I think the results of the Iraq war could answer questions about our economy. All the negative news for years finally ceased after we increased the number of troops and the number of deaths consequently declined. The media quit talking about Iraq and things have seemed to smooth over there. The answer was the troop surge at the borders of cities and the country and the US paying bribes to the tribal leaders.

As long as there is bad news about the economy flooding the media, and it all hasn’t flushed out yet, then we will continue to see a decline. We have 24 hour news media rehashing every negative news byte reminding us to not spend money because you might lose your job.

Similar to Iraq, we need an influx of cash directed at the appropriate places in our economy to stop the downward spiral. I’m not convinced any of the “intelligence” in Washington really know the correct places to point the cash. So instead it’s directed at all the failed businesses. Seems like we are throwing money down the drain.

Oh, 10 years out, just like Japan.

Tim

The only one I’d add is to get politically active and voice your opinion to our elected officials.

Thanks

The second wave of mortgage rate resets is coming. Starting beginning of 2010 and lasting through 2012. That will be the blow. What has happened so far is rough, but it will get much worse. Seriously, most people have no idea what is in store. And it cannot be stopped. It is a snowball that is building every day.

If you are relying on the new administration to fix things, I feel for you. You can’t fix what you can’t control, and “they” can’t control it. Ask Japan how successful govn’t efforts are to control the economy by artificial inducements and regulations.

Just like the administrations of the past couldn’t control other booms, busts, bubbles, etc.

It is reversion to the mean. Statistics trump agendas every time. We are reverting to the statistical average. Go way up, get to come back down. The way back down seems harder though, doesn’t it.

Pendulums swing wide both ways as well, so expect the swing back down to be just as overly excessive as the swing up was.

Think about this for a minute. The govn’t is so panicked at what has and is and will happend they are “rushing” through billions and even trillions of dollars try and stem the problem, yet it keeps getting worse. $350 billion spend already in TARP and NOTHING has changes. In fact it has become worse. That is AFTER half of the TARP has already been spent.

Companies are hemmoraging cash faster than they can recieve bailouts. Big banks, big auto,big insurance are wobbling. The largest companies in our country are dying, DESPITE the govn’t efforts toprop them up. AIG needs 65Billion MORE. GM & Chrysler willrun out ofmoney in two months AFTER they already rec’d nearly 20 billion already.

BofA and Citi, the largest and third largest banks in the United States are essentially penny stocks. Down 80-90% in the past year.

Forget outside markets or economys. Focus on your economy. Your household economy. Invest in yourself. Your family. Your future security. Your business. Not someone elses that you don’t understand. Invest in what you know, and what you can control.

The stockmarket at this point in history is pure speculation. It is gambling, not investing. Professional investors know this. That is why the market is down. The pros are on the sidelines

Take your money and pay down your debts, build up your cash, and provide for your family’s future.

Focus on what you can control and what you can do to make your situation morestable. Then getout the popcorn.

There will be a new “normal”, w/higher taxes for those who are working and plenty of safety nets for those who like to make excuses for why they’re not productive members of society.

I wouldn’t be surprised if the cap-gains tax on housing profits would be reinstated as a way to generate some income when things do improve. If this does happen then I certainly hope our “smart people” that balbrain refers to change the tax code so that all these mortgage bailout refugees have to adjust their home’s tax basis downward by what was forgiven and have to pay tax on this margin of gain down the road. Better yet, the government should put a lien on the house for the monetary level of forgiveness so that when and if the house sells, we the taxpayers, get this handout/handup or whatever you want to call it back.

Balbrain, are these “smart people” the same ones who bailed out the banks (i.e. Northern Trust) with no guidelines or demands on how the TARP money was to be handled (responsibly and ethically)?