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Originally Posted by RIJIMMY
yes, but then, the downturn was fueled by the terrorism threat. Basically a perception issue and consumer confidence. Today, this is not a perception issue, we have NEVER had a 700+ billion bailout package. We have not had this many housing forclosures. Even Roosevelts New Deal, had some tangible output, can anyone say they know what the 700 billion has done? No.
The past 10+ years we have built an economy on credit. Home loans, auto loans, credit cards. That bubble has burst. It is an absolute fact, this is not from CNN, but from senior investment analysis that our housing market is still 15-18% overvalued. If that continues to correct itself, you will see a doubling of the problems we have today. Doubling! 2009 will see many, many more layoffs.
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Good points and I agree. I also look at the pessimism which usually accomodates market bottoms. Not sure its peaked yet, but its getting there.
Ever read Peter Lynch's book where he refers to the Mayan empire? They continually look backwards and worry about the same problems recurring, only to be impacted by something completely different? They built homes in the trees and suffered through fire.....then built homes in rock to avert fire, but were then destroyed by earthquakes....built homes near water to avert earthquakes, but were destoyed by floods, etc. I think he concludes by saying the "next big anything" usually turns out to be something different. In other words, this won't be the next 1929, but something different.
You mention perception and consumer confidence being factors in the early 90's. These two things have a lot to do with the current mire we're in now, too. Commercial lending is actually up over the last year according to a report one of my financial planners forwarded me. Consumers will follow at some point.