End of the Recession or .. depression in the Horizon?

The Peace of God to all that belong to the Light,
Dear Readers,

It is just time to return to the economy in this forum of predictions, one of the topics in which the people knows I have more reliable credit as a forecaster.

Recently, in January of this year, I released among my annual predictions many important facts to be accomplished in 2010 and 2011, including the economy performance, that of course will be of more recession and we will cross on this period the so dangerous point that I can define as the edge of the Abyss, if we overcome it successfully everything will return to normality in about two years but if not we can expect a terrible long period of world economical crisis.

Unfortunately we are experienced in this first semester of 2010, a progressive sequence of regional crashes on various significant markets, and that point in a very similar direction to the one I successfully forecasted by January 2008 that was going to occur in this 2010.

Now, we have seen on May not only a spectacular fall of about 1000 points in the Down jones, principal index of wall street stock market, but also how the other time supposedly strong European economies are reaching one after other critical points of recession:

- The very bad behavior of the Spanish economy that is reaching the lowest levels in all its period being part of the European Economic Community.

- The terrible riots in Greece in which it is considered the worst episode of social disorders in the continent since 1968, when the country is frankly showing illiquidity in his external debt.

- Now, the end of one British government in a desperate attempt to save its permanence in the power during all this social and economical turmoil by building a solid coalition able to lead that nation in the middle of all this adversity.

- Finally the resignation of the Japanese Prime Minister, and the incoming political crisis in Spain, are showing that this recession is every week behaving erratically, in a way that there is no agreement in between the federal reserve and the government of what to expect.

There is the hope that everything improve in this semester, and the Obama Administration certainly have taken a lot of very interesting measures to shield the stock, commodities and financial market in general to prevent other crash than the one suffered in the last year of the Bush Administration.

Of course those extraordinary packages of new game rules for Wall Street can remedy a lot of potential issues that can ride to another dramatic fall on it, but my impression is that the danger is still present and the stroke that will release the new crisis could come from the least expected economical sector.

My perception is that the recession will drive the prices of the real Estate to a very dramatic fall, it is going to be in such a way that we could feel a deflation phenomenon occurring in that market in six months or so, causing chaos in the financial sector, as a domino effect.

Why in the financial sector, in concrete in the principal banks that finance the mortgages of many home debtors, because if the commercial value of the real Estate is drastically devalued, obeying the laws of the offer and demand in the current market, this may sent directly to bankruptcy many corporations that have financed long term loans of that sector, since the debtors would prefer to lose their houses before to pay them inflated at the old cost.

At the end the banks can retain the houses in guaranty of the respective unpaid loans but if they commercially would represent let’s say only 60% of what originally was paid for them, who is going to assume such a loss?

This is a huge weak point of our economy and something that requires an urgent attention of the banks, the federal reserve, the congress and the authorities incharged to regulate the Real Estate market , otherwise this could even transform this recession in a depression.

Thanks for your attention,

The Angel of Lightness



Remember that my threads are an actual window through the veil of time for the ones have thirst of knowledge and wisdom, so feel free to do comments and ask questions.

On second thoughts, I won't bother with the original comment.
"Peace", as they say.


[edit on 25-7-2010 by DISRAELI]

reply to post by The angel of light


Nah the economy is slowly on the mend, this day and age we will never see a recession of the same magnitude as the 1920's

Interest rates are incredibly low, now is the time to buy a house, buy a rental property, or refinance your mortagage. Those who are responsible investors are buying rental houses because it is more tangible than the stock market, and these houses ARE going to appreciate in value. You also get a tax break on your income for having rental properties. It is a safer investment for long term than the stock market. Think about it, someone else pays off a house for you, think retirement income. The extra money from the rent can be saved up for house repairs, could be your vacation or furniture fund, or braces for junior payments.

reply to post by frugal


Hi Frugal,

Seems to be sensate your advise, however, there is the impression among the house seekers that the real estate is overvalued at present, that the prices remain still to high in comparision with the new reality of the economy, almost in the same values that they had before the recession.

