The Housing Crash Recession of 2007

[FranG]

I come to bring bad news today :). Ya'll ready for this next recession? It is a limit to how much money can be inflated artificially

-----------------------

The Housing Crash Recession of 2007
By Dean Baker
t r u t h o u t | Columnist

Tuesday 05 December 2006

As we approach the end of 2006, the economy's prospects for next year appear more gloomy with each new piece of economic data. And, just like President Bush in his assessment of the situation in Iraq, the economic forecasters are gradually revising their forecasts downward, as it no longer appears credible to present the rosy pictures that they had been trying to sell.

The trouble began early in the year, when the housing boom that was supposed to continue forever turned into a housing bust. The rate of house price appreciation didn't just slow, as most economists predicted, nor did prices simply flatten in accordance with their revised predictions. House prices began to fall. Nationwide, house prices are now down between 1 percent and 2 percent from their levels at the same point in 2005. (The decline is between 4 percent and 5 percent, if we adjust for inflation.) The price declines in some of the most over-valued areas, like Washington, DC, and parts of Florida and California, have been considerably sharper.

In fact, the price declines are even larger than is shown in the data, because sellers now routinely make payments that are not captured in the contracted price, such as picking up some of the buyer's closing costs or making repairs to the house before the sale. Such practices were unheard of a year ago.

When the downturn in the housing market could no longer be denied, the economic forecasters assured us that the rest of the economy would remain strong. They noted the strength in non-residential construction, strong investment in equipment and software, and of course the resilience of consumers.

This picture is not panning out well either. The non-residential sector experienced a short boom earlier in the year. This should not have been a surprise. The housing boom pulled resources (workers and construction materials) away from the non-residential sector. In some of the areas with the most over-heated housing markets, it wasn't possible to get the workers needed to build stores, offices or other non-residential structures. This meant that when demand in the residential sector eased, resources could switch to meet the pent-up demand in the non-residential sector.

But, it was predictable that this boom would be short-lived. The residential sector is twice as large as the non-residential sector. And there just is not that much pent-up demand. There was serious overbuilding in the office and retail sectors in the late-90s boom, and the continued decline in manufacturing means demand for factory construction is limited. According to the most recent data, construction in the non-residential sector was already falling off by the end of the third quarter.

The boom in equipment and software investment also seems to have disappeared. The latest numbers in this sector have been negative also, suggesting that investment will be at best a very small positive in the economy in the next year.

This leaves us with our resilient consumer. The economic forecasters assure us that strong job growth, coupled with healthy wage growth and falling gas prices, will give consumers the money they need to keep spending.

Well this story does not look very good either. Job growth has actually been slowing over the course of the year, with the private sector adding less than 100,000 jobs on average for the last two months. Falling gas prices are a positive, but since no one had expected gas prices to soar to $3 a gallon, the fact that prices have fallen back to last year's levels does not give consumers that much of a boost. Finally, we are looking at modest real wage growth (at 1 percent annually), but this is not extraordinary and not enough to provide a very large boost to demand.

The more important part of the story for consumers is that they are losing the ability to borrow against their homes. Last year, consumers pulled more than $800 billion in equity out of their homes. Many people bought their homes with little or no money down, and then borrowed against their equity as quickly as their house price rose. Now that house prices have turned down, they have no further equity against which to borrow. This means that these consumers have no choice but to curtail their consumption.

The evidence for this falloff is spreading by the day. Projections of weak holiday sales and slumping car sales top the list. Throw in the reports of rapidly rising rates of mortgage delinquencies and defaults and you get a clear picture of rapidly growing distress.

Of course, with all sources of demand showing weakness, job growth will slump further, and we'll get our classic downward spiral: declining employment, falling income, falling consumption, and then further job loss. The story is not pretty, but unfortunately there is no way to prevent it. This downturn will be especially painful because it is associated with a crash of the housing bubble. This means both that many people will lose their life's savings and also that the recession is likely to be longer lasting than most.

The picture would not have been so dire if economists had been better able to do their job. Unfortunately, economic forecasters seem more interested in happy talk than economic analysis. Not one of the "Blue-Chip 50" forecasters saw the 2001 recession coming. The record seems no better this time around.

