[Eli]

Well I think there needs to be a clarification really in a lot of ways the economy is great in most parts of the country.

People are still out buying shit and eating dinner out.

The way this all is coming apart it is coming from the top down, which is much more ominous. This is a great depression style melt down where the man on the street is the last to know how screwed he is.

That all being said housing is about the only way one can see the effects of the systemic come apart that is happening at the top. My sister lives on a real crappy block where flippers were working, there are now houses that were in mid flip and the builders walked away.

Just today I was talking to a mortgage person and they said there are so many people that they cannot get funded for home loans. 6 months ago it would have been no problem, now it can't be done.

The last thing we are going to see is a rise in unemployment. The next step in this death spiral is going to be a shity Holiday season because the credit window has been closed.

Luckily we have lots of cheap oil so we should be fine.(sarcasm)

Next summer people are going to be walking around like zombies wondering what in the Hell just happened.

[Alpaca]

Well, regarding housing... I can verify that lending requirments have gotten ridiculous as of late. The mortgage companies that have been handing out sub-prime & "no-money-down" loans for the past decade are now making things so difficult that I wonder if anyone's getting approved. I heard yesterday that foreclosures are up 58% from 6 months ago, so if yer a 1st time buyer & can't put a large amount down, good luck.
On a personal note... we've been jumping through hoops with the mortgage/ title companies for the past few months. My wife & I could individually carry a mortgage but they've been practically asking for our 1st born as collateral. We're putting $100,000 DOWN on our new house, and they still weren't satisfied. We've been "approved" for the loan since June, but they won't finalize it; they just keep requiring more and more documentation so that when they 'bundle' it for re-sale it'll be worth more.
When we finally closed on our house in Chicago last week, we discovered that FEMA has declared the 30 acres we want to buy as a newly classified Zone-A floodzone, so now we're in complete limbo. Not to get off topic, but I strongly suspect that alot of property has been reclassifiied since Katrina to help recover their (& private insurer's) losses. Anyone else have news?
Back to topic...I think one more quarter of people unable to make housing payments, and unable to get approval to buy, and the term 'slump' mat not accurately describe what's happening...

[Iaato]

OK, I'll bite. Gideon and Eli both have points. While our Costco no longer has lines at the checkout on the weekends, and the Home Depot is devoid of people, there are signs that spending in some sectors is still ongoing. Neighbors who built a huge McMansion just upgraded their SUV to a shiny new Dodge Durango with all the bells and whistles. It was painful to watch the demonstration of all the moving parts in this thing. While the auto dealer ads on TV are starting to sound a little desperate and shrill, big-ticket items are still getting bought by some.

I've got a theory that the main reason for Bush's popularity has been his invitation after 911 to "go shopping and support the economy." He gave everyone permission to indulge, gorge, overspend. The credit card is going to have to be pried from the consumer's cold dead hands. And the only way to see the catastrophe coming is to read and then to think critically, against the herd. The American consumer has no idea what is coming down the pike until it hits him or her in the face.

[NotMyBlood]

From my personal experiences, I see it in very small ways. Maybe so small it doesnt matter. However, things like a soda going from 1.25 - 1.35. (okay so what , prices are always going up, but that's a pretty big jump IMHO). Then, my boss wants to retire. (As soon as he can sell the house). Its taking longer to sell, so hes hanging around......I don't hear about planned vacations anymore, the attitude and feel of any given happy hour at any given bar has gone from "excited" to "on edge", if that makes any sense???


I see it in commercials. How many debt consolidation companies are there??? On the radio too. Also, its become increasingly harder to obtain a job. Im constantly looking for work, just as a failsafe in case I get laidoff or fired. Downsizing happens all the time and I have a big mouth that gets me in trouble. So, I'm constantly talking to recruiters......Its taking longer for them to contact me and when they do its usually not that great a deal...

little things.....

[FoxV]

$this->bbcode_second_pass_quote('Gideon', ' ')An indication of the pig faced bankers tightening lending standards and of the inability of the average home buying wannabe to bring credit worthiness to the table.

[Byron100]

I think what we're seeing now is just the tip of the iceberg. After all, May and June were still pretty good months in RE, with mortgage approval rates still high, plus the "wealth effect" of the stock market hitting fresh highs for weeks on end pumping some extra juice into the economy.

Now all that's changed of course, but it's going to take some time for the sheer inertia of the economy to reflect the new realities of tight credit, etc. But yeah, I do notice the change in people's outlook and and collective awareness that the inflation is only going worse, housing prices really are going to drop for the foreseeable future, and if the stock market keeps dropping, that will only add to the gloom about the economy.

I think the real fallout will take place this fall and holiday season, when unemployment takes a big jump upward and millions of people coming up against hard spending limits. Another thing to consider is the on-going effects of the average FICA score for the population as a whole dropping as millions of people go through foreclosure in the coming months.

Since the FED is so reluctant to lower interest rates, you can bet they're going to play fiddle with the numbers as long as possible...which will surely make things rather interesting for the 2008 elections, when the real show begins.

The way I see it, we're just now been served the appetizer, with the main course being prepared in the kitchen as we speak...

