I am from Kentucky but have lived in Chicago for about 20 years. Much of my business involves various aspects of real estate acquisition, management, sales and financing.

 

We started seeing a slow-down here in the 4th quarter of 2007 and a grind-to-a-halt in early 2008. I also have business interests in Kentucky and things have slowed down in those businesses, too, but without the boom we really didn't have much of a bust in that sector.

 

Anyway, we hobbled along for two years now, waiting for a recovery of the real estate market and it is still as flat as it was two years ago. I really expected to see some uptick by now but at the street level (regardless of government or media reports) things are bad and getting worse.

 

Credit markets are frozen and banks would like to lend money but they have so much capital tied up in loan loss reseves due to the regulatory downgrade of many loans that are otherwise performing and seemingly solid.

 

When I look out at the 3-5 year horizon, I don't see anything that is going to get things moving again. Business people are scared and consumers are continuing to tighten up on spending. I am afraid that we are only in the early stages of this economic disaster.

 

Here in Illinois, the state is behind on payments to the University of Illinois to the tune of hundreds of millions of dollars. The University has had to furlough workers and make cut-backs. How can the state raise the money? They have to increase taxes. This state is already non-business friendly with taxes and taxes upon taxes. This will just continue to stall any recovery and unemployment will likely rise.

 

These are dark days and I can't even guess when the sun is going to come up on this economy.

 

Anybody have any economic indicator or other news that will shed a glimmer of hope on a recovery?

I am from Kentucky but have lived in Chicago for about 20 years. Much of my business involves various aspects of real estate acquisition, management, sales and financing.

 

We started seeing a slow-down here in the 4th quarter of 2007 and a grind-to-a-halt in early 2008. I also have business interests in Kentucky and things have slowed down in those businesses, too, but without the boom we really didn't have much of a bust in that sector.

 

Anyway, we hobbled along for two years now, waiting for a recovery of the real estate market and it is still as flat as it was two years ago. I really expected to see some uptick by now but at the street level (regardless of government or media reports) things are bad and getting worse.

 

Credit markets are frozen and banks would like to lend money but they have so much capital tied up in loan loss reseves due to the regulatory downgrade of many loans that are otherwise performing and seemingly solid.

 

When I look out at the 3-5 year horizon, I don't see anything that is going to get things moving again. Business people are scared and consumers are continuing to tighten up on spending. I am afraid that we are only in the early stages of this economic disaster.

 

Here in Illinois, the state is behind on payments to the University of Illinois to the tune of hundreds of millions of dollars. The University has had to furlough workers and make cut-backs. How can the state raise the money? They have to increase taxes. This state is already non-business friendly with taxes and taxes upon taxes. This will just continue to stall any recovery and unemployment will likely rise.

 

These are dark days and I can't even guess when the sun is going to come up on this economy.

 

Anybody have any economic indicator or other news that will shed a glimmer of hope on a recovery?

The bolded part is the key. Until people start spending money the White House, Media, and who ever can say what they want about things looking up.

 

Our customer base spans across just about every type of industry you can imagine. We deal with lawn and garden equipment manufacturers, automotive, appliance, recreational sports equipment, construction, furniture, just about everything. We see no increase coming in sales in any of these industries. As a matter of fact most are down more now then they were 1 year ago.

The bolded part is the key. Until people start spending money the White House, Media, and who ever can say what they want about things looking up.

 

Our customer base spans across just about every type of industry you can imagine. We deal with lawn and garden equipment manufacturers, automotive, appliance, recreational sports equipment, construction, furniture, just about everything. We see no increase coming in sales in any of these industries. As a matter of fact most are down more now then they were 1 year ago.

 

What money are people going to spend? I certainly don't have expendable cash, so where does the money come from?

What money are people going to spend? I certainly don't have expendable cash, so where does the money come from?

If the government will get out of the way of business, the money will be there.

If the government will get out of the way of business, the money will be there.

 

Honest question RTS: How is government in the way of the Real Estate Market that Mr. Network described? It was business (banks) that looked the other way (unrestrained in my places) and loaned, loaned, loaned until they burst.

What money are people going to spend? I certainly don't have expendable cash, so where does the money come from?

 

Good point, that's why I agree that we could still be in the early stages of this economy. Also, those with the cash aren't ready to spend it. We've had several people in another thread say while they'd like to buy a house and have what they think are stable jobs, they are reluctant to pull the trigger given the events of the past 2 years.

Good point, that's why I agree that we could still be in the early stages of this economy. Also, those with the cash aren't ready to spend it. We've had several people in another thread say while they'd like to buy a house and have what they think are stable jobs, they are reluctant to pull the trigger given the events of the past 2 years.

 

I appreciate the compliment, but as most anyone can tell you I know little of personal finances. So it was a real micro and macro question.

 

Here is why I am a progressive - and this is not to nit pick, but currently we have a large concentration of wealth in this country in a relatively few hands. If it is not loosed from those hands who has money to spend. We all know that median family income has decreased since the 70s, so all of the spending we have been doing is debt spending and now we are worried because individuals can't get loans.

