Consumer confidence soars!

Again, where the bears at?
Explain how consumer confidence be this high while the economy is in the toilet?

More signs of a bottom...

Look a the savings rate of our beloved U.S. consumers.

http://www.bea.gov/briefrm/saving.htm

Woah! Highest in a decade. Very healthy.

sure..its a possible sign of a bottom in the economy. also needs to be taken along with every other indicator which may disagree. as far as real estate is concerned, the case shiller has clearly indicated that the bottom is not in for RE.

some add'l detail from the release:

"Consumers' overall assessment of current-day conditions improved again. Those claiming business conditions are "good" increased to 8.7 percent from 7.9 percent. However, those claiming conditions are "bad" increased to 45.3 percent from 44.9 percent. Consumers' appraisal of the job market was also more favorable. Those claiming jobs are "hard to get" decreased to 44.7 percent from 46.6 percent in April. Those saying jobs are "plentiful" edged up to 5.7 percent from 4.9 percent."

wow...that is sure a sign of better times!

consumer confidence could be so high because the cnbc's of the world are telling people that we could be near a bottom and they believe it and then case-shiller comes out and tells us it was all B.S.

good went from 7.9% to 8.7%! yeah, that's a 10% increase but bad is at 45% or 5 times as many.

Sometimes polls capture the story people choose to verbalize, rather than what they really feel. Behavior is a better indicator of what's really happening.

The suddenly higher savings rate, while a good thing in general no matter what year it is, is an expression of extremely *low* confidence in the economy and the job market. Besides fear, it also portends tight-fistedness that will hinder recovery in our consumer economy.

all part of the natural order of the markets at work! if your so confident, go buy a house and stocks.

Alanhart,
What proceeded the higher savings from 2000-2004?

If my rent has dropped 20% from last year, my disposable income just went up substantially because my cost of living (housing) is down. Is that inflationary or deflationary?
example...If my monthly rent in Manhattan is 3,400 and i can sign a new lease for 2,800 which is a saving of 600 dollars a month in my pocket. Now multiply this by 100,000-200,000 units....

the savings rate is also a pure sign that we are in the process of repairing consumer balance sheets after more than a decade of great excess

Now multiply this by 100,000-200,000 units....

I guess this would be applicable to the amount of units available due to job loss as well.

UD - would you buy stocks or a house now?

Who cares what consumer confidence numbers say? Retail numbers were still in the toilet last month. I would judge our position based on what people actually do with their money rather than how they feel about the economy.

http://www.reuters.com/article/bondsNews/idUSWAT01149620090526

Manufacturing numbers are now improving too.

We all know the rate of decline for job loses have slowed or even stalled in many areas.

there are only so many jobs you can lose before the numbers start to slow a little bit.

For those that don't know how to click on links:

MANUFACTURING SURVEY May April March
Composite index 4 -9 -20
Shipments 9 -3 -15
New Orders 10 -2 -20
Backlog Orders -3 -15 -37
Capacity Utilization 5 -13 -14
Vendor Lead Time -4 -9 -16
Number of Employees -12 -26 -28
Average Workweek 5 -7 -30
Wages 5 1 -2
Prices Paid 0.97 0.28 -0.22
Prices Received 0.65 1.01 -0.15
Finished goods
inventories 35 40 44
Raw materials
inventories 21 27 33

YES, that's a POSITIVE NUMBER WE GOT IN MAY!!!

I'm not saying housing has bottomed or that it will rocket back up. What I've been saying is, the strains that the economy and housing have experienced over the past 2-3 years are starting to lift.
For those expecting another 20-30% drop in NYC in the coming months are simply wishful thinking.

ericho75 - true but now lets use your statement in the context of 'where we came from'

my rent is $3,300 right now. my rent should go down 10% at least to 3100, or hopefully 3000 but I am not holding my breath. if I dont get that, I will get a comparable for about 3000 or so, reflecting market conditions.