Unfortunately, no one ever holds the forecasters accountable. Even though they all missed the last recession, and just about all of them will have missed this recession, the same group will probably still be around to miss the next recession. Some workers, like dishwashers and custodians, teachers and truck drivers, have to meet performance standards. Economic forecasters apparently just have to show up to collect their paychecks.

Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer (www.conservativenannystate.org). He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.

[Rajah]

So... how do I become an economic forecaster?

[FranG]

So... how do I become an economic forecaster?

You get out there with your notepad and make it happen :)

[cafe]

Almost everybody I know could have predicted a downturn. Wages haven't come close to keeping up with inflation. Many of the jobs the average consumer could make a decent living at have gone overseas or been drastically down-sized. People have been maxing out credit cards and pulling the equity from their homes in order to survive. It's pretty obvious that eventually there just isn't going to be any more credit to be had and then consumers will no longer be able to spend, which will hurt the economy further. Only people that are removed from the middle/lower classes would be unable to see this coming if they put the bare minimum of thought into it.

[ptGatsby]

So... how do I become an economic forecaster?


First you must discard your N. Only the present matters. History and future have no bearing on each other. This time is different. Always.

Then you must discard your I. Your opinion does not need any reflection. You simply need to throw it out there as much as possible.

Optional: You must discard your P and pick a stance. The stance doesn't really matter. This helps you align your comments... but can be made up with enthusiasm.

Tada! You are now the standard ESTx that throws absolute opinionated crap out without any need to look back over their 10-20% accuracy level along with a 80-90% confidence level. (Incidently, that is the average track record).



that eventually there just isn't going to be any more credit to be had


Nah, there is infinite credit. The whole problem is *with* credit. There is so much money sloshing around now that the waves just keep getting higher and higher. Each progressive attempt to stave off the correction adds more water, hence the waves get larger and larger... and more frequent.

[FranG]

Almost everybody I know could have predicted a downturn.

Anybody except the media :)

[darlets]

Anybody except the media :)

The media aren't stupid, they knew, it just isn't in their best interest to report it.

I used to write software for a company that supplied 80% of the Australia new's paper publishing software.

News agents (retailers) make their money off selling papers, where Newspapers (producers) make their money off selling Advertising.

Some of the Australia major papers don't make any direct profit when a newspaper is sold, they cover their cost to produce the paper and the news agent gets the profit margin.
They make money off the advertising. A 100 million dollars in advertising a year for one of the major players in Australia.

It's in there best interest to keep people buying houses because of their large Real Estate sections and they DO curtail what they're journalist can write about. There worse case scenario is when no one wants to buy or sell. They pumped up the boom.

Just recently in Australia a negative article on one of the states with a booming housing market was pulled within 2 hours of it appearing on their website. Unfortunately for the paper google has a cache.

The housing market in some states here haven't been doing very well for a long time, but you're more likely to read about it from a European based paper than an Australian one.

American and Australian media are really, really bad.

In Australia, we have these stupid breakfast shows which generally all have a roving weather man reporting from events/festival/theme parks around the country. The T.V station gets paid money by the companies that run these events/parks to show up. It's great "Free" advertising.

[cafe]

Anybody except the media :)
Like I said, anybody I know. ;)
That's not quite true, my hubby's cousin is on the TV news in Nashville. Suffice it to say she is in a different economic strata than I and most of the people I know are.

[cafe]

The media aren't stupid, they knew, it just isn't in their best interest to report it.

I used to write software for a company that supplied 80% of the Australia new's paper publishing software.

News agents (retailers) make their money off selling papers, where Newspapers (producers) make their money off selling Advertising.

Some of the Australia major papers don't make any direct profit when a newspaper is sold, they cover their cost to produce the paper and the news agent gets the profit margin.
They make money off the advertising. A 100 million dollars in advertising a year for one of the major players in Australia.

It's in there best interest to keep people buying houses because of their large Real Estate sections and they DO curtail what they're journalist can write about. There worse case scenario is when no one wants to buy or sell. They pumped up the boom.

Just recently in Australia a negative article on one of the states with a booming housing market was pulled within 2 hours of it appearing on their website. Unfortunately for the paper google has a cache.

The housing market in some states here haven't been doing very well for a long time, but you're more likely to read about it from a European based paper than an Australian one.
Interesting. That angle hadn't occured to me.

