The depression vs. today when talking about housing

TexasArtist · #1 03/14/08, 01:33 PM

According to this article todays housing slump is nowhere near as bad as the depressions. Whats' your thoughts on it?

**As old photos of bread lines and Dust Bowl migrants clearly attest, the economic downturn of the 1930s was -- and still is -- unprecedented.**

I'm thinking one we are returning to breadlines. I hear alot of folks talking about charity places have to close or not being able to feed enough people. Also the bread lines of today are probably shorter 'so far' because we have food stamps and such that we didn't have back then. Alot of these programs today were born out of the depression to ease things. Were also helped by the fact that more produce is coming from other countries. Of course now with other countries gaining more wealth it is causing problems with getting foods again. Same bowl different dust so to speak.

http://realestate.msn.com/buying/Art...1789&GT1=35000

uyk7 · #2 03/14/08, 01:54 PM

Speaking of foodlines, I saw on CNN that there are more and more riots in Africa over food/food prices.

TexasArtist · #3 03/14/08, 01:55 PM

Quote:

Originally Posted by uyk7

Speaking of foodlines, I saw on CNN that there are more and more riots in Africa over food/food prices.

all over or certain countries? I don't have a t.v. so I need you to fill me in please

RockyGlen · #4 03/14/08, 01:56 PM

My son just finished reading Nothing to Fear for school. It is about a family during the Great Depression. In the foreword, the author states, "...by 1932 almost forty percent of white Americans and fifty-six percent of black Americans were without jobs or any source of regular income."

I have not verified that - I have always heard it was more like 20%, but if that is true, it would be staggering. How many of those lost their homes? Can you imagine 4 out of every 10 people having no job? And that was back when we were a manufacturing economy - now I think it would be higher, since so many are service jobs and those would be quicker to disapear. I would also think that many of those people at least knew how to do some rudimentary gardening or foraging. How many do now?

If we do go into a large scale depression, I think it is going to get ugly fast.

TexasArtist · #5 03/14/08, 01:59 PM

Quote:

Originally Posted by RockyGlen

I have not verified that - I have always heard it was more like 20%, but if that is true, it would be staggering. How many of those lost their homes? Can you imagine 4 out of every 10 people having no job? And that was back when we were a manufacturing economy - now I think it would be higher, since so many are service jobs and those would be quicker to disapear. I would also think that many of those people at least knew how to do some rudimentary gardening or foraging. How many do now?
.

You also have to remember that alot of our jobs are going overseas or down south.
manufacturing is either heading to mexico or china
phone service help lines for those companies are heading to india or pakistan
Isn't it great to be an american

mightybooboo · #6 03/14/08, 02:07 PM

Not even close yet.

But 5% unemployment is as accurate as 2.3 % inflation reported today.

Can we get there,yep,its very possible.We had a bank fail yesterday.5th largest WallStreet Bank.That aint small potatoes,thats a major financial meltdown.

It will be a good buyers market in 2 years I will bet,even wall street analysts see 30% decline in housing prices so probably double that is possible

BTW the dollar hit yet another ALL TIME LOW today.

mightybooboo · #7 03/14/08, 02:14 PM

Oh,as for job loss,the depression 40% was mostly single earner head of household job losses.Now it is 2 job families so if one is still working at least they would have something.

uyk7 · #8 03/14/08, 02:59 PM

"all over or certain countries? I don't have a t.v. so I need you to fill me in please"

It was like a blurb about a news story they will be airing. One country, that has oil, is doing just fine while other countries are facing higher prices for food. Apparently Egypt was one country having food problems and CNN mentioned two (I think) other African countries that were having problems. If I manage to catch the story I will add more information.

BTW, wish I could get rid of the TV myself but the wife/kids would kill me. I'd rather have just a stereo.

PhilJohnson · #9 03/14/08, 03:54 PM

I get a kick out of hearing the official inflation numbers. Here in the US we use something called core inflation to measure inflation. It doesn't include food or energy inflation in the figures. I don't know about everyone else but I have to eat and heat my house and drive to work.

Part of the reason why the government uses core inflation as the official way of measuring inflation is that it saves them money on Social Security. The cost of living adjustments don't jump as much when the core inflation method is used.

If we do enter a "depression" I think it will be much worse than the first one. During the "Great Depression" deflation was a major problem. If we enter a "depression" inflation will be a major problem. Out of the two I would rather have deflation. I would rather not see the value my savings destroyed.

Right now we are seeing the value of the dollar losing value a little bit every day mean while the Fed seems intent on printing as much money as possible to bail out everyone that cries for it. Inflation is easier to do politically because it doesn't have the stigma that raising taxes has. The end result is the same, less money in your pocket. Even though the European Union has complained about how high the Euro has appreciated against the dollar they are not willing to lower interest rates. Most likely they figure slower export growth is less painful than hyperinflation.

The Fed keeps lowering rates, extending credit lines, loaning money, bailing out companies with little effect on halting the downward slide. The markets rally for a couple days after every band-aid fix is announced and then continue to slide. The Fed claims it is a credit problem that needs to be fixed by throwing tons of money at the problem.

I beg to differ. This is a Nafta problem, jobs going over to China problem, trade imbalance problem, people in tons of debt problem, flat wage growth problem. Last two economic boom periods were nothing more than bubbles, first the dot-com bubble and now the housing bubble.