 

It is a real question, that I hope someone will show some real insight on, where does spending money come from, and how can it be generated in this economy?

 

I work in public education and the legislature says to raise for me this year - I am not complaining - but I certainly am not going to go out and spend much money either, if I don't spend I don't create a demand so producers don't produce, so where are we? Where does the money come from?

I appreciate the compliment, but as most anyone can tell you I know little of personal finances. So it was a real micro and macro question.

 

Here is why I am a progressive - and this is not to nit pick, but currently we have a large concentration of wealth in this country in a relatively few hands. If it is not loosed from those hands who has money to spend. We all know that median family income has decreased since the 70s, so all of the spending we have been doing is debt spending and now we are worried because individuals can't get loans.

 

It is a real question, that I hope someone will show some real insight on, where does spending money come from, and how can it be generated in this economy?

 

I work in public education and the legislature says to raise for me this year - I am not complaining - but I certainly am not going to go out and spend much money either, if I don't spend I don't create a demand so producers don't produce, so where are we? Where does the money come from?

 

 

I think what you meant to say was in comparison to costs, the value of the median family income has decreased since the 70s....I can guarantee you that the median family income level is a higher dollar amount than it was in the 70s.

I think what you meant to say was in comparison to costs, the value of the median family income has decreased since the 70s....I can guarantee you that the median family income level is a higher dollar amount than it was in the 70s.

 

agreed. Misspoke.

 

Buying power is much lower.

"Spending money" (disposable income), in my mind, comes from living below your means. Too many people in this country live above their means.

 

That goes hand-in-hand with the lending/borrowing that led to the meltdown. Many people without the ability to repay home loans were given loans. They didn't repay them and the lenders were compromised. The lenders then had to tighten up credit and that caused another wave of problems as businesses could not access the money that they may have needed to grow or add employees.

 

I am afraid that everything is going to have to correct (reset)...we had a correction in the stock market and the real estate market and now we are seeing it in the job market. All of our expecations are probably going to have to change before the discomfort goes away.

I read this week that a group that monitors long-haul truckers purchases of fuel indicates that the near future is still going to be down.

What money are people going to spend? I certainly don't have expendable cash, so where does the money come from?

Didn't say I knew that but just what it was going to take to get the economy back on the right track.

 

I agree that the cost to income gap is far greater now then it was in the 70's. Most if not all of that has to do with the credit boom. In the 70's when you wanted a TV you saved until you had enough to buy one. Now you go get a Best Buy card and BAM, you got yourself a TV. Can you really afford it, probably not. But everyone in this country thinks they are entitled to a $5000 60" Plasma making $10 an hour. People can blame the banks all the want and while they shared in the the down fall a good percentage of the blame as to be placed on the fools that borrowed way beyond their means. It's the red faced 10 year old attitude way too many have in this country of "I want it now".

I appreciate the compliment, but as most anyone can tell you I know little of personal finances. So it was a real micro and macro question.

 

Here is why I am a progressive - and this is not to nit pick, but currently we have a large concentration of wealth in this country in a relatively few hands. If it is not loosed from those hands who has money to spend. We all know that median family income has decreased since the 70s, so all of the spending we have been doing is debt spending and now we are worried because individuals can't get loans.

 

It is a real question, that I hope someone will show some real insight on, where does spending money come from, and how can it be generated in this economy?

 

I work in public education and the legislature says to raise for me this year - I am not complaining - but I certainly am not going to go out and spend much money either, if I don't spend I don't create a demand so producers don't produce, so where are we? Where does the money come from?

What do you suggest?

Here is the frightning picture

 

http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?request_action=wh&graph_name=CE_cesbref1

 

Basically 7,000,000 non-farm jobs lost since January of 2008.

 

 

Lets do some math.

 

7M jobs. Lets assume an average of $50,000 a year in pay.

 

That is $350,000,000,000 or ($350 Billion) of income taken out of the economy on annual basis.

 

Assuming each of those job was making a mortgage payment of $500 a month. The amount of mortgage monies taken out of the economy on an annualized basis is $42,000,000,000 ($42 Billion). The amount of social security dollars is around $52,500,000,000 ($52 Billion). Remember 1/2 by employee and 1/2 by employee or the whole 15.x% if you are self employed. Government non-means tested programs are hurting badly.

 

Payrolls are the key. Not the highly publicized unemployment rate. The Unemployment rate went down in January, but NFP continued to go up. The NFP is not crashing like it did in late 2008 and 2009 but it continues to drop. Until that statistic rises, and rises dramatically there will be no recovery.

Edited February 12, 201016 yr by Bluegrasscard
spelling. slight addition.

Honest question RTS: How is government in the way of the Real Estate Market that Mr. Network described? It was business (banks) that looked the other way (unrestrained in my places) and loaned, loaned, loaned until they burst.

They (banks) were forced and threatened and bullied by the govt and people like Obama through organizations like ACORN to give loans to people that didn't qualify.