[Eli]

I am with Byron,

We have a top down situation right now, and it is hitting the guys at the top first. My best evidence is this, a guy I know who was going to do a multi billion dollar buyout purchase but then bam! right at the end the bank said no way.

The consumer is crapping out but these are still the good times overall. It will get worse when the stores are empty during Christmas, that is when it will become obvious.

This is trickle down economics but at rain that is falling.

[Jack]

The "For Sale" signs are sprouting around my house - older, established neighborhood, which shouldn't have had too many of the badly overpriced houses - and those houses aren't selling.

Down the road is a very upscale neighborhood - houses worth multiple millions. A "starter" can be had for a half-million. Signs sprouting, yards growing weeds, and a few people disappearing to move...somewhere.

Restaurants, from high end to low end seem to have a LOT less business.

[Jack]

How's this for a sign:

$this->bbcode_second_pass_quote('', 'G')M and Ford posted double-digit declines in vehicle sales for July as the housing slump and high gas prices hurt demand. Toyota's U.S. sales also slid, but the Japanese car maker outsold Ford. Chrysler's fell 8.4%. 5:01 p.m.

[Tanada]

My boss lost his job today, after 26 years on the job as a workaholic controll type A personality.

He called me in tears to tell me goodbye and say thanx for all the work the crew has done for him.

I am still in shock, I never beleived this day would come. My contract is currently in negotiations, now I get to see if the board of directors is playing hardball with all of us, or if it was a personal thing.

Wish us luck!

[cube]

Several years ago there was a strip mall built near my house. *example*
Recently 1 store just closed down. --> ouch

Now there's a beautiful "For Lease" sign that can be seen as you drive along the main road. I wonder how long that sign will stay up?

If you're into small businesses going belly up and "For Lease" signs popping up here's a good read BOSTON'S CRUMBLING ECONOMY

[Bas]

seems like the high oil prices are finally making some impact, no such signs in the European economies yet though.

[Barbara]

Italy.
July: +10% car sales.

Crisis? What crisis?

[mark]

Chicago is Booming!!!

Cranes everywhere, road construction holding up traffic everywhere, restaurants full and popular afternoon radio DJ says, “What a great economy, if you can’t find a job in this economy…”

Yea, it’s true, there’s no evidence our economy is slowing around here even though the residential real estate market is dead. Dead though is a relative term as condo’s, single family homes and apartment buildings are still going up all over. The near south side looks like a new city suddenly springing up. And, commercial real estate is still very strong.

Anyone who drives around Chicago will say the same thing.

Of course, that’s what the peak is supposed to look like, right!

All these predictions of an eminent bursting of the economic bubble are just so much hot air. The PTB know how to handle all these simple bubbles like credit, housing, and the stock market. Observe the PPT at work in today’s last minute rally. It will be the unexpected, “black swan” that finally undoes all their careful maneuvering.

Who can know when that will be?

[NotMyBlood]

Mark - I agree. The economy is booming for the already Haves. Which includes a great deal of people. And the Global economy will suck up this Housing debacle with no problem and the Dow won't crash.

However, its the normal every day person that has to wait another 6 months before he can retire becuase his House won't sell. He should already be in 'paradise', but he is still working. Not exactly a "crash" for him or the American Economy but a pain in the ass no then less. He's also watching his retirement fund lose money in the last week........not alot of money, but still, i real bummer. Add to that , higher gas prices, a little inflation here, higher traffic tickets, more commutes.....Still, not that big of deal, everything is Fine!! Party on Wayne! But, its creeping, its all adding up and eventually your boiling instead just sitting in warm water.

[Clouseau2]

$this->bbcode_second_pass_quote('Bas', 's')eems like the high oil prices are finally making some impact, no such signs in the European economies yet though.

[cube]

*points at chart above* Damn! My gut instinct always told me there was too much retail space in America. (more supply then demand)

For more "Anecdote evidence" http://deadmalls.com

[mommy22]

I have a tale to add about the housing market. My 13 year old daughter's friend's family were due to move over the summer. The Dad is already working in the new location, and the house has been on the market since April. We saw them today, and she told me that there was not even 1 walk-through the entire month of July. they had to re-enroll the girl back into this school system, and since 2 other houses on the street that are for sale lowered their price, this family feels obligated to lower theirs, which would have them at the price they paid for it several years ago.
So, the family is split, and who knows how long it will take to sell the house. It might be many more months before the family is reunited. I wonder how many other families are having similar situations.

[MiamiRob]

In the last year, three of Miami's best restaurants have closed. Pacific Time (on Lincoln Road in the heart of South Beach), Max's Grill (Miami Beach) and Norman's (Coral Gables). All were expensive and all had amazing food. The rents got too high and diners started going to much less expensive places. The decline of these great restaurants started right after the Miami real estate market peaked in late 2005.

The real estate market here is becoming a bloodbath. Condos that sold for $1MM a couple of years ago can now be had for under $800K. And the price decline has really just begun...

[joewp]

$this->bbcode_second_pass_quote('mark', 'C')hicago is Booming!!!