[Ferrus]

And as the economists say: when America sneezes Europe catches a cold... *sigh*

[venerationOFrabbits]

It's happening. The land surveyors I talk to are feeling the effects.

[darlets]

And as the economists say: when America sneezes Europe catches a cold... *sigh*

That's a catch cry that is becoming less and less true with the rise of Europe and Asia as economic powers. Most economist think american economic growth is going to take a hit in the immediate future, the question they want to know the answer to, is Europe and Asia now big enough to cope by themselves.

That is not clear cut, and they may very well be big/robust enough, India and China growth rate this year was 9% and 10% respectively compare to the 2.5-3% of Australia and America.

Most countries are dropping the U.S Green back, and rightly so.

[Ferrus]

UK growth has been in the 2.5-3% area too... the UK economy (in terms of market fluctuations) straddles the US and Europe to some degree, so a recession in the US is likely to hit the UK hardest.

[garak]

Buy gold!

[Ferrus]

Buy gold!
If I recall correctly for a short while after 9/11 gold had something of a comeback.

[garak]

If I recall correctly for a short while after 9/11 gold had something of a comeback.

I think I remember reading that it's been up since 9/11 in general.

[ptGatsby]

If I recall correctly for a short while after 9/11 gold had something of a comeback.


It hasn't really made a drawback...

Just an interesting note;

In 'real' terms (if gold is considered real :D ), housing prices aren't really up!

http://www.canadian-housing-price-charts.235.ca/value_in_gold_chart.htm

[Ivy]

Anybody except the media :)

Really? I could have sworn I read (or, more likely, heard-- radio is my main source of news) speculations that the housing bubble would burst soon, as far back as a year or eighteen months ago.

[darlets]

Buy gold!

May I ask, do you think it's going to get that bad? Gold generally kicks off as protection against large scale economic decline.

The U.S Fed sold off some of their gold before the election, some suggested to keep prices down (i.e lower the gold price the more stable the economy in peoples eyes).

[ptGatsby]

May I ask, do you think it's going to get that bad? Gold generally kicks off as protection against large scale economic decline.

The U.S Fed sold off some of their gold before the election, some suggested to keep prices down (i.e lower the gold price the more stable the economy in peoples eyes).


Its more a hedge against inflation than trust in non-backed dollars... though it depends on which theory you buy into.

Inflation is a good reason to buy it. A very good reason. Security? Not so much. Better to diversify holdings as a whole then.

[FranG]

The media aren't stupid, they knew, it just isn't in their best interest to report it.



I was being sarcastic. I'm with you bro; I know how the game is played.


Really? I could have sworn I read (or, more likely, heard-- radio is my main source of news) speculations that the housing bubble would burst soon, as far back as a year or eighteen months ago.

The media covers stories like this; but it's back page news (just so they can technically say they covered the story) while Britney Spear's new baby or her titty size makes the cover. Basically what darlets said, not in their best interest to cover it (or shall I say properly cover it).

[garak]

May I ask, do you think it's going to get that bad? Gold generally kicks off as protection against large scale economic decline.

Yes, but I am far from an expert, and probably more paranoid than most. I just feel that our economy is extremely phony. I've been robbed of hundreds of dollars in overdraft charges over the past year by my shitty bank, many for petty and predatory reasons. I owe thousands of dollars that I've ignored for months or years, yet I can't even tell, except some extra mail here and there. And none of it seems to really matter because in the end it's just a piece of data in a computer. But we could have WWIII right here in the USA and I'd be living large (relatively) with my gold coin collection.

</stoned rambling>

[Ivy]

The media covers stories like this; but it's back page news (just so they can technically say they covered the story) while Britney Spear's new baby or her titty size makes the cover. Basically what darlets said, not in their best interest to cover it (or shall I say properly cover it).

I don't think I ever heard a story about Britney Spears' titty size on NPR, or in the Times. What media are you watching/reading/hearing?

[darlets]

Its more a hedge against inflation than trust in non-backed dollars... though it depends on which theory you buy into.

Inflation is a good reason to buy it. A very good reason.
True



Security? Not so much. Better to diversify holdings as a whole then.
Ummm, not sure I agree/disagree, I'm going to go do some more reading.
I would have thought investing in essential, non cyclic companies (utilities companies) or gold/silver would have been the way to go but But BUT I've only started having an interest in economics over the last 18 months, so I'm far from an expert.