Now, I paid $2800/mth for my unit NOV 2006. Then I paid $3100 for it NOV 2007. Then I paid $3300 for it NOV 2008. To be honest, this unit was going for closer to $2200-$2400 about 6-7 years ago. So rents rose about 50%, as the housing boom progressed and likely peaked in 2007 and up to mid 2008 or so.

Now, rents are down 10-15% but the same forces that did this also took stock markets down 40%, retirement accounts hurt very badly, dismantling of wall street and excess there, millions of unemployed, trillions in lost housing wealth, credit contracting to the tune of trillions, etc..the debts remain.

So, lets ask ourselves, is a 20% drop in your rent going to mean that much of a surge for your purchasing power? Deflation is he process of returning ourslves to a sense of normalcy, without the excess that caused so many problems. Its required, its healthy, it doesnt feel pity or pain, and is still occuring right now. With every report, and every sign of deflation, there will be spin that it is good, because it is. But when you look at where we came from, it gives some perspective.

so...i'm lying in the street run over by a car leaking blood everywhere...as I continue to lose blood, at some point, the actual amount of blood pouring forth is reduced simply because i have so little left. and that's good news?

Im short stocks right now, and I rent. I think there will be a great time to buy stocks for long term investing, but Im not buying now after a 38% rise.

Ericho75, what about all those people, NY and the rest of the country, that are afraid their job is going bye bye within 3, 6, 9 or 12 months? You think they are spending that extra $600?

Shut up doofus

urbandigs,

The destruction have occurred, we are past that. Didn't we go through in every recession? Back in 2000-2003, no one in the right mind would expect the biggest bubble to follow after it...but we did, didn't we? The NASD lost 80% of it's value in 2 years, but this world simply stop spinning? NO, because the number of people entering into urban areas around the world continue to increase. Emerging markets are here to stay my friend.

Columbiacounty,
If you actually did get run over by a car and bleeding, how do you know you have little left? How does any know? As long as you see the rate of outflow have slowed, your spirit will be up...it's call the placebo effect. Your chances of surviving just increased.

i am so f'ng tired of people putting up numbers out of context. ericho gives us the numbers from the Richmond Fed for manufacturing. are those numbers meaningless, of course not. but to not indicate that, and to just present it as proof manufacturing is doing better, is a pile of shit.

ericho, in case you can't read, the durable goods orders for the vast majority of the manufacturing surveys was way down.

columbia - I used a different analagy in a discussion with Jeff last week. The economy is a person that is getting mugged and stabbed.

The economy was getting stabbed 10 times an hour for 5 hours. Wounds everywhere. Then the mugger slowed down and stabbed the economy 4 times every hour. Isn't this positive news, a slowdown in the stabbings?

The economy should be able to get up and run around now! Forget all the damage done and the fact that he is still being stabbed, albeit at a slower pace. Normal recessions dont experience what we are experiencing. This is not a normal recession, yet the hope and confidence (ironically surging right after a HUGE stock market rally of 40% in 11 weeks - hmm, go figure) spikes occur as they should for this stage of the cycle in a normal recessions

who said the world was going to stop spinning? I certainly didnt.

ericho75 - if stocks fall 15% or more from here, confidence will fall again too. How can you build a foundation of hope on such rocky ground?

well--according to ericho above, a slowdown in stabbings will lead to an improvement in your outlook...all good...

according to me, we're both dead.

Columbia's chances of survival only increased because paramedics are pumping bags of extra blood into his body. He might survive, but he's still going to be in the ICU for a while.

Upperwesrenter,
You're a complete moron.
Before you start calling me names, look at all these indicators i've posted over the past week.
Commomdity prices are up. Look at the consumer confidence number...look at the retail numbers...look at the manufacturing number. Now if you can't argue with those numbers and give me a good reason why all of them are off their lows and trending UP, then you shut the hell up doofus.

he builds his foundation on air, one dubious piece of information at a time. his manufacturing info was from RICHMOND, not national.

