On Oct 25, 1:57 pm, " wrote:
On Oct 25, 2:36 pm, Too_Many_Tools wrote:

I would tend to disagree.

Where will the money come from to fuel this economic activity?

One possibility is that people will collect insurance. Another is
that faced with loss of property, more wifes will go to work.

Credit has all but dried up.

As far as I can tell credit has not dried up. I keep getting
applications for credit cards, and the advertisements on TV still say
borrow money from DiTech. The fed lowered the discount rate recently,
so more money is available.

The people who have lost their homes and businesses do not have the
cash sitting in the bank.

The banks will not loan them money without state and federal
guarantees.

Did they have state or federal guarantees in order to borrow the money
to buy the houses before? What has changed to make federal or state
guarantees necessary now? Would a bank not loan money to someone
with a job and land to build on?
Do banks no longer require insurance on houses that they loan money
on?

The housing report just yesterday noted a drop of 8%.

You don't build more product in a market that has an excess...unless
you want to lose money...and the banks have been dealt massive losses
already with the majority yet to come.

If there was an excess of houses on the market, then this will help
eliminate the excess and therefore stimulate the economy.



It was also just recently reported that the size of loans needed to
finance this activity has essentially ceased.

I think the troubles of our neighbors here in California have just
begun.

And let us not forget that the rebuilding in New Orleans is years
behind....because the promised Federal aid has not happened.

Why should California be any different?

As for a recession....better do some homework, one is coming just in
time for the 2008 election year.

Lets see, the stock market is near all time highs, the unemployment
rate is fairly low. Nope, I see a recession a bit further in the
future even though we have had a long ride in the present boom. A
recent editorial in the WSJ predicted a recession if the Democrats
pass large increases in taxes. But Charles Rangel seems to be smarter
than that.

Dan



And that was before this disaster in California.

TMT- Hide quoted text -

- Show quoted text -

Not to be insulting but you obviously need to do some homework.

Walk into your bank and ask the loan officer for a 500K loan.

You won't get it.

The people who just lost their homes will need this kind of money.

Their asset just burned to the ground.

Insurance money...IF it is paid out...will not cover rebuilding.

Companies are already trying to weasle out of paying....it was an act
of God.

Meanwhile the bank still wants their mortgage payment by the end of
the month.

TMT

TMT