Why It’s Worse Than You Think

The skeptics were right: House prices can't sustain a 50% jump at a time when median incomes are actually slightly DOWN when adjusted for inflation. Only the top (and especially the top 1%) has benefited under Bush. House prices have further room to fall, and the damage will be greatest in far-flung suburbs.

By itself, the mortgage meltdown looks like another greed-based bubble following on the dotcoms, derivatives, S&Ls, leveraged buyouts, etc. Combined with the energy problem, though, it gets much worse. Even the traditional measures of whether you can afford a house that banks ignored could be too lenient in a time when household budgets are getting hammered by gas and food.

Daniel Gross is simply not up the task of this article-- determining whether the current situation is very bad, .bad but getting better, or not as bad as many think. Newsweek needs to hire someone with real training in economics. Prior experience writing for Slate does not cut it.
Gross's understanding of economics is very limited. A statement such as 'The financial system is supposed to be a tube,' is a 'gross' simplification that creates a misleading analogy. The financial system is feedback loop through which the Fed can not simply force through liquidity like water.
The Fed money injections are dwarfed by international capital flows and household savings, let alone regular business cash flow. So 'today banks are acting more like dried sponges, absorbing the liquidity the Fed is providing to shore up their balance sheets and make up for losses' is nonsense, or otherwise we would see interest rates rising for short term borrowing. And of course, '55 percent of commercial banks said they are tightening lending standards on commercial loans'. Would we want them to lend loosely as the economy slows and risks of default rise?
Finally, let uis all realize that when someone writes 'Economists say it generally takes nine to 12 months for Federal Reserve interest-rate cuts to work their way into the system' they are too lazy to ask real economists.

In sum, quoting Warren Buffet The smarter the journalists are, the better off society is. [For] to a degree, people read the press to inform themselves-and the better the teacher, the better the student body. - Warren Buffett

so the GDP will grow exponentially as marriages fail, stress induces cancer, war brings thousands
of medical procedures, and suicides boost the funeral biz... and thats a good thing?

so the GDP will grow exponentially as marriages fail, stress induces cancer, war injuries generate
more medical procedures, suicides boost the funeral home biz.... and thats agood thing?

some of the comments on jews go really far. one thing though is this. America first. if you want to fight for isreal go there, do not influence America on this.

Hillary Supporters beware and rememeber the wolf's clothing Republican!!!!

John MCCain and his dog pack Republican impreached BILL CLINTON out of Oval office,for Monica lewisky scandal,Even Republican party Knows John MCCain scandal during his Military serivce in Vietnam to and fro from his base doing his sinful Bigamy affairs being allowed with Military Blessing ???cheat his first Wife...Just because at that time his Father incharge and Admiral right????/Now You Republican nominate him as Candidate??? what a Hypocrites Bunch!!!!!!

If US has a PRESIDENT of this magnitude appeals WOW !!!!!!really AMAZING real Talented never in AMERICAN history before,Im really PROUD to be American Again,,he's Zionist, Muslim, Christian, Black, White,Buddist,Hindu,Bengali,African,Red-Indian,Chinese,Japanese,Hawaiian,..........WOW this all are an ASSETS smart Americans can be proud of,only the FOOL and STUPID can treats this as LIABILITY that look exactly like themselves.

Barack Obama would actually be much better for America security. There's no doubt to me McCain would be better than Bush, the Bush years being probably as much about fueling terrorism than fighting it. But McCain would still represent (but less) what can be seen as America's arrogance, something that makes USA so unpopular around the world. A black man with Hussein as a middle name would send a clear message in Middle East that America is about freedom, an important contrast with some form of imperialism. Combined with Obama intelligence about understanding dialogging with enemies, I humbly think this would affect directly terrorism recruiting. I may sound over-optimistic, but I think his image alone as a president could do more for democracy in Middle East than any war.