[ptGatsby]

I would have thought investing in essential, non cyclic companies (utilities companies) or gold/silver would have been the way to go but But BUT I've only started having an interest in economics over the last 18 months, so I'm fair from an expert.


All of those have systemic correlations, however. All companies that aren't cyclic are still equities, and fall with the markets. All 'wealth' commodities have political correlations (possibly in line with equity changes).

The only way to mitigate 'risk' (variance) is to diversify away all non-systemic correlations. For example, commodities, countries, currency, equities, fixed income.


A good example is how small cap tech stocks rose, followed by real estate, followed by commodities. That series of events is very hard to predict... and if you were heavily over-invested (say, REITs for retirement, or income trusts in Canada, what with the tax change that recently happened), any one of those would of seriously torpedoed your financial statements.


We are now in real estate... but money always goes somewhere. I'm hoping that real estate isn't the 'end of the line' for a credit crunch though... that would be serious on a scale that I don't think people could understand. In any case, if not, then the money is just going to have to go somewhere... Someone is going to benefit... But where?

[darlets]

I was being sarcastic. I'm with you bro; I know how the game is played.

Sorry, my bad, I'm just a bit touchy on the subject because alot of my friends want me to buy a house NOW, because "real estate prices never go down", "you can't lose money in R.E" or "Bricks and mortar are safe" and the media do alot to keep spinning those myths for their own gains. I don't blame the media, they're just trying to make a buck.

Peoples willingness to spend 40 hours a week making money but unwillingness to spend 40 minutes a week learning about or managing it is completely astounding to me.

[darlets]

We are now in real estate... but money always goes somewhere. I'm hoping that real estate isn't the 'end of the line' for a credit crunch though... that would be serious on a scale that I don't think people could understand. In any case, if not, then the money is just going to have to go somewhere... Someone is going to benefit... But where?

Thanks for that, I need to do some more reading. Japan had a housing market meltdown and that wasn't pretty, something like 70% reductions over 15 years.

The U.S and Australian housing market (and I think the U.K also but I don't follow that so closely) is going through a correction currently, but will it keep going???? Only time will tell.

[ptGatsby]

Thanks for that, I need to do some more reading. Japan had a housing market meltdown and that wasn't pretty, something like 70% reductions over 15 years.


Japan lost roughly 50-60%, but it was over a long period of time. And it hasn't really stopped. The situation there was very different too.



The U.S and Australian housing market (and I think the U.K also but I don't follow that so closely) is going through a correction currently, but will it keep going???? Only time will tell.


Australia certainly is, and most of the US as well. Canada is sure to follow, from what I'm seeing. Australia started the trend too, and the US can only hope to follow the same path. Doubtful, however. I expect the US to go down over about 4 years, probably somewhere around 20-40% from now. More than that, and we are talking massive defaults, less and there wouldn't be a correction. I'm not sure I could weather more than 50% downturn (hmm, actually, I guess I could... but not much more) without running into renewal problems.

In any case, basic rule of thumb: Wages rise, costs go down or real estate goes down. One or more of those should be true... only because RE is so slow and capital intensive that we couldn't adjust to smaller living spaces to offset raising costs (ie: RE is still cheap over here, comparably, but that has to do with expectations. It could stay where it is now... for 30 years... as well...)

I was in your shoes - to buy or not to buy. So I bought cheap and small, with the theory that the gap to what I want to buy will narrow and I'll be hedged either way. May or may not sell this Spring, depending on my feel for the market.

[formerly known as]

It shows that the question of monetary policy is still wide open - unfortunately this is something that a majority of the population does not realize.

[darlets]

As a slight aside, Australia loosened the lending standards for loans and the banks took full advantages. They loan up to and sometimes over 95% by having the person pay for mortgage insurance so the banks don't wear the risk of them defaulting.

It's now at the amazingly stupid level here

"GARRY ROTHMAN: We're talking about people who are on Centrelink benefits, whose only income is a Centrelink benefit, yet they've managed to obtain a mortgage.

I even had a person come to me the other day who is an asylum seeker, which means they have no statutory right to any income. She was granted a mortgage, through a mortgage broker."

