CHESSNOID

I still remember studying micro and macro economics in college and enjoying it immensely.  Most of it is just theory and after thoughts of cause and effect in history.  Even thought the history books themselves were boring, the discussions in class were very thought provoking.  That is probably what I miss the most from my college days at Woodbury University. I graduated from there in 1988 and wish i even took more classes. I still can’t believe its been 20 years! Of course, I don’t have the same perspective back then.  At that time, I just wanted to get the hell out of school.

Anyways, the latest post from DrHousingBubble’s blog made me reminisce of those lectures and discussions from old times.  The blog post is called:

Financial and Economic Amnesia: A Society who has Long Forgotten the Great Depression. 3 Critical Tipping Points: Technical Trading, Retail Sales, and Biggest Market Volatility.

If you think the blog title is long, then you won’t be surprised that the actual post is even longer.  That is actually a good thing, if you are like me, enjoy reading business related issues with thought provoking insight. He has posted about the Great Depression numerous times and was doing it before we were in the severe state of recession we are in now.  I wouldn’t have believed it a year ago, but all the signs seem to be pointing that direction now.

The economy is weakening dramatically. The housing crisis is still unfolding before us and  the bottom is still not near.  There is a number of loans scheduled to reset in 2009 which are not in default.  When those rates and payments reset, I think many more homeowners will assess the overall situation and make a decision that will best benefit their families which will probably be to walk away and give the keys back to the bank. Starting over seems to be the best option.

The stock market is not doing any better than the real estate market.   I think it is down about 35-40% in the last 12 months.  I doubt the bottom is any closer than the real estate bottom.  Long term I think it will make a comeback as long as you are dollar cost averaging consistently.  By long term, I mean 10-15 years in it every month. Now that is a long term commitment. The fundamentals and technicals all are still trending down and it hasn’t flattened out yet, so I am holding off before I jump back in.

As far as jobs are concerned, I think the layoffs are starting to pile up.   It seems like everyday we have a major company announcing a layoff in an effort to fight the recession and keep its head above water. Hopefully, the layoffs start to slow down before the new year.

On a positive note, Bush will soon be out and we will have a new President Obama who seems to give many Americans hope for true change.  Hopefully, we can translate that enthusiasm into a new economy that prospers.  I think anything at this point will be better than the 3 stooges Bush, Bernanke, and Paulson running the show.