15 replies to this topic

[OEXCHAOS]

I spoke with an Ohio real estate attorney yesterday and I got an interesting tid bit. Obviously, things are bad and her forclosure work is testing her limits of endurance. But we knew that. The interesting thing is that only about 25% of the foreclosures are related to variable rate mortgages. The rest are due to the usual suspects, death, divorce, job loss, illness. Her read is that the northern part of Ohio has been sucking wind economically for a long time and the weakness has been masked by folks who are laid off getting lower paying work quickly, so it appears that unemployment is low, even as wages paid and incomes have fallen. She also lays partial blame at the State of Oh.'s policies toward business. Anyway, my take is that if Ohio is any measure, we probably have a slower and more fragile economy than much of the data implies and it's not nearly so much due to sub-prime, surprisingly enough. Mark

[greenie]

So are you saying there has been economic weakness for a while, and the job numbers did not reflect that? Didn't you say few weeks back that the economy is fine and bears are wrong, because there are plenty of jobs? Do you always go the way wind blows?

[HoseB]

"... if Ohio is any measure, we probably have a slower and more fragile economy than much of the data implies ..."

Some argue that we are already in recession. With GDP being stated ~4%, how can that be?

1. Let's presume the Gummint is fudging data about inflation and money supply growth...

2. The GDP is "Goods proudced - inflation".

3. To get an accurate measure of goods produced, there would have to be a tally of the number of widgets produced this year versus last year. But that's not how it works. Instead, "goods produced" is measured by $Dollar volume... and that has the inflation component* added.

4. So if number of widgets is -.1%, real inflation is actually 6% but the Gummint claims, "inflation is 2%... therefore GDP is 4%"... then we are actually already in recession (less output of widgets).

The US could very realistically be in recession right now... and almost nobody knows.

* inflation... the Gummint has concocted ways to measure inflation so they can claim it's much lower than it actually is. Both the Talking Heads and the Gummint tell us, virtually every day, "inflation is not a problem... it's ony 2%"
HOGWASH I say! It's IMPOSSIBLE for the inflation rate to be 2% while the growth if money and credit is >10%.

If you look around the web, you can find measures of world wide growth in money supply at around 12-14%. What is being ballyhooed as "greatest growth the world has ever seen" is really more about the greatest INFLATION the world has ever seen.

Edited by HoseB, 11 September 2007 - 06:59 AM.

[OEXCHAOS]

So are you saying there has been economic weakness for a while, and the job numbers did not reflect that?
Didn't you say few weeks back that the economy is fine and bears are wrong, because there are plenty of jobs? Do you always go the way wind blows?

a) yes
b) no (and I think that anyone who trades on economic projections is a fool)
c) nope. I go in the opposite direction of more emotional traders. I would think that you'd have learned that by now. Unless...

Just observations. Maybe useful, maybe not. Ohio is just one state. That said, I may have uncovered the next excuse for cutting rates, which will, of course, drive the market to new highs after we complete whatever testing we're going to, in all likelihood.

[ogm]

Ohio was in a rut forever. My wife has some family in Southern Ohio, and I' was there a couple times over the past 10 years. That Ohio/Kentuky border is an economic wasteland. It was in 2000, 2005, and it still is.

Edited by ogm, 11 September 2007 - 07:18 AM.

[OEXCHAOS]

Interestingly, OGM, we're in better shape down at this corner than most in the region. The southern part of the state is better than most of the north, too, save for Adam's county and parts of the south east. But they don't have many people, either.

But if a sleepy little river town like Covington can do something like this:





Well, something's going on. That's one place where the real estate market is firm. Turgid, in fact.


Mark

[NAV]

I woudn't use Ohio as a proxy for economic strength or weakness. I drove across the entire breadth of Indiana and Ohio in February 2007 to meet some of my friends. They looked like economic ghost towns to me. This is when the silicon valley and the rest of the world was red hot . Again, that's just anecdotal, may not be the reality. I know how a weak economy looks like and feels like. I remember in 2002, when i took my wife out for dinner on her birthday in San Francisco, we were the only couple sitting in the corner of the restaurant. It was depressing. Right now, i wait outside any restaurant i go. The economy is just fine. Will it be in the future....who knows ?

Edited by NAV, 11 September 2007 - 08:10 AM.

[MaryAM]

Mark, Ohio is bad, but take a look at Indiana. The folks there are neary in a civil war because of the property tax situation. So many foreclosures, and they just divided the taxes among those left - some tax bills went up over 100%. Looks like it may be the first state to abolish property taxes all together - which is the right thing to do across the country and have the taxes - especially that money that supports schools, which is the biggest drain on the economy, come from income based tax system. Houses don't make money - they cost money. I would not want to be an elected official anywhere in Indiana - thats Klan country and those people carry guns.
Mary Anne

I spoke with an Ohio real estate attorney yesterday and I got an interesting tid bit. Obviously, things are bad and her forclosure work is testing her limits of endurance. But we knew that.

The interesting thing is that only about 25% of the foreclosures are related to variable rate mortgages. The rest are due to the usual suspects, death, divorce, job loss, illness. Her read is that the northern part of Ohio has been sucking wind economically for a long time and the weakness has been masked by folks who are laid off getting lower paying work quickly, so it appears that unemployment is low, even as wages paid and incomes have fallen. She also lays partial blame at the State of Oh.'s policies toward business.

Anyway, my take is that if Ohio is any measure, we probably have a slower and more fragile economy than much of the data implies and it's not nearly so much due to sub-prime, surprisingly enough.

Mark

[NAV]

Even the so called economic pundits are associating financial panic with economic weakness, just like they did in 98. If someone had told me the economy was bad in 97 or 98, i would have LMAO. Those were some of the best years i have lived, despite the asian financial crises, the LTCM and what have you.

[thespookyone]

I live in Ohio, and, of course the economy is weak here. What people miss is that it is a proxy for American manufacturing jobs LOST-of which we used to have plenty. Funny things happen when $20 an hour manufacturing jobs get replaced by $8 Walmart ones(WITHOUY healthcare). Walmart, of couse now the nations largest employer.