This Economy common sense!! yet many Americans have difficulties to understand the basic of their existence in first place.Check out the fate of Sodom and Gomorrah (Genesis 18 and 19). Take a look at Romans 1:22-32. Pretty sobering reading - if you are not too self-important and arrogant to think you've already got it all figured out and don't need the input of the Ancient of Days. Don't guess they teach Proverbs 1:7 at those Ivy League school.

The U.S. housing bust and global credit crisis is unfolding pretty much exactly as The Capital Multiplier newsletter predicted! Prudent investors who are fed up of seeing bogus low inflation statistics and disgusted with Fed attempts at bailing out irresponsible banks and borrowers, should visit www.CapitalMultiplier.com and sign up for a weekly newsletter to get invaluable insights that you won't find anywhere else!

Comparing 2008 inflation to1979 inflation looks great until you remember they changed the method in haw they calculate it. In fact I believe they (Fed) have changed it twice. I'm sure you have forgotten this minor tidbit.
3% per annum? We've had 3% in the last month or two using the 1979 method...

cs-bunny, The holocaust happened because german jews were more sympathic to russian communists than they were to the german nationalist movement??? I thought it was caused by idiotic, bigoted jerks such as yourself, who want to blame other people for their own misfortunes and shortcomings. Remember, not only Jews were killed during the holocaust, Gypsies, homosexuals, Priests and ministers, Mentally handicapped, political opposition to the Nazis.

A week or so ago one of the major news shows on tv had an oil representative on and he said that they had discovered a large oil field under the largest lake in North Dakota. He also said this field was larger than all the oil in the Middle East I think he said over 300 billion barrels. Has any one else heard about this?

Don't worry about the economy,McCain has a plan. Cut taxs to pay for the war,send Gov. Contracts to France.If the Oilphant candidate has his way .Kiss the Dollar good by.Card Max,s Out

If US has a PRESIDENT of this magnitude appeals WOW !!!!!!really AMAZING real Talented never in AMERICAN history before,Im really PROUD to be American Again,,he's Zionist, Muslim, Christian, Black, White,Buddist,Hindu,Bengali,African,Red-Indian,Chinese,Japanese,Hawaiian,..........WOW this all are an ASSETS smart Americans can be proud of,only the FOOL and STUPID can treats this as LIABILITY that look exactly like themselves.

Agree with cs_bunny, but Anglo-Americans participate in this international criminal conspiracy.

Wandering Anglo-Americans and Jewish Americans are a threat to world security since the early 20th century.

c_5 bunny what's wrong with you? Its people like you that make me not want to question why affirmitive action is still around!! Absolutely everything you stated makes absolutely no sense what so ever. It sounds like you copied your comments straight from some Natzi web site. I even doubt that you know or have ever talked to any jewish people!! I also think you need to get your racist facts straight! Oh and if your wondering..?? I am a black man!!! So go ahead and get your facts straight ....Natzi!

In 1997, some very intelligent scientists who had dedicated years to studying their craft in a precise and repeatable fashion predicted that oil prices would start to jump around 2005, and by around 2010-2015, demand would outpace supply and there would oil shortages. Scientists also predicted the effect of this phenomenon on the price of food, consumer goods, etc. MBA's and writers for oil industry trade journals, with no knowledge of math or science, pooh-poohed this so called "Peak Oil" concept. Then, in 2004, oil prices started to rise and have not quit since, despite the quarterly optimism of economists (again, not trained in science) who repeatedly state that things will level out next quarter once the laws of supply and demand take over. At this point, four years in, the only predictions that have proven accurate have been the ones that said over a decade ago that things would just keep getting worse unless we found another cheap way to transport people and cargo. Are we going to keep believing the economists and journalists who insist that we're about to turn the corner, or are we finally going to accept that maybe the experts really are experts and start preparing for a gas shortage and even bigger economic downturn in the next few years?

William Howard Taft, the incumbent, won only 23% of the popular vote in 1912