"Im short stocks right now, and I rent. I think there will be a great time to buy stocks for long term investing, but Im not buying now after a 38% rise."

Perfect example why so many here will miss the housing bottom too.

ericho, which retail numbers would you be talking about? and do recall that Redbook/Goldman numbers have been inaccurately positive for weeks.

Let me understand this: are we all being serious now? I can't imagine we are.
How much blood do I have left after being stabbed over and over? Christ almighty, the point is you've been stabbed over and over, and what you REALLY don't know is whether the stabbings will continue at the same rate, correct? I mean, forget the loss of blood, but you're expecting the stabbings to continue, so even if they were to slow down, what's to say they won't speed up (or continue to slow down, I admit.)
But the human being is going to expect the worst and prepare for it, so any wounded animal...
Did I miss the biology lesson where wounded animals think rationally, or at all for that part.

That is the biggest doofus comment ever...along with throwing numbers out there with no context (and there are so many different ones to pick and choose from, one does just that...pick and choose.)

How about this, "We see no evidence that a recovery in home prices has begun,” David Blitzer, chairman of the index committee at S&P, said in a statement."
If i posted that and said, proof, you would call me a doofus, as I am calling you.

Aboutready,

How are they meaningless? So, they are useful when it's down but when it trend against you, it's meaningless. Goes to show you how bias so many of you are.

Do you need me to chart it for you?

For those that can't read or click on links.

The Richmond Fed for manufacturing numbers....

"Index values greater than zero suggest expansion, while
values less than zero indicate contraction."

March -20
April -9
MAY 4!!!!! POSITIVE!!!

"But fewer intended to buy homes -- only 2.3 percent, a tough break for one of the hardest hit sectors in the country's economic crisis."

The rising tide is not lifting the housing boat.

housing is local ericho. very local. I actually think putting money to work in areas down 50% where deals are happening at 35-40 cents on the dollar is a great investment right now. some markets and fundamentals would have to at least have some foundation there, as opposed to a local market that is seeing 20% unemployment.

Richmond Fed comprises of..

"The Richmond Fed manufacturing index covers activity in the
fifth Federal Reserve District, which includes the District of
Columbia, Maryland, Virginia, North Carolina, South Carolina
and most of West Virginia."

i didn't say they were meaningless. i said you presented them without identifying them for what they were. do you think the richmond numbers have greater impact than the ISM or Philly Fed numbers? If you wanted something decent to tout, you should have used the Empire State Survey, but why I should do your work for you is beyond me.

and have you done the math problem?

I want to comment on the change in sentiment. After months of a 'financial nuclear winter' which brought us to the brink of economic chaos life and nerves are begining to thaw. There is some amount of pent up demand. Think of it as one boat towing another where the economic sentiment is the tow rope. First there is the strong pull of the lead boat followed up by a great slacking of te rope, followed up by the slack being taken up again for the next pull. This up tick is the 'slack' coming out of the demand. So this is a the big pull.
Guess what follows...

ericho, how about you are looking at the numbers in a vacuum. Compare to a year ago, 3 years ago, 5 years ago.
It's ridiculous to look right now and stamp your foot and say, it's trending up! (and then whisper, "over the last two months...)

Ridiculous

Upperwestrenter,

Are you serious? Stabbing to continue? Talking about being a doofus with no context behind it.

So 2.3% of consumers want to buy a house, will put down deposit, and 60% of them will later walk away from their contract...

falco, you are correct. we're an optimistic bunch, generally. and it's hard not to feel the pull of optimism when spring is upon us and so is the stock market.

Like the stock market back in March when it made it's low, if you were to look at hard data along you wouldn't have seen this coming. But if you look at other indicators, there were clear signs of a bottom.

