses and commercial real estate.....same with autos.

Sales and Profits in finance, autos, housing and CRE drove trillions to government which in turn drove trillions to health care and technology.

Now that few are borrowing, finance is simply being subsidized by government.

Housing, CRE and Autos are in a severe depression with sales down 50% and more and revenue to government is evaporating.

Without government spending, Health Care and Technology revenues contract dramatically.  We are already seeing technology sales down 20% and more routinely.

So what is the driver?  We have OVER 5X the debt compared to savings while revenues and incomes are shrinking.

If the government simply prints trillions to cover health care and defense costs without revenues coming in, interest rates will skyrocket, the dollar will implode, and our nation crashes.

If the government cuts expenses.....you can figure that one out........

8 Comments – Post Your Own

#1) On July 21, 2009 at 10:50 PM, toopersent (83.25) wrote:

Perhaps we are trying to devalue the dollar to increase exports in hopes to tap into the emerging markets growth? 

Just a thought.

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#2) On July 21, 2009 at 11:03 PM, alstry (36.56) wrote:

That is a good thought, but if our dollar devalues that much, many of us will be living in huts as foreigners take over our country.

Further, if you really think about it, what can we make that they can't make themselves?

Welcome to the Alstrynomic Paradox.

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#3) On July 21, 2009 at 11:28 PM, alstry (36.56) wrote:

From the WSJ: 

An estimated $240 billion was spent on business travel in the U.S. in 2007, Mr. Freeman said; the association estimates that 2.4 million American jobs rely on business travel.

This is about 2% of GDP.....and very much affected by the weakness in the above.

As you will see.....everything is interdependent.....without credit, small sales, small sales small profits, small profits small taxes, small taxes small GDP.

Economists make things so complicated to confuse...Alstrynomics makes it clear to understand.

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#4) On July 21, 2009 at 11:40 PM, checklist34 (99.74) wrote:

fwiw, bank lending isn't down appreciably and is well above, say, 2006/2007 levels

http://research.stlouisfed.org/fred2/data/TOTLL.txt

peak total loans crossed over 7 trillion in september of last year, peaking at 7.3 trillion in october of last year, and is currently 7.1 trillion.  This is not exactly "no loans".

i mean really, if i sat around for an hour and googled up some fed stats for bank lending, I bet my pants that its not "off a cliff", but probably moderated to some extent to get to a situation where people who shouldn't be getting loans aren't and overall bank business is not exactly "off a cliff".

 

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#5) On July 22, 2009 at 1:04 AM, oshiri (< 20) wrote:

Herr Check(please) . . .

     I think the problem is with non-performing loans, not the amount of money the banks are lending.

     If the Fed (or Fanny, or Freddy, or FHA, or FDIC, or name your favorite Federal alphabet soup) is willing to back up the bank's loans, WTF, the bank calculates slight-of-hand revenue, and their sales people get commission, and their stock price increases.

     The so-called "troubled assets" have not been taken care of. The Government simply keeps extending it's full faith to lenders that continue to throw free money around (for FREE MONEY, please see the Fed's fund rates).

    And at some point this house of cards will fall . . . 

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#6) On July 22, 2009 at 1:14 AM, oshiri (< 20) wrote:

     Again, please read about "Re-Default Performance on Current and Delinquent Loan Modifications" to see where all the new, frothy loan money is being wasted . . .

http://seekingalpha.com/article/127292-mortgage-modification-programs-are-10x-more-expensive-than-you-think

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#7) On July 22, 2009 at 9:07 AM, rofgile (99.43) wrote:

Alstry, did you vote on where you think it is going?

Right now, Alstrynomics has only 7% support in the poll..

 -Rof 

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#8) On July 22, 2009 at 9:09 AM, rofgile (99.43) wrote:

Argh, damned hyperlinks

 Anyways, the poll is in the current rofgile blog, if my link again doesn't work on CAPS. 

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