The excess of credit helped create the problem we have now, not the lack of it. Interesting to note is the period of the 1920s was also a decade of easy credit. Why are there more two income earner families now, it is mostly because it is getting increasingly difficult to make it on one income.

The highest unemployment rate during the Great Depression that I could verify was 25 percent. I don't quite think the current government statistics regarding unemployment can be regarded as accurate. The government surveys 60,000 house holds each month to get the unemployment rate (http://www.bls.gov/cps/cps_htgm.htm).

Eventually I think the dollar will drop to a point where people will hit the panic button and start dumping it off in favor of something more stable. I think when that happens we can officially announce that the second Great Depression has started.

Explorer · #10 03/14/08, 06:35 PM

If I recall correctly, at the start of the depression something like 60% of families lived on farms. So I would be very suspect of the 40% figure of people out of jobs, unless you also count farmers (dairy is year round work).

Remember figures don't lie, but lairs figure.

cchapman84 · #11 03/14/08, 07:32 PM

The other big thing to remember is that many, many more people owned their homes outright back then. Long-term mortgages were fairly new (most home loans up until the first part of the 1900s were only for 5 years with a balloon payment due at the end, 15 and 30 year mortgages didn't even exist), and a lot of people lived on the property that their parents lived on before them, and so was completely paid off. People also knew a lot more about providing for themselves, and it's not uncommon to hear of stories where people were completely unaffected because they were so poor to begin with.

booklover · #12 03/14/08, 07:33 PM

I've read a lot recently about the Great Depression. The figures that I read about time and again are that at its worst, unemployment was a hair above 25% and at its best during those years before the war was 15%.

That's still a lot.

uyk7 · #13 03/14/08, 07:48 PM

"Eventually I think the dollar will drop to a point where people will hit the panic button and start dumping it off in favor of something more stable"

Actually, it has already started. The Taj Majal (sp?) used to accept the dollar for entry but no more. I read about a country in South America (Peru?) where people could place their money in a bank and use the dollar as the currency of deposit. Many of those individuals are switching to the local currency.

Deacon Mike · #14 03/14/08, 08:01 PM

Quote:

Originally Posted by PhilJohnson

I get a kick out of hearing the official inflation numbers. Here in the US we use something called core inflation to measure inflation. It doesn't include food or energy inflation in the figures. I don't know about everyone else but I have to eat and heat my house and drive to work.

Part of the reason why the government uses core inflation as the official way of measuring inflation is that it saves them money on Social Security. The cost of living adjustments don't jump as much when the core inflation method is used.

Core inflation is not the official inflation rate. The official rate is all in and includes energy and food. It is also the rate SS uses to figure COLA. Your statement is simply not correct.

Quote:

Originally Posted by PhilJohnson

If we do enter a "depression" I think it will be much worse than the first one. During the "Great Depression" deflation was a major problem. If we enter a "depression" inflation will be a major problem. Out of the two I would rather have deflation. I would rather not see the value my savings destroyed.

I guess you'd rather see the value of you assets destroyed, which is what would happen in a depression.

mightybooboo · #15 03/14/08, 08:21 PM

Quote:

Originally Posted by Deacon Mike

I guess you'd rather see the value of you assets destroyed, which is what would happen in a depression.

Which IS happening NOW with the dollars loss of value and never ending inflation.

Explorer · #16 03/14/08, 08:28 PM

Quote:

Originally Posted by PhilJohnson

If we do enter a "depression" I think it will be much worse than the first one.

The first depression in this country? Are you talking about the one in 1807-1814, surely not the one in 1837-1844, the one in 1873-1879 or maybe the one in 1893-1898 or the one in the last century from 1929-1941.

**ladycat** · #17 03/14/08, 09:02 PM

Quote:

Originally Posted by uyk7

It was like a blurb about a news story they will be airing. One country, that has oil, is doing just fine while other countries are facing higher prices for food. Apparently Egypt was one country having food problems and CNN mentioned two (I think) other African countries that were having problems. If I manage to catch the story I will add more information.

I've been seeing bunches of news stories about riots in bunches of countries due to food shortages and inflation. Try searching the google news site (maybe terms like: food riots or something).

**ladycat** · #18 03/14/08, 09:07 PM

Quote:

Originally Posted by uyk7

"Eventually I think the dollar will drop to a point where people will hit the panic button and start dumping it off in favor of something more stable"

Actually, it has already started. The Taj Majal used to accept the dollar for entry but no more. I read about a country in South America (Peru?) where people could place their money in a bank and use the dollar as the currency of deposit. Many of those individuals are switching to the local currency.

True!!

The dollar is losing favor all over.

Some businesses here in the US are now accepting foreign currencies, as well!!

pickapeppa · #19 03/14/08, 09:10 PM

Could it . . . perhaps be time for . . . certain policies that limit industries allowed open for trade as investments? It would be nice to see anything crucial to survival NOT be affected in any major way by speculative traders.

Health insurance
Oil
Home heating products
Food

charles burns · #20 03/14/08, 09:26 PM

India are on a roll - having an economic boom. I think their annual growth was 8 or 9%.

They have a newly emerging nouveaux riche middle class doing quite nicely.

They also have sewage running through the streets and poverty that would make you weep.

If you're looking for poverty in India that's all you'll see - if you are looking for riots in Africa - that's all you'll see. Africa too have a pretty impressive annual growth thing going on.

Investment in those countries by major banks on behalf of USA investors done quite nicely.