I guess most of you missed the train. And i'll think most of you will too on housing.

ericho75, if this were the Great Depression of the 20th century, what year would it be? What follows?

ericho-the media pile on every green shoot as signs of a bottom. that indicates to me we are not there yet. they have to be positive, lest their ratings suffer. i think we are in a viscious bear market rally. it is has stalled here and today's confidence number is reversing some of the recent losses. you seem to married to your bullish bias as some are too married to their bearish bias. strong feelings either way are very dangerous. they blind you to what is right in front of your face. my own opinion-this rally will stall out and market will eventually roll over but i am playing the long side until it does. when does this happen? i have no idea but a summer swoon is likely.

Great depression?
Are you focking kidding me?

Did you see what happened to commodity prices back during the great depression?
Check out raw material and all commodity prices today.

i won't, since i don't intend to buy. but your argument has zero merit until you can show the incomes available to support even current prices, both rentals and sales. did you know that less than 20% of this year's college graduates have found employment? and large numbers of those won't even be included in the unemployment rates. what do you think it does for household creation rates when the kids have to go back home to live with mom and dad?

I don't follow commodities markets. How would you characterize today's raw material and commodity prices?

That's good news. Obama is doing a great job. Maybe by 2011 or 2012 the NYC housing market will begin to rebound.

have no idea of the veracity of this info but check out link below relating to commodity pricing

http://www.321gold.com/editorials/saville/saville110408.html

ericho - I don't think that numbers can be "for you" or "against you". They are what they are. The complaint about the Richmond data is that, while it is slightly positive, it is a very small sample size and not representative of the overall manufacturing sector. It is a "piece" of the story here, but not evidence of any great turnaround in the manufacturing sector as a whole. To take that leap is ot cherry-pick data and that doesn't get anyone anywhere.

ericho, you never said anything about people's incomes and the animal instinct to hoard all the resources when fear sets in.
I'm happy you've found a couple numbers that are trending up, but when people fear for their jobs (rationally or not) you think they figure, fuck it, i'm gonna go buy some shit?

as for "the stabbing continuing" how am I wrong? Guess what you moron, it's about perception, and you digging out numbers from the internet is not the perception...but hey, keep reaching for it jackass

has anyone else noticed how relatively quiet these boards have been? granted it was a holiday weekend but today is pretty quiet as well. also the same on other RE sites. could it be people are just giving it up for the summer? is depression setting in? i would expect the number of listings to bleed slowly lower through the summer as owners hope for an autumn rebound. spring has been clearly a bust based on year-over-year comps. but if we get a summer stock market swoon or some other unforseen bad economic news those re-freshed listings coming online in the fall may show some significant price reductions.

dufus...
moron...
jackass...
What's the threshhold of noncivility?
Disagreement?
Having opposing views is extreamly helpful in the development of thought and reason.
Thank the gadflys, dont curse them.

Cfranch, if ericho is right, we may be heading toward the indicator where no one is interested in talking about real estate any more because it is simply too depressing.

cfranch/evnyc: With very, very few closings, new listings or even price changes in the past five or six days, there just isn't much to discuss.

evnyc, that would be the bottom. or summer. i think the latter is more likely.

cfranch - i have noticed that the comps threads, favorite pricechoppers thread, undercutting neighbors thread, etc. have been slow for a couple of weeks now. There is plenty of activity on the all-news-is-positive vs. all-news-is-disastrous shouting match threads (like this one), but i think it's clear that the flow of actual market data is slowing down. Working from the unscientific sample of my saved sales, there are a fair number of spring contracts that should close and reveal prices over the next few months, but otherwise i think you are right to expect a lull, although not cessation, in activity (and therefore activity-driven price data) until the fall.