There are many people trying to sell houses and having the same problem: every body wants to buy but at lower cost, something that is in certain way logical, if there is no great circulation of money in the market there is no way to continue paying such prices.

This problem soon or later can create a huge issue in the Real Estate market, even now the trend of the prices is to fall, of course it is a relatively gradual one, but for how long they will remain not so much sloped?

if , under the present recession, more people lose liquidity and needs more and more cash to survive that can push the prices of Real Estate in a flight auger at some point.

If my impressions become fact we could be affronting a major financial crash among the principal creditors, counting among them maybe the principal banks of the country.

The Goverment must act quickly before to arrive to such a point, possibly giving some incentives for acquisition of houses, or shielding the banks on time to afront that possibility.

it is clear that if the debtors feel that their houses value is lower in the market than the one they are paying, I mean sensibly below, many of them could decide to don't continue paying their loans.

In that case, the banks would be forced to retain the properties, but if they have a commercial value extremly below with respect to the financial one, that should represent a major loss for them.

Thanks for your attention,

The Angel of Lightness

The Peace of God to all that belong to the Light,
Dear Readers,

The Obama administration have done several interesting motions during the last weeks trying to stimulate the recovering of the Economy, so we have seen interesting decisions:

- To boost the financial aid in the Universities in order to give more opportunities to American students to improve their actual professional capacity, also to become the new technical force that a reindustrializing procees of our economy will require as the only real solution of the crisis we have at present in America.

- To decide the end of the American participation in the conflict of Iraq, something that surely will represent an important breath in for an economy that pay to much in bad consequences due to its role in that war, that becomes an exhausting weight over the shoulders of the contributors of the thousands of millions of dollars needed to sponsor it.

- To create a mandatory health insurance at low cost for all the American public that enhance the access of the great majority of the population to the benefits of medical treatments. I think this measure was very important and possitive but there is to much more needed to do in that sector, it is needed that the goverment control the private interests that have ruled the health sector for to much time, to get that in America the access to good physicians and dentists will be a right and not longer a luxury, and that the professionals of that sector realize that they are here primarly to serve the country and not to serve of the country.

- It is true that the Global economy has forced the Americans to compete with the so cheap work force of countries that don't have a well stablished social security system, and that also are producing under the conditions of seudo feudal slavery or communist one, but it is also true that with the most expensive health system of the world we don't have to much to do to be competitive against countries in which the medicine is offered for only a fraction of what it cost here.

If we are not competitive anymore due to the high cost of the life in America, we are condemned to be for ever only importers of services and products, to be eternal debtors of the same countries that are taking from our hands what it suppose must be the origin of our own wealth.

-To press enough over the companies that were responsible of the oil split on the Gulf to find an effective solution to fix that issue, something really needed since the ecological damage has affected so much the economical life of the people living of what the sea produce.

However, one very sensible point that is the one of the devaluation of the cost of the real state, due to the depressed demand in the market, look to be the most challenging of the issues and the decision of the government was to favored the interests of the house owners, the loan debtors, forcing the banks to adjust the mortgages in favor of their clients and at expense of their own interests.

This last measure is the one I feel perhaps was not thought deep enough to consider its impact on the economy. Since if the prices of the houses continue descending in the way it is now this will be the beginning of a great lose for the financial sector.

It is true that the financial sector of the country has a tremendous responsibility that nobody can deny on the present recession, due to their clear manipulation of the gas market in 2006 and 2007, when many important bankers of New York decided to accumulate millions of tons of fuel imported from Iraq just only to boost the price.

It is true that to be forced to buy gas at the horrendous price of 4 dollars the gallon was more than what a mercantile economy could sustain without derivating in collapse, but it is also true that if the financial sector of the country crashes this will compromise the stability of all the nation and not only of the bankers.


This is what I have to comment of the present economical moment and what I think is positive and negative of the government decisions.

Thanks,

The Angel of Lightness



[edit on 8/24/2010 by The angel of light]

we are in this world but not of this world, once the truth hits...then regardless of the powers principalities or dominions or their systems do will be some what irrelevant.
After being 'unplugged' for the want of an image simplicity sake, then you have a true and deeper understanding of the world as it has been and will for a time.
The deception and lies of all things will come with a clarity it will be shocking and also rediculasly obvious a collective forehead slap will be the 1st action.

