patrick.net

I'd like to respond to mjfhorsey@comcast.net.

I agree with you in terms of people modifying their behaviour. They will have no choice. They won't like it as they watch the American dream slip away. The American Dream to the consumer society is markedly different than the American Dream that the war generation sought. They were prepared to forgo immediate gratification for a stable climb in standard of living. Not so, especially since the recession of early 90's. Yes we will have to return to the world of delayed gratification......those that lived pre 1990 (i.e.: war, boom and bust generation) will understand. Those that lived post 1990 (The echo generation) will not and for all it will be difficult.

My challenge to all is to ask you will the behavioural changes make the difference. If the problem is in the behaviour alone then yes it will. I mean to say if the basis of the economy is stable and all things being equal and do not change except behaviour then I could buy into the thesis. However, we are talking about fundamental shifts in the basis of the economy that behavioural changes won't fix. It will help but when the ground shifts, changing your gait won't help much.

As I've stated in other posts, the monumental shifts in the economy will change the way we all live significantly. Behavioural changes will occur no doubt but I believe that the aggregate of these changes will not be able to overcome the problems in the economy. The late adopters will be the victims 70% generally. The early adopters (15%) will survive. Be an early adopter. Cut debt, refuse consumerism and save, save, save,..........

With respect to all

HeadSet says

thunderlips11 says

I went to see a house that was listed at $400k. Nice, custom built place, lots of land. As I was leaving, the Agent told me the seller would consider leasing or even down to $300k.

I see that situation in my area as well. where asking prices greatly exceed selling prices. I wonder why the realtors engage in that practice. It seems that if the houses were advertised at $300k instead of $400k, buyers would be more plentiful. I suppose the realtors are advertising high prices to convince anyone who is looking at listings to believe prices are higher than they really are.

The house would have more interested parties if the pricing was closer to what the seller would accept. Not only that, the seller would probably get more money for a properly-priced home.

A few years ago, my husband and I were looking for a home with a 3-car garage. We were willing to pay $300k so we limited our search to homes priced under $350k. A Realtor told me he'd just sold a home which met our criteria for $300k. How could that be? I had been diligently checking the MLS. He never asked the sellers to lower their price from $400k so it never came up in any of my searches. The sellers took an offer 25% under asking price. There may have been multiple offers if the price had been set at $325k because the place blew away the comps.

homeowner_for ever_san jose says

Interest rate will be raised when housing will start to recover. and it will be done in a way which makes sure that housing does not go lower due to inerest rate hike.

3steve says

I’d like to respond to mjfhorsey@comcast.net.
I agree with you in terms of people modifying their behaviour. They will have no choice. They won’t like it as they watch the American dream slip away. The American Dream to the consumer society is markedly different than the American Dream that the war generation sought. They were prepared to forgo immediate gratification for a stable climb in standard of living. Not so, especially since the recession of early 90’s. Yes we will have to return to the world of delayed gratification……those that lived pre 1990 (i.e.: war, boom and bust generation) will understand. Those that lived post 1990 (The echo generation) will not and for all it will be difficult.
My challenge to all is to ask you will the behavioural changes make the difference. If the problem is in the behaviour alone then yes it will. I mean to say if the basis of the economy is stable and all things being equal and do not change except behaviour then I could buy into the thesis. However, we are talking about fundamental shifts in the basis of the economy that behavioural changes won’t fix. It will help but when the ground shifts, changing your gait won’t help much.
As I’ve stated in other posts, the monumental shifts in the economy will change the way we all live significantly. Behavioural changes will occur no doubt but I believe that the aggregate of these changes will not be able to overcome the problems in the economy. The late adopters will be the victims 70% generally. The early adopters (15%) will survive. Be an early adopter. Cut debt, refuse consumerism and save, save, save,……….
With respect to all

It's a good question, will it be enough. I believe things are in a later stage of decline than they appear to be. America has only the primary player on the world economic stage for about 60 years. From the guilded age to the start of the depression the American economy was strong, but far from dominant. It is not preordained that America will continue to be the largest economy in the world. Many long since forgotten societies throughout history were the the Americas of their time.

We have moved into owing unprecedented levels of debt that might not be payable. Yes people are reducing their personal debt, but public debt is increasing faster. There were large amounts of debt in the late 1800's but almost all was spent building infrastructure. There was a higher level of public debt after WW II but a big part of that debt went to building the largest industrial base ever seen in the world to that date. Not to mention that the rest of the industrialized world was left in smoking ruin. America was in a unique position of advantage never seen before in history. Never to be seen again.

Contrast that to our current debt along with the staggering amounts of future unfunded obligations. These debts have done nothing to increase our infrastructure or industrial base. Previous public debt was an investment in the future. Our current debt is stealing from the future. Can a government that hasn't balanced the books in 30 years not only balance the books, but generate a surplus to repay the debt? It seems, at best, unlikely. Is an entire generation going to repudiate the only lifestyle they have ever known. I really, really hope so. But I also think it unlikely. Ever increasing interest on the debt must be repaid. Missing a debt payment would result in t bills being used for toilet paper. There will be a breaking point where interest on the debt consumes all the money in the federal budget.

It's a long hard road back to a sound fiscal base and I don't hear a single person in a position of responsibility talking about sacrifice of any kind. The only message I hear is that we are somehow going to get back to the unsustainable pre crash status quo. It's very sad and scary state of affairs. Like others here I have been responsible, paid cash, and saved. I also have multiple citizenships. If things go horribly wrong I would reluctantly renounce my citizenship. Still I am worried. My future and my children's future are being mortgaged to pay for the irresponsible, the greedy, and the reckless. I hope I am proven very wrong.