My own view is that the acute phase of price declines (20-30% or whatever in six or eight months) is probably over but that factors that influence the market still have a strong downward bias in aggregate and that there is more air to come out of the balloon in the coming quarters and likely years. To the extent we see significant price reductions in the fall, I would expect them to come principally from a larger number of sellers waking up to the new reality and pricing properties where the minority of sellers has been willing to go in recent months. That is, I would see more a more liquid market in the vicinity of current price (transaction, not asking) levels. As for another sudden and dramatic leg down, I just don't see it absent a new major shock to the markets and confidence (and perhaps not even then given government willingness to make up program after program to put a floor under asset prices). Selfishly, i'd like another leg down because I'm looking to upsize, but I think the acute phase of the adjustment is past and it's on to the slow unwinding of the remainder of the bubble in this famously illiquid asset class. That phase lacks the spectacle of the acute period and will have less entertainment value on SE (a la recent lack of comps), so having the patience to let it play out and not obsess whenever a week (or month) passes without a clear new valuation milestone on the way down will be important.

sidelinesitter, i'm not so sure about that. i've spoken to numerous friends who bought in the 2005-06 period and not a single one feels that they have lost any money, or are about to do so. I don't think these will be the people to put their homes on the market when this quarter's declines are revealed (unless they are under some distress), but i've got to wonder what the reaction will be among the baby boomers who are holding onto a fair amount of equity, particularly if we see another downturn in the stock market.

would echo that strongly...there is still a lot of denial amongst the upscale (or previously upscale). we on these forums are seeing these price changes (which are mostly listings rather than closings) much more closely (some may say obsessively!) than the majority. when the bulk of this years closings start to appear during the summer, i think the headlines will be inevitable and bring about a change in general awareness.

I also think our standards for newsworthy movement have changed. Six months ago, we posted every listing that crossed under a 2007 comp. These days, a listing almost has to drop below a 2004 same-unit sale to be worth mentioning.

ar - so your theory is what? complete gridlock since no one will sell other than perhaps due to the three D's, but then a mass stampede for the exits (to preserve what equity they can) if there is another market downturn? I just don't see it as so all-or-nothing on either side of that theory. This is why I rarely comment on the shouting match threads; there is little room in the so-called debate for shades of grey, and I think the world is a lot more complex than black and white. Especially true in the case of an illiquid asset where information is limited, lags and is unevenly distributed.

cc - guilty to SE obsession here. Next time I see the friend who turned me on to SE, I'm going to kick his bu**.

West81st - absolutely true. I consider 2007 comps spam at this point (exception: WAY below 2007 and no 2004/2005 comps exist) and wouldn't clutter up otherise valuable threads by posting them

i don't think that there is a functioning market yet. there is great disagreement (as evidenced here for one) on what prices are. the new development overhangs everything and no one has a clue where that will end up. a lot of posturing back and forth for sure but how many of these places will actually close and at what level is completely up in the air.

so, without a market, not sure how there can be a market downturn or upturn?

Consumer confidence soars? Puaahaahaaa!!! GOHWTBS please.

Meantime, housing prices plunged to a new record of almost 19%- that's some tangible numerical datapoints as opposed to "consumer confidence". Hey, look at me!! I feel confident today!!! YaY!!

Listening to this kind of "Pied Piper" nonsense is how you will all perish dear lemmings.

sidelinesitter, my theory is not a stampede nor a gridlock. it is price correction in phases, as the information flow catches up with reality. i just am not convinced that there is no possibility of another quarter of 20% declines. or, less spectacularly, two more quarters of 12% declines each. this could potential be delayed by market manipulation by the gov't, but it will be merely a delay, at least in my opinion.

cc, there is a market, we've been seeing it in action. with a market in a downturn, and the season, there will be people who are willing to buy at a new price level. and then we wait to see how others will react when they discover what the new price level is. and NYC being what it is, and the fact that NY has held itself out as something "special," will only incite those in the media to emphasize any downturn that does exist. it's functioning, but as it will given the circumstances.

but i agree with west81st, i'm feeling rather jaded at the moment. not much excitement for me right now.

MMAfia,
When consumer confidence numbers are way down you spin it like it's one of the 'magic' indicators. Now, the numbers are now falling and 'starting' to trend up you 'ignore it'. What's the difference between you and a delusional bubble feasting real estate lemming investor? Nothing...

The yields for 10 year bond market is about to bust a move. The biggest debt market (bond) is screaming out and clear. Things are not as bad as it seems.

