Is Optimism That Outrageous?

No one ever said that today's liberal media wasn't nihilistic. But for them, disaster sells. However, it is a travesty that your everyday American takes the information that flows out of the media for gospel. Fair & Balanced doesn't exist. It is incumbent upon everyone to search out the facts for themselves.

Ask yourself this: If the median home price was $119,600 in 2000, what was the median income for a family of four at that time?

I think the markets have it wrong. The problem per se is not defaulting mortgages. It's the negative savings rate in this country and consumers' reliance on credit that has us in a predicament.

Artificially low interest rates inflated housing prices at the turn of this century. If the 'average' income for a family of four is $40k (or as the US Census Bureau claims, $48k in 2006) and the median housing price is $216,000, then the 'average 'family' still can't afford housing, particularly under traditional lending requirements of 10-20% down and 30yr. fixed mortgage rates.

Consumers make up 70% of US GDP. Housing prices have to come down (or incomes go up) to get consumers spending again, and yet, we have a slowing economy, higher commodity prices and a glut of housing.

If consumer spending slows, where are corporate earnings going to come from? Increased imports from a weaker dollar? Is this a good thing? Not if we at home don't increase our national savings rate and get a handle of massive deficit spending. Japan in the 1990's anyone?

Ah pessimism!
Easy isn't it?? Especially in an election year!!!
I personally find it sad that people are taking the Henny Penny outlook on life.

Here in the Pacific Northwest, Boeing (despite losing the USAF Tanker Deal??) is still hiring (at excellent wages, I might add), and it is is to be noted that close to 50% of ALL exports from the entire United States come from this one company.

Despite issues with the new processes and untried suppliers, the 787 Dreamliner has sold 892 aircraft without flying yet---and other projects are on the horizon.

I intend to purchase my first home this summer--now is the time to buy!!!

I do not imagine that all is well everywhere, however, if ANY economy has the ability to survive and rebound quickly from these issues it is ours. Look carefully at the things that the news has said in the past that should have collapsed our economy if people had listened---does anyone remember the S&L crisis???

America is NOT Japan---our businesses do not have the straight-jackets that Japanese businesses have by law and tradition. Look deeper into these issues and you will learn how we surpass our difficulties and always will.

Sleep well.

What do I think? I think it's great to find a site that isn't doing its level best to talk us into depression, finacial and mental.

I've watched as politicians, news media, liberal celebrities, and business leaders have told us how bad the economy is, watched people buy into this message and stop spending money on anything but essentials, and watched the "recession/depression" begin to become come a self-fulfilling prophecy.

Thanks for a dash of reality.

Rather than the "henny penny" way of thinking about the economy, as you refer to the so-called pessimism of the media, I prefer to call it realistic. Let's look at the worst case scenario and make sure we put measures in place to avoid that scenario, instead of comparing numbers of today to numbers in the depression. As if the climate and situations we are facing today have anything to do with the 1930's! What's truly scary is our political leaders claiming that they've got things under control, and if any economy can weather this storm, it's America. Flag waving makes people feel better, yes, but what we really need are some hard headed, sharp economists in this country putting their heads together to figure out how to get the dollar strong again and raise wages in this country. Sure, it's a good time to buy if you have money -- that is, if you can afford rising health care costs, college tuition, gas for your cars, heat for your home, and those pesky property taxes that funnily enough are NOT going down as the value of your house plummets.
Let's get real, folks, and start acting instead of wallowing in denial. Or would you prefer America becoming a third world country in need of an IMF bailout?

Teresa

The financial system in the US is broken; it needs a reset. Yet the fed, in bailing out BS, has emphatically declined to let the system heal itself. Where's the story on that?

The American taxpayers are footing the bill: yesterday JPM's market cap increased over $10B. The fed just gave JPM shareholders a nice "stimulus package." Outrageous, indeed.

Well, I figure that it's more than just pessimism in the media--it's sensationalism. CNN doesn't make money by showing you the news, they make money by showing you adds. The news just makes you watch the adds. Every news company is trying to outdo all the rest, so they make as many doom and gloom predictions as possible. Is the dollar in trouble? Yes. Is gas getting too expensive? Yes. Are we headed for an economic apocalypse? No. That just sells more papers than an honest comparison between now and the Great Depression.

The mainstream media tends to give us just a soundbite of the actual news, then the same old "experts" give us long-winded discussions of what could happen. All too often, they discuss the worst-case scenario as if it were the likely scenario. Often their dire predictions are just not repeated when they don't come to fruition (i.e. bird flu and SARS PANDEMICs!). But when it comes to our economy, overly sensational dire predictions can have a truly negative effect.

When it comes to economic news, Jane Q. Public doesn't want Pollyanna or Henny Penny, just the straight truth, rationally presented.

"The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the Second World War. The crisis will leave many casualties." - Alan Greenspan

I completely agree!

I HONESTLY THINK PEOPLE NEED TO LOOK AT THE WORLD IN A DIFFERENT LIGHT - INSTEAD OF "WHAT CAN I GET" "HOW MUCH CAN I HAVE" AND "I DESERVE MORE" AND ALL THE OTHER GREED BASED ATTITUDES PEOPLE NEED TO LOOK AT HOW CAN I SERVE - WHO CAN I HELP - WHAT CAN I DO ON AN INDIVIDUAL BASIS TO IMPROVE THE OBVIOUS PROBLEMS WE ARE ALL FACING.
READ, STUDY, LISTEN AND VOTE FROM AN INFORMED VIEWPOINT. THERE ARE SO MANY THINGS WE CAN ALL DO TO LIVE IN A BETTER WORLD. OVERALL WE NORTH AMERICANS (US AND CANADA) ARE SPOILED ROTTEN, MANY THINGS WE BELIEVE ARE RIGHTFULLY OURS AND SHOULD BE FOUGHT FOR ARE FACETS OF INDULGENT LIFESTYLES RIFE WITH WASTE. WHAT ARE WE TEACHING THE NEXT GENERATIONS.

Are any of you retired? With the Fed reducing interest rates (again today) it is getting more and more challenging to find decent investments. Muni's with any decent return are all called and CD's are going lower and lower. Thinking for the long term is one thing, but when one is trying to live on Soc. Sec. and investments in the here and now, things are definitely getting more challenging. We find that we are having to scour the market for various low to mid cap funds and precious metal funds because we are at a point in our lives where we find that the long term investment growth is not as important as the actual income from those investments. So yes, we, as retirees are definitely feeling a very real slump. Every time the Fed lowers the interest rate, we have to hitch up our belts and re-figure our budget. And I know we are not alone. There is a whole segment of the population that is really getting hurt by all this "fixing" of the economy. And the state of the health care coverage system doesn't help...

It is in my opinion all a part of greed. People who thought they could get something for nothing, people who didn't understand what they were doing and financial institutions thinking they could cash in, and pass the mortgages on. I do take some exception to some of the points you make. Bear Stearns did have a liquidity problem and institutions did take advantage of the subprime mess. People thought that the housing market would never turn down and you can look historically and find that not to be the case. I think we are all definitely in for some belt tightning.