Chairman says

quote:

"The possibility of higher energy prices, tighter credit conditions, and a still-deeper contraction in housing markets all represent significant downside risks to the outlook for growth," Bernanke said in a speech to the Senate Banking Committee this morning. "At the same time, upside risks to the inflation outlook have intensified lately."

Inflation "seems likely to move temporarily higher in the near term," Bernanke said.

Bernanke also highlighted the problems in the financial markets, which he said remain under "considerable stress."

"Helping the financial markets to return to more normal functioning will continue to be a top priority of the Federal Reserve," Bernanke said.

Translation: It's bad and going get worse. No matter what decision we make, it will have a significant effect on the economy.

Anyone with their heads still stuck in the sand better listen up closely. Feds are expecting up to 150 banks to close down, either branches or the whole thing, over the next 18 months. Indy Mac, gone. Freddie and Fannie Mae's future is uncertain. These are major players.

http://finance.yahoo.com/banking-budgeting/article/1053...More-Banks-Will-Fail


I knew the economy was in trouble back when the gov announced those tax rebates. I started paying down all my debt and seriously cutting back on frivolous stuff. Ride a bike to beat gas prices. This is in the event that my job suffers. The corporation I work for(a major one at that) will be announcing some major changes, downsizing, closing down, selling off. This is not only going to effect my job, but the prices you all pay for groceries. Shop now, is all I can say.

And we haven't even begun to hear the fat lady sing. I don't even think she's warming up yet.

Oil is part of the problem, but it's not the reason for the fall of the Real Estate market. Yes, it's adding fuel to the fire (no pun intended) Yes, it's going to cause some more families to face foreclosure as they struggle to pay their heating bills. But it's not our only problem. I don't know if we will ever wise up and find a more stable and cost effective widely available source of fuel. We've been banging our heads against the wall since the 70's and it hasn't gotten us nowhere.

quote:

Originally posted by DS-3-Fan:
Again...its all about OIL....We've got to get off it.

That is the silliest comment I've ever read. "Get off" oil? For many, many aspects of our lives, there is NO substitute....period. Forget the obvious lack of alternative fuels, almost everything you use, touch, eat, or drink has a petro component.

quote:

Originally posted by DS-3-Fan:
Again...its all about OIL....We've got to get off it.

Huh? Are you implying that oil caused the housing crisis? Actually oil is the effect of the problem due to a weak dollar and increase global demand. Nevertheless, as long as the USD further plummets, be prepared for inflation.

quote:

Originally posted by applejam:
Huh? Are you implying that oil caused the housing crisis? Actually oil is the effect of the problem due to a weak dollar and increase global demand. Nevertheless, as long as the USD further plummets, be prepared for inflation.

Ya, I didn't realize that it was Oil that caused so many people to take out risky loans and then when their loan payments doubled they ended up in foreclosures. Oil that caused the housing market bubble to burst?

Granted that the high price of oil is not helping things, but it didn't cause the bubble burst.

I just hope more people wake up, get out of debt, and save as much as they can.
Lawmakers and regulators are not telling the whole truth about how bad it's going to get.

You really want a wake up call?

How on earth can Sen. Chris Dodd on one Sunday morning talk show say Fannie and Freddie are 'bascially sound" -- yet within hours the Treasury is saying well, we have a plan to help Fannie and Freddie IF THEY NEED IT.

Yeah right.

Do you know how much of the US debt the Chinese and Saudis own? It's scary.
Why on earth do potential foes OWN our debt?

An economist on Charlie Rose (great show you must watch) said that within in the next year he expects one of the Big Three automakers won't be around.

Also, just the Indy Mac Bank takeover accounts for 25 percent of the FDIC's reserves. And that's only ONE bank.

The Feds will only save banks that are seen as 'too big to fail.' Well, there are a lot of regional banks that may not be seen in that light...what happens to them? The Fed CAN"T save every bank.

We can NOT count on gov't to help us...two words: Hurricane Katrina.

(Even with all this, it doesn't mean I don't buy things I don't need. But I'm sure trying to cut back, and build my savings)

Well said.

It's important all the time to save money. But when economic times are tough, it's even more important to put money away. Layoffs are looming over alot of companies heads. You may never know when it's your turn on the chopping block. You need something to live off of if you do get layed off. Finding another job will not be easy, as there will be much compitition. More people, less jobs available.

I don't even think we have even begun to see the tip of the iceburg yet. Hopefully I'm wrong, but we need to prepare ourselves for a long term recession and/or depression.

The only way to truly "save" money is to get OUT OF DEBT. Money you don't pay others is money you pay yourself.

quote:

Originally posted by HomeDude:
The only way to truly "save" money is to get OUT OF DEBT. Money you don't pay others is money you pay yourself.

So true. We just bought a new used car and we are paying it off in 4 months, so we can get back to no debt...as we continue to save for a house. My 7 yr old daughter is a better saver than most, whenever she gets her stash of cash to $20 she makes a deposit to savings. Kids will learn from their parent's example.

I saw an article that the Sears Tower and the Empire State Bulding were bought by THe country of Dubai. I also received an email that China owns over half of the Freddie Mac/ Fannie Mae Loans. I don't know how true that is...
Homedude, do you have any insight on this?(THis is a siren too, you have a PM from me, just in case you did not notice )

This message has been edited. Last edited by: delta blues,

I don't recall about Sears or ESB, but this month, Abu Dhabi bought the Chrysler Bldg.

China owns a big chunk of our credit paper, but their biggest concern is the high value of the Yuan vs the Dollar and an 18% inflation rate.

Hopefully, the Feds will start raising rates to stabilize our dollar and curb our inflation. It's a tricky balancing act between recession/inflation, but at the moment both take a back seat to the critical situation with our financial institutions.

The next step is raising the interest rates. I agree that it is a balacing act. Of course, I hope we can buy a house before the rates go up, or we might be looking for a private investor to borrow from.

I have to say that I am probably wrong about the names of the buildings, I do remember 2 being mentioned, but cannot be confident on which skyscrapers were mentioned.(DUH!)

Call me a xenophobe -- but I just don't think it's SMART to let foreign countries own certain American things -- like our debt and certain landmarks, etc., or make our defense equipment.

Let's not get into how much of Hawaii the Japanese own.

(I know, I Know. We strong-armed it from the Hawaiians. Not to mention what Europeans took from Nat. Amer's) (I'm trying not to use trihgur words)

Previous takeovers have been by wehpons and force. In the future it will just be calling in a note that's due)

You tell me who is out-foxing who. Other countries are buying our debt, we're going INTO debt to give them more to buy.

You can call me a xenophobe too.

We (well, most of us), try to teach our children that they need to be self sufficient and provide for themselves and their families and not rely on help from others to just scrape by. I think it's time for the gov to start taking lessons from us parents. And like us hard working families, the gov needs to learn how to cut out the fat in their budgets. They always seem to cut out the important stuff like education, but spend tons of money trying to prove some baseball player is lying about ster iod use. Seriously, that should be the Baseball Commission that should be taking up that fight, not Cong ress.