The Economy and Hobbying second half 2010

[bigbobftworth]

I have been reviewing the latest bit of financial information and how this will affect the hobby for 2010. I regret that the economy will get far worse in 2010. Theres a good and bad side for providers and hobbyist.

The weakening economy will force more "civilians" to become providers. Jobs are still scarce, and we all must find a way to survive. More providers mean more competition and the fees will become more competitive.

The weakening economy will also take many hobbyist out of the game for a period of time. With hobbyist having less disposable income, the providers will have less business and again this will be difficult for many ladies to make up the difference in their income.

I supply the following information on the state of the economy:

1. The number of banks closing is greater than last year. 775 Banks are on the FDIC list as "problem" institutions.

2. Foreclosures are going to be greater than the past two years. Banks and other lending institutions cannot keep up with the amount of homes being foreclosed. Real Estate values will continue to drop, and this will lessen tax revenues for states and cities. Less tax base means that taxing authorities will be forced to raise the rates taking even more money out of the economy.

3. Retail groups and restaurants have not recovered and there will be even more stores and restaurants to close. This will create more unemployment and again cause tax shortfals for the taxing authorities, see number 2 above. With greater unemployment many manufacturing groups will also have to lay off employees and this will cause unemployment to rise.

4. Unemployment will start to grow again, there are 5 people looking for every one job available. This fact will allow employers to lower their payrolls as people are willing to take less and less money for the available jobs.

5. This information is what I find most disturbing, 65% of our nations total economy will be used to pay for the national debt and interest on that debt. This is the highest number since world war 2.

Conclusion is that our economy is one big shit sandwhich and we will all have to take a bite of it.

So hobby on, with limited funds but more ladies to choose from.

[Mr No Confidence]

Doesn't all this information makes you all warm and fuzzy inside!

[dallasrgb]

Bernanke was just telling Congress how the economy isn't really recovering, but we're not going into a "double dip" recession. Thanks, Helicopter Ben, for the update. The Fed is the most optimistic institution on the planet because they're so damn arrogant that they think that they can fix anything, yet they don't seem to think that they have anything other than more regulation to offer us. We're totally screwed if the Fed isn't optimistic.

Originally Posted by bigbobftworth

65% of our nations total economy will be used to pay for the national debt and interest on that debt. This is the highest number since world war 2.

That would mean that it takes 9.5 trillion Federal Reserve Notes to pay for the national debt and interest (14.592 trillion FRNs (GDP this year)*65%=9.485 trillion FRNs). I'm not sure that's correct. The current national debt is about 13.3 trillion FRNs, well above 65% of GDP. Interest on that debt is probably going to be about 700 billion FRNs this year. twice the level of last year. I don't mean to discount the fact that our national debt is oppressive to the economy (sucks out investment capital and puts it into a government that contributes little to economic output) and will probably lead to either monetization of the debt or bankruptcy of the Federal government, but I'm not seeing your 65%.

On the up side, residential rent is WAY down this year, so incalls should be cheaper. For those who utilize commercial space, a ton of commercial properties are about to go bankrupt because of the nature of commercial loans. I'm not sure if that will mean that the remaining properties will be able to increase rent because of less supply available to the market, since most foreclosed properties are taken off the market for renters or not.

When it comes down to it, we're all fucked, whether by more providers or the Fed and federal government.

[yaddayadda]

Also next year about 1.5 Trillion in Variable Rate Mortgages come due, almost all of the loans are "under water", estimated 90% will be foreclosed.
Also if Tom Hicks can't get his commercial property refinanced then NOBODY can.

My prediction, Depression in 2011, 20-25% unemployment.