Centrelink is our unemployment benefits.

full interview (http://www.abc.net.au/worldtoday/content/2006/s1781997.htm)

The government also created a "First home buyers Grant" of $7000-$14000 which only encouraged people to go into real estate and get into debt.

And just to put the last piece to the picture in place they've just put our Industrial Relation laws (pay, hiring and firing laws) through a major overhaul which loosens them more in favour of the employer.

Australian workers have now been set up to be screwed over royally, either work in crap conditions to pay off your house or quit and lose your house.

And debt levels have reach an obscene level in some countries.

This is a U.K article that details the financial woes of some Brits, the general point is they are so indebted that they will never be rid of their debt.
"Two million people have borrowed so much they will never escape their debts"
link (http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=417568&in_page_id=1770)

[FranG]

^^^^
And it doesn't help that those countries' currency are pegged to the U.S. dollar, which is totally fiat. As they continue to subsidize the dollar via non-recoverable loans, their economies are sure to go under. The U.S. economy is going down and it will take the world down with it. The Iraq war just prolonged the inevitable.

[ptGatsby]

And it doesn't help that those countries' currency are pegged to the U.S. dollar, which is totally fiat.

It is entirely possible that inflation will hit housing prices somewhere in the middle. If the real inflation rate is 8-10%, which seems likely (factory entrance prices never hit consumables, and they were all double digit... so are nearly every commodity...), then we could easily have housing prices decline marginally. Inflation measurements are always in dispute - http://www.telegraph.co.uk/news/main.jhtml;jsessionid=L0MDAXPHHEAQBQFIQMFSFGGAVCBQ0IV0?xml=/news/2006/12/04/ninflation04.xml is an example.

I haven't been tracking my expenses all that long, but I'd guess that my own personal inflation rate would be around 8%. That is to say, groceries, gas and tangibles like that... insurance and other intangibles have gone down.

This simply makes everyone poorer, since wages won't adapt properly. Strange situation, these bubbles.

Liquidity won't save this problem, no more than it will in Japan... Already there are severe distortions in the economy, the question is if something will 'snap' and rubberband the whole situation.

Real estate could, if it severely impacts jobs and forces significant foreclosures. Such a market glut with no demand could cause the whole equity bubble to collapse. The ripple effects would cause consumer demand to practically go negative (read: credit items repossesd)... This could spiral out of control... it really isn't all that far fetched.

Anyway, central to this is that there is no solution, no out. I'd give it about a 5% chance at this point. About as likely as no correction.

[darlets]

^^^^
And it doesn't help that those countries' currency are pegged to the U.S. dollar, which is totally fiat. As they continue to subsidize the dollar via non-recoverable loans, their economies are sure to go under. The U.S. economy is going down and it will take the world down with it. The Iraq war just prolonged the inevitable.
The rest of the world is going to try and avoid that.

" * October 18: Australia?s Treasury Secretary, Peter Costello, calls on East Asia?s central bankers to ?telegraph? their intentions to diversify out of American investments and ensure an orderly adjustment. Costello said ?the strategy had changed? and that Chinese central bankers were now looking for alternative investments.

* October 30: Sultan bin Nasser al-Suwaidi, the governor of the central bank of the United Arab Emirates, told a meeting of central bankers from Gulf States that the bank eventually wanted to lower its reserves in dollars by anywhere from 8 to 50 percentage points!

* October 31: Japanese life insurers, who manage the equivalent of $1.6 trillion in assets, say they may cut holdings of U.S. Treasuries.

* November 8: At a Frankfurt conference, The People?s Bank of China Governor Zhou Xiaochuan states that China has very clear plans to diversify its currency reserves, which now stand at more than $1 trillion. A wide range of instruments are under consideration, he says, including gold and oil. "

The U.S economy going down will have a big affect, but there's alot of Asia/Europe trade going on now, so whilst it won't be great for them, I think they can survive without the american market.

[FranG]

The rest of the world is going to try and avoid that.

" * October 18: Australia?s Treasury Secretary, Peter Costello, calls on East Asia?s central bankers to ?telegraph? their intentions to diversify out of American investments and ensure an orderly adjustment. Costello said ?the strategy had changed? and that Chinese central bankers were now looking for alternative investments.

* October 30: Sultan bin Nasser al-Suwaidi, the governor of the central bank of the United Arab Emirates, told a meeting of central bankers from Gulf States that the bank eventually wanted to lower its reserves in dollars by anywhere from 8 to 50 percentage points!