Once this reality hits then....................................................>
not time yet

reply to post by Rollo


The Peace of God to all that belong to the Light,
Dear Readers,

Today America awoke with the good news that the committee of experts in Economy of one of the most important Universities has declared the recession officially ended but not now about more than a year ago, by June 2009!??

Well, certainly I was one of the few members that posted here a prediction that opened the possibility to have this great recession ended soon, so in that sense this make me feel glad to see that even being in opposite sense of many other people expecting the worst of the recession still ahead I could achieve once more a prediction accomplished.

However, I certainly was a little more realistic in my forecast during the last weeks pointing that although there is light in the other side of the Tunel that we have had walking since December of 2007, we are still in a period of erratic economy, there is no real sensible recovery in many sectors and the unemployment is certainly so high to claim that everything has returned to the normality.

Pls read :

news.yahoo.com...

I am glad to have been one of the first to foresee the end of this crisis, being perhaps the very first that predicted its arrival on the spring of 2007, when nobody thought even that this would be a so grave crisis, at that time many people replied to my threads claiming that were the most negative ever posted in matter of economy.

Now, it is still pending to be accomplished my forecasts of January of 2010 in which I claimed that Barack Obama in spite of all this turmoil, that he didnt promote since anyway he received the economy of this country in the worst conditions none other President did besides of course Franklin D. Roosevelt, finally will boost a lot his popularity during the second part of his term going really stronger than many believed to a possible reelection in 2012.

Pls Read:

news.yahoo.com...

thanks for your attention,

The Angel of Lightness

I see that your intentions are good but the light at the end of the tunnel could also be a train, a small UFO ship or even a flood of water with bioluminescent fish within the deluge.

Stories like these indicate that many issues still exist. Here, we see many people "helped" by prior programs are not able to rebound as well as we thought.

finance.yahoo.com...

Cheap imports drive some markets - our year over year comparison shows a big gain in imports from 2009 while decline in outgoing shipments - this indicates we are continuing to "buy stuff" but are hesitant to "sell stuff". The Port of Long Beach shows this number: www.polb.com...

This trade imbalance is a problem if our country is to build things and sell them overseas. Our buying power is still moderately strong but the value of the US Dollar versus gold and against other currencies is not as strong as it was months ago. This may spell inflation - even higher prices for those who are in the middle class who have to contend with 2011 tax increases on medical benefits and other taxes.

The recession won't be felt by all negatively. Some people may just choose to spend more wisely. They will stop taking expensive vacations or buying new cars - choosing to purchase used cars instead. Family consolidations are occurring when adult children move in with their parents because they lost a job or couldn't maintain a mortgage payment.

We are down 5 million jobs in the US since 2008. This means many less people to "pay for" the excesses of government. This spells new taxes in 2011 putting more pressure on those still working. The middle class is eroding from the bottom up and within. With the negative evolution of the middle-class, we will see these price drops of real estate allowing the rich and banks to "scoop them up" and re-distribute the wealth. This is a great time to be wealthy or in power. In a recession, a person with $10 million in wealth may see it drop to $6 million. It may see 10 families with income of $80 thousand all lose their jobs. The 10 families suffer greatly "en masse" while the rich person just waits for the rebound almost silently.

Many many people are suffering and a recession is when "it happens to a neighbor" and a depression is "when it happens to you". Right now, I have two neighbors who are trying to sell their house but cannot. My mother's neighbor cannot sell their house either and ended up housing their adult children in it while they wait for the market to grow.

reply to post by bonaire


yes Bonaire,

Even I could go beyond your interesting comments to point that the Obama Administration is doing the correct thing to be extremly cautious of this report of experts claiming that the Great Recession is finally overcomen, this could be more than only a difference of opinions in economy, even more than only a technicism if once it is passed the bottom of a recession it is correct to claim that it is finally ended or not?

