Much of the confidence in the U.S. economy has plummeted to its lowest levels since October 1992, which is coupled with the expected continuation of the housing market downturn. But what can one expect in the near future?
Statistically speaking, the USA's economic outlook is at its lowest since Bush Sr. was about to leave office in '92. And of course, the catalyst of this has been the
tumbling housing market.
With Americans losing sleep over rising inflation and tight credit, the housing market is unlikely to rebound soon, spelling more pain for the economy.
"The consumer has no more money to spend," said Dan Alpert, managing director at the investment bank Westