First half 2008 - No Good Economic News
The New York Times laments that the credit crisis has passed the one year mark,
and the financial mess continues today as a global recessionary threat.
Consumer sentiment has fallen to its weakest levels since 1980 because
every month seems to bring a new crisis: US housing market crash,
credit crunch, Bear Stearns, foreclosures, weaker dollar, oil price
shock, inflationary pressure, global food inflation, Chinese market
crash, global market drops, global housing market falls. Each crisis
has been tilting towards worst case scenarios because their aggregate
effect multiplies the damage: Oil at $140? Blame the weak dollar and
speculators. Housing price crashes? Blame lender illiquidity. Shanghai
Composite cut in half since October? They're the ones with rising oil
demand and now it's twice the price. The effect on the consumer is akin
to a death spiral.The American consumer has thrown in the towel. The uncertainty has taken its toll over the past year. Barack Obama capitalized on the fact that 80% of Americans believe the country is on the wrong course. The main reason why the markets aren't in oblivion is the contrarian hope that such endemic gloominess might spell the bottom. And that uncertainty about whether we're at the edge of recovery or doom continues like a monkey on the back. This is the pain consumers feel and the reason why the housing market remains paralyzed.
In one paragraph you summed up the snapshot of the world in relation to money-real estate and economy. I liked that you did it that way because in any puzzle we need all the parts. From a writers view you included the feelings and the facts making it compelling and of value. I look forward to other articles.
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We haven't reached sufficient despair to make bottom. Either we get a watershed event that drives all markets quickly and dramatically lower (and to a bottom) or we are going to slowly drift to a bottom that won't be readily apparent until well after we hit it.
The quick bottom, while painful, will have a much less severe impact on the majority of people than a long slow road to the nadir.
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There's a lot of bad and good in the world. When you do nothing but report on bad (most of the mainstream media), you create negative feelings. Believe me, I was in media once; I saw it first-hand.
Your final paragraph hits it squarely on the head. Nice job (as usual).
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Just like the weather, real estate is local. Even within a metro area conditions differ from place to place. I understand reporting about the national economy and real estate market, but messes up psychology in areas that are actually pretty healthy, like Austin.
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I agree that the main cause of our economic problems is consumer confidence. I recently heard a speech by two of the country's best economist and they mentioned this as the major problem.http://www.capitallistings.com/focus-bad-news-creates-problems-markets
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