I like upping the ante by throwing a 'jackass' or 'doofus' into the mix.
I especially like to when people seem blind, but hey, i'm probably a doofus myself

yes, there is a market in the sense of some deals are being transacted. but...i don't believe that there is a consensus to the closest 25% of what any given property is worth. i think we are fundamentally describing the same set of facts but calling them by different names. for many years, i thought that i knew within 10% what any apartment in my building (at least) was worth. at this point, i haven't a clue.

actually cfranch, the boards are quiet because rufus got booted. Plus stevejhx has been MIA for a few days. When he returns, I guarantee you will see more activity.

"The yields for 10 year bond market is about to bust a move. The biggest debt market (bond) is screaming out and clear. Things are not as bad as it seems"

do you really think that is what the treasury move is telling you? or perhaps there are concerns about demand being there to meet huge issuance, and China's concerns about adding more dollar denominated government bonds?

sidelinesitter,

I've dealt with stocks for a number of years. Like all assets, investor sentiments are all the same.
I have listened to more people complaining about missing the last bull market (2003 to 2007) then anything else. I asked these same folks what are they doing today and they'll tell me the same thing....on the sidelines waiting for things to clear up. If only markets are so easy. Waiting for 'clear' sky....what BS.

i agree, cc, but i've had five of years to think about potential downward pressures on prices, and now i try to keep my downside predictions to myself, and just discuss trends. but did you really think you knew what any apartment was worth from 2003-07, when prices were relentlessly marching upward? i found that incredibly hard to fathom, although the time period was more extended so I guess it might have been easier to adjust. just remember, there was no consensus as to how high prices could go, as well.

alpine, you forgot 10022, and rufus showed up the other day.

Urbandigs,

Are you kidding me? China's been saying the same thing for years, see what they are actually doing and not what they are saying. China is still the biggest purchaser of our paper. They don't have a choice. If they want their economy to continue to hum along they'll need to buy our paper in exchange for us buying their goods.

http://www.treas.gov/tic/mfh.txt

oh yes, nyc10022. It's so nice here without him. Really pleasant.

China has no choice but to buy our bonds or selse the value of the bonds they currently own will plummet in value.

*or else*

remember, i'm only talking about my own building. not much science to it....take last sale adjust for obvious factors and add 10% and it was hard to be wrong by more than 10%.

Not just the 10 year note.
Why are folks piling onto junk bonds over the past 6 months? Because the risk of owning them are better than sitting on cash.

http://finance.yahoo.com/echarts?s=SHIAX#chart1:symbol=shiax;range=3m;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Just wait until GM files and the auto industry reduces GDP by 2-3% and increases unemployment by 1-2%. That'll do wonders for consumer confidence.

it's really hard to find the civility falco quite rightly encourages.

http://www.businessinsider.com/henry-blodget-why-are-long-term-interest-rates-going-up-because-investors-think-were-screwed-2009-5

ericho, i do believe that without trying to do so you've hit the nail on the head. what happens when we quit buying China's goods? or at least, much of them?

AboutReady,

Scenario number 2 is already being addressed. The US will be buying all those debt. They already have.
Scenario number 1 is what i think is happening...ala commodity prices.

"First, long-term rates are going up because traders are getting nervous about future inflation. This is sensible. Given all the money the world is printing, it is quite likely that we're eventually going to have severe inflation, which will destroy the value of savings and bonds. The question is when that will start. (Japan has been able to postpone it for 15 years and counting)."

just read your link---seems remarkably obvious, doesn't it? I'm not comfortable going out past 6 months on cd's, particularly for the princely premium of maybe 2 points. why should anyone else? seems like long term interest rates should go up based on uncertainty alone. and, as far as what happens, as we stop buying china's output? yet another example of an unprecedented situation. can they drop their prices even further? will that stimulate demand from us when we don't have any money to spend?

Key words...

"...which will destroy the value of savings (cash) and bond..."

