The Economic Situation.......from Rico.

This applies to both sides of the pond.

'The guy who 'called' the bursting of the 'tech' bubble and later the beginning-of-the-end of the 'housing' bubble JR Talbott has some distressing predictions.
- The housing slump has just begun. Expect 4-5 more years.
- We are not half-way through it yet, and won't be until we hit 1997 levels for housing prices.
What? He argues that housing prices remained 'flat' for about 120 years, began increasing in 1981, but surged out of proportion to everything else from 1997-2006. His arithmetic is hard to refute. His book "Contagion" is like reading Nostrodamus, except JR is more specific and accurate. It's hard to argue with a blistering annual 30% rate of decline for home prices.

January car sales dropped 37% in January '09, but that hides the REAL story. Chrysler sales down 55%, GM sales down 49%, and Ford sales down 40% (yeah...Toyota <32%>/Nissan<30%>/Honda<28%> have not been unscathed either).

So that's two big things, HOUSING and CARS that are in the tank and our politicians are full of rhetoric and considering indiscriminate spending (pork)...neither of which will get the job done. There will be no end-zone dance at the rate our elected 'economic geniuses' are moving...glacially (except when it is to the Left and in the wrong direction, of course). There is a slim-to-none chance of Washingtoon pulling the fat from the fire by the fiscal and monetary methods that are being tried now.

Short of CUTTING TAXES, and CUTTING THE SIZE OF GOVERNMENT the Carter years are going to seem like loads-o-fun!'




H/T Rico