Economic disaster?

[djmcmath]

In a recent thread, another Pelican said that he was cutting back in anticipation of a pending economic disaster.

A lot of people have been suggesting something bad will happen, but the predictions are generally vague, dour, and a little amorphous. Everyone seems to think that the current credit crunch housing crisis mortgage meltdown thing is liable to be a trigger, and that the oil speculation isn't helping any ... but what?

So here's the place for your predictions about a falling sky. Will the high price of oil shut down the US economy? Will the real estate market crash -- substantially more than it already has? Will the bursting of the oil speculation bubble trigger a crash? Will a major bank go bankrupt, causing a domino effect?


I'm interested in any of the predictions, especially if you can back up a prediction with some data.

Let the fun begin,
Dan

[Porsche-O-Phile]

The RE market will crash. We will see the collapse of at least one major lender (Citigroup, Wells Fargo, Washington Mutual, etc.) before this is over.

Fuel rationing is a possibility. I see at least one refiner going under soon - at a time when we need more (not less) refining capacity.

Collapse of local and even a few state governments (bankruptcy).

America has been "brains off" for the last 10-or-so years with regards to our situation. Everyone just kept pretending that endless real estate appreciation was the answer to all the world's problems and engaged in all manner of stupid and unsustainable choices. Now the consequences are starting to come home to roost, and it ain't gonna' be pretty.

I say the problems lurking under the surface of our economy are so bad there's a 30%-40% chance this could get as bad or worse than 1929. More likely it will be a very long, drawn-out, painful recession/stagflation period similar to what Japan went through. It will last decades.

[MRM]

I have all the money I can put together in cash because as soon as people figure out the end isn't near the stock market is going to take off and I can start putting my money back to work. Citibank is at the top of my list. It was as low as 18 something a couple of weeks ago and I should have bought, but I figured another shoe would drop. It promptly went back up to 22-23 and has been in the 22 range ever since. I figure this will be a long hot summer, gas prices will drive everything down, and by fall the market will be poised for a roaring recovery.

[speeder]

I'm not enough of an expert to make accurate predictions, but I do know that the U.S. economy is based on rampant consumerism. When that screeches to a halt, we're hosed. At least for a while. Our lifestyle is one of luxury compared to most of the rest of the world, even for the middle class, where we raid Best Buy and the Harley dealer for fun schit that we don't really need. When $$ and/or credit gets tight, all of those businesses and their shareholders will be hurting.

We are in a bad spot right now. We've been conditioned as a people, (maybe spoiled), for the last ~60 years w/ mostly prosperity and growth. It really accelerated in the 10 years between 1995 and 2005 w/ the stock market and RE+ dirt-cheap energy. Any prosperity and growth in real income for average Americans will be a relative thing, not comparable to the way we have been living, IMO.

[speeder]

I'm not enough of an expert to make accurate predictions, but I do know that the U.S. economy is based on rampant consumerism. When that screeches to a halt, we're hosed. At least for a while. Our lifestyle is one of luxury compared to most of the rest of the world, even for the middle class, where we raid Best Buy and the Harley dealer for fun schit that we don't really need. When $$ and/or credit gets tight, all of those businesses and their shareholders will be hurting.

We are in a bad spot right now. We've been conditioned as a people, (maybe spoiled), for the last ~60 years w/ mostly prosperity and growth. It really accelerated in the 10 years between 1995 and 2005 w/ the stock market and RE+ dirt-cheap energy. Any prosperity and growth in real income for average Americans will be a relative thing, not comparable to the way we have been living, IMO.