Commodity prices all going up..
Gold 'prices' are 6% from all time highs..
USD is collapsing..
Creation of money is running at full tilt..

Good luck renewing your lease and rent for a couple of more years folks.

ericho, your belief that we can magically cover all our bases and protect the market is touching. at what cost would that occur? do you really think that trillions of crappy loans weren't written? who do you think will pay for them? is your net worth so high that you don't care if we reinflate ourselves out of this using taxpayer money, leaving 99% of americans with a reduced quality of life for the foreseeable future? Do you not care about families, and health care, and unemployment?

And, bottom line, in the long run do you think there's any way it could possibly last? you think that we will just print our way out of this, and there will be no consequences? for whom? and do you want Japan here? besides, you neglected to quote the rest of the article, which gave the big reason, that we are looking like a turd as a credit risk.

Like how we never stopped buying cars from Japan, we'll never really stop buying cheap affordable goods made in China. I've seen these arguments made back in the 90s. Consumers like you and me aren't dumb enough to buy the exact same thing for 100-200% mark up. These are the reasons why Wal-mart and costco are such success stories.

yeah, but unlike Chinese products, cars from Japan are NOT cheap. They are not a penny cheaper than a comparable American car.

what child needs six bratz dolls? have you taken a look at China's exports the last couple of months? our imports? global imports? your reasoning is incredibly superficial.

Aboutready,
Let's face it, i'm a big fan of Richard Russell and he's been saying the same thing for the last decade.

"INFLATE OR DIE"

ericho75. Not sure I get your point. If your issue is with people who can't make a decision absent perfect information, then I would agree with you that these people are going to remain spectators in real estate, because real estate information is never perfect. They'll watch it all the way down and all the way back up again, whether that cycle takes 2 years or 20, and they'll probably blog their brains out on SE the whole time. If however your issue is with people who have a view that the fundamentals have been knocked out from under New York real estate and that the market takes a lot longer than six or nine months to adjust, then I guess we just have a different view of where the real estate market is heading. That you apparently see a bounce just around the corner is naive, although I suppose understandable if your experience is limited to 'a number of years' and those years are in the stock market, which is a much more liquid asset class with much more price transparency than real estate.

we will inflate, eventually. but that won't be a sign of economic health.

wait a second, you're saying car imports from Japan hasn't dropped?
And do you know Costco's price margins? How many can operate there? Do you know how their wine business has been hit in the last year? How about their overall business?

And by saying, "we'll never really stop buying cheap afforable goods made in China" what time period are we talking about? 5 years, 20 years?
I'll guarantee right now that the sale of cheap goods made in China or anywhere else is going to shrink, as people continue to default on their credit cards and can't buy that stuff.

If it gets down to food or cheap goods, what will someone pick? It's like saying because McDonalds has done well with their dollar menu, Wal-Mart will do well with $25 DVD players.
A chicken sandwich is different than a dvd player.

Alpine292,
They were considered cheaper replacements for American Cars in the 70s and 80s. Over time, their products became 'better'.

have you noticed that we've stopped buying cars? along with everything else?

how can inflation work if wages don't go up? suddenly a fixed income with COLA adjustments will look good?

ericho, will car sales go back up to their 2006 levels?
If so, I suggest you apply for a job at GM...they need you!!

i was in wal-mart the other day. all the aisle inventory is gone. much of the shelves have been removed, making it spacious but not filled abundantly. the food area had seen cutbacks in brands carried, and even fresh food was sparsely presented.

there were three checkout counters open, at 7:00 p.m. on a Saturday night. Not high time, so we went back to check it out on a Sunday at 2:00. Same thing, and parking available everywhere.

On the Saturday night in the checkout line a young man ahead of us with his daughter. He gave his wal-mart credit card. It was swiped. The cashier said I'm sorry it's been cancelled. He said I wonder why? She pointed to the customer service line, some 8 people long, and said maybe they can help you. He looked unhappy and paid cash.

I'm not making this shit up.