I would suggest not only to the goverment but also to the public opinion to be very careful about this dictamen on the supposed end of the Recession, this can be even a very smart planned political strategy to create even more confusion and to fish in the middle of the chaos, I must say openly that the first impression I have had this week is that the incoming congress election can be the real factor in this so misterious veredict about the end of the crisis.

Let me explain again the point: If some special committee of supposed gurus in Economy determine that the end of the recession that was started on the Bush Administration occured in June of 2009, what is going to happen if for any reason we affront another big fall in the markets in the end of this semester? even before the election? well the effect in terms of political possiblities for the Obama administration could be devastating, since the public following this false information will immediatly blame the goverment of to have created another recession.

This is not the fist time that this manipulation of the information have been used with political intentions, there is an interesting precedent on the Franklin Delano Roosevelt administration, when the media agreed that the great depression was practically overcomen just only to try to blame laterly the govement to have extended the Depression instead to work to fix definitevely it.

Another historic example of this tactics was to claim that the Watergate recession that started on 1974, and that was the deeper one before this one, was completly fixed by the Ford Administration by 1976, this only to claim laterly that the recession on the Carter Administration was entirely its own responsibility. It is really suspicious that an administration started precisely when a recession was declared to be ended just only to return to another crisis so soon, don't you think so?


The people that have started this recession with the so irresponsible speculation in the gas market on 2007, using the petroleum of Iraq to profit enormeously, that finally boosted the credit crisis and the mortgage one,
are still present in Wall street and they want to return to their old vicious way to make businesses, but to do so they need to break the confidence of the people in a goverment that they know very well will not allow them to go a head once more.

Thanks,

The Angel of Lightness

reply to post by The angel of light


The Peace of God to all that belong to the Light,
Hi Dear Readers,

The result of the election on this week reflects how disperate is the situation of millions of Americans with respect to the job search, as well as the incapacity of many companies to not only generate them but also to survive in a really chaotic market, and also the fear about more taxes.

Of course the govement is in many aspects it is constrained to the maximum by the lack of resources, the deficit on its finances is really grave, after all the years of the Bush Administration that put in debt as no other one previously the nation.

Yes we have a vicious circle created through the errors of an insane economical neoliberalism, that reduced the state so much cutting practically all its resources, that now the only way for the public sector to go ahead is to cut jobs or to create taxes.

The only option I can see for the Obama administration to continue working in order to move the State is possibly to emit more currency, of course with the subsequent devaluation of the Dollar, something many people dont like at all, but perhaps in the long term will put America again in a competitive position in the international trade, since our services and products will be even cheaper than today for external customers.

The critical point is that the new congress instead to have the priorities that the American People demand to arrive to consensus that can push the nation ahead , specially in the economical aspects, is now practically converted into a battle field of ideologies that are perfectly unable to deal with the current situation.

check this pls:

news.yahoo.com...

The declarations of the Republican leaders are really worrying, since it is clear that after to have received a tremendous endorsement of millions of votes, they are turning his head back to the real issues, how to move the economy, and they are decided to continue in the fight of a political war started by the GW Bush administration that was precisely the one that created this terrible recession, it is in some sense stupid to think that the major concerns here is to prevent the reelection of Obama, when the real matter is to move the nation out of the crisis.

If the priority is to voicot the Obama administration this is not what everybody is expecting of this new Congress, since this is the moment not to divide more the nation, after all none country is able to overcome critical moments by being divided to itself, but to join alltogether forces to push the boat from the same side in order to exit this dark tunnel in which we entered thanks to the obsession of the corrupt and unuseful wars, also pretty expensive, that characterized the previous administration.

It is not only inconvenient for the democratic administration this sectarism of the Republicans, but also a serious menace to the stability of the country, since who ever thinks that the best policy is to don't allow the goverment to do its job, in the backend actually does not have any policy and it is only trying to profit politically of the crisis.

The point is that such a negative attitude, more destructive than constructive, the only sure result will carry on will be of course to enlarge the crisis, and to think that such a conflict is going to push back the Republicans to the White house is to bid all to the definitive bankrupty of the nation, just only to favor the political interests of its power circles, quite ironic for a party that supposedly is using patriotism frequently as its own political flag.

