McCain said, “Some of the jobs that have left the state of Michigan are not coming back” and Mitt Romney said, “I will never accept defeat for any industry in America” – McCain told the truth, but lost, while Romney sold hope in the idea that he could do something about the lose jobs in the auto industry which have pushed the unemployment rate to 7.4 percent in Michigan.
Reference Article: McCain’s toxic truth
The leading economists from the largest banks in the world along with the leading investment firms and the Fed are speculating that the economy with skirt a recession as housing picks up in the second half of 2008. They are selling the America public and the world a lie. The housing market is yet to show any signs of a turnaround and the last nation to have a housing collapse of anything close to this magnitude was Japan. Japans' recession lasted 10 years and housing prices collapsed 70% before the dust settled. The house prices in America have only dropped 5-10% over the last 18 months. We just may have another 30-40% to go – especially if the dollar continues to fall to the point where foreign nations loose faith in the US bond market. If foreign nations stop buying US bonds, then long term interest rates will rise. This will increase mortgage interest rates and cause house prices to continue to drop in order to keep monthly mortgage payments affordable. This is the most likely scenario over the next few years.
No one likes to be told they are broke, but America is just that. Psychologist tells us that when faced with a tragedy, the first human response is denial. Denial is everywhere. It will probably take another 2 years before everyone moves past denial to acceptance. At that point, we as a nation can begin dealing with the issues, but we will be much worse off. The sooner we acknowledge that we are in a recession the better, because the sooner we start making the hard decisions – that are inevitable – the better.