* October 31: Japanese life insurers, who manage the equivalent of $1.6 trillion in assets, say they may cut holdings of U.S. Treasuries.

* November 8: At a Frankfurt conference, The People?s Bank of China Governor Zhou Xiaochuan states that China has very clear plans to diversify its currency reserves, which now stand at more than $1 trillion. A wide range of instruments are under consideration, he says, including gold and oil. "

The U.S economy going down will have a big affect, but there's alot of Asia/Europe trade going on now, so whilst it won't be great for them, I think they can survive without the american market.

Yeah but there's still one big problem; these countries need U.S. dollars to buy petroleum. That's the only thing that'sstopped the dollar from totally tanking. They invaded Iraq cause Sadam said he would sell oil for Euros instead of dollars. That's what did him in; not WMD or terrorism. But of course the media doesn't talk about shit like that.

[formerly known as]

They invaded Iraq cause Sadam said he would sell oil for Euros instead of dollars.

Yes, but then they can just change those usd into euros or whatever afterwards. What I'd like to know is how much float of usd is actually held, to facilitate the trade of oil overall.

[thelastsortasane1]

I any case, I think we never recovered from the recession of 2000-'01.

Here's why:

They have, as some have already mentioned, been drastically undercalculating inflation by just conveniently not counting food and fuel. GDP=(more or less) growth in annual transactions-minus inflation. Therefore, if inflation is greater, real growth must be much lower to nonexistent. This is camouflaged further by keeping unemployment low by providing plenty of shit jobs after a lot of the good ones have been outsourced. Oh, and yeah, people are living off of credit cards and home equity(probably falsely) anticipating a better day. I don't think they'll say it when we hit recession or even complete collapse. The disconnect between the CNBC happy talk and what I've seen even highly skilled people go through the past 3-4 years is mind-boggling. We'll simply go down in an Orwellian slow burn. Haven't you heard they've riased the chocolate ration from 30grams to 20? Also, as our economy contracts, the top 1percent will simply collect from us have-nots and have-somes through things like foreclosures, garnished wages, etc. In ten years, a big chunk of the American population will live in very third world conditions, but the media happy talk won't abate much.

One more thing: There has not been a hot new industry since the bursting of tech bubble to sustain a decent recovery. Alternative energy would have been nice, but that technology is still mostly talk, little action. I now believe it is too late to make a peaceful transition in that department, too. No surplus fossil energy=no way to manufacture the gazillions of windmills, solar panels, fuel cells necessary.

Oh yeah, screw the dow over 12,000...it floats on an infinite sea of hot air and the big insiders simply trading back and forth to jerk each other off. No relevance to the big picture.
I also agree with FranG when he implied that the Iraq war may have been partly about priming the pump through military spending(doesn't hurt Bush-Cheney's cronies, either).

[FranG]

Yes, but then they can just change those usd into euros or whatever afterwards. What I'd like to know is how much float of usd is actually held, to facilitate the trade of oil overall.

This doesn't work though because nobody wants to be long on dollars in the FX market, it the value of the dollar is declining (due to U.S. domestic issues). These countries lose when they hold on to the dollar. But right now they have no choice because they need that oil. Basically the U.S. is being subsidized by the rest of the world right now. Goods are received by the U.S. but they don't send anything back. But because they have the Arab oil producing nations in their back pocket via U.S. puppet governments, it's like the U.S. is de facto owners of the oil. So it's like the oil is coming from the U.S. but it really isn't.

I didn't articulate this well. Hopefully you understood :).

edit// Good post thelastsortasane1. Nice way to sum up the "real" economic picture

[Ferrus]

American and Australian media are really, really bad.

British media has become similarly bad. Maybe it is because so much of it is dominated by a guy who is not quite Australian, but not quite American - even though the thought would send his Gallipoli reporting grandfather spinning in his grave.

[Larkin]

We have 90,000 homeless in Los Angeles, 60,000 in NYC and countless others in all the cities.

People are collateralizing their high interest credit cards with their homes. This is just the beginning, forecloses are spiking, The cost of health care is rising beyond afordability and finally the feds just keep printing more and more dollars.

The good news you are hearing on MSNBC is corporate earnings are up!