I am wondering to what can be comparable this new Policy, and it is sad but the best comparision is probably like a vulture waiting that the ill person finally dies to get a nice dinner of its body.

My forecast is that either the Obama administration take action in the line to devaluate the Dollar with new emitions of currency to finance its social and economy recovery projects or we are going to see the extension of this crisis for at least other two years under the present circumstances, since this new congress clearly it is here only to create more issues, or at the end who ever begins the next term in the white house will receive the remains of a nation completly anhilated in social aspects.

thanks for your attention,

The Angel of Lightness

reply to post by The angel of light


The Peace of God to all that belong to the Light,
Dear Readers,

I have the impression that we are going toward another very bad moment in the stock market, perhaps even worst than anything we have experienced since January 2008, I am really scared of that possibility but I must be honest with all of you of what I am watching ahead.

However, what it concerns me more is that it seems to me the President could be cornered by the bad circumstances in the public finances and having to take extremly painful decisions, which could affect the stability of the dollar. Of course the chief of the federal reserve and the Directives of Wall street will take active part in that negotiation, as well as representatives of the IMF of those extraordinary shock measures.

I see that Wallstreet might be closed by the goverment for about two weeks in order to prevent an complete crash of the market. The moment I am perceiving is incredible dark but the possitive side is that after the collapse the two parties will join forces to support emergency actions to save the economy, no more divisions ahead in matter of economy or public finances, this is going to remain all head during the rest of 2011 and 2012.

It would be desirable, of course, that the politicians can arrive to agreements before of this new big fall in the stock market, that our political class can be smart enough to prevent and not to be forced to act under terrible consequences, but they remain so stubborn in their respective extreme positions.

The return of the American troops from overseas is something that under the pressure of the new crisis in economy must be accelerated, even faster than any estimation of current retirement plans.

Thanks,
your friend

The Angel of Lightness

reply to post by The angel of light

The Peace of God to all that belong to the light,
Dear Readers,

Today officially the news are reporting how the Greek Premier openly has accepted and told to Former President Bill Clinton that his country is now affronting a Great Economical Depression, as grave as the one occurred in the USA in 1930's and this is what several times the prediction that is subject of this thread was pointed it was going to occur.

Please read:

news.yahoo.com...
www.voanews.com...
www.telegraph.co.uk...

So my friends, we are officially in the beginning of the second great Depression of the History that soon will spread to other European economies and in about a year or so will spread through the great domino game of the global economy to other regions of the world including the USA.

Please check:
www.telegraph.co.uk...

www.guardian.co.uk...

Of course, the worst chapter of this second Depression that will shake the world will be when this reach China:

www.globalisationanddevelopment.com...

This is the consequence of the application in a very irresponsible way it was created the model a Global economy that was created based on the idea of to promote a giant flow of money toward only one direction in the world, this is the consequence of the "ideals" defended by the ones that dreamed into conquer economically the world, in to concentrate all the power of the world in only few hands.

Once again, as It happened in 1930, the golden rule that states that

uncontrolled ambition+bad understood business liberty = destruction of the market economy

has proven to be extremely precise. We have seen how since 1990’s, when this perverse economic system of the global economy was created from the mind of George H Bush, that an apparent temporal improvement of the macroeconomic indicators has been followed by a so long and painful deterioration of the economy in all the world.

2013 and 2014 unfortunately will be among the some of the most difficult years that Humanity never have known before, and this situation can remain longer and even deeper if there is no decision to reform the Global economy and to return to the selective protectionism over regional blocks and the so urgently needed reindustrialization of the western world.

This is horrible economic depression will teach great lessons of wisdom to many people, will show clearly that monopolizing the wealth is the faster way to ruin the future of everybody, and also will confront many other with the bad consequences of their own wrong attitudes toward wealth, it will be the end of the excessive individualism and the gradual return to the cooperative thinking.

Thanks for your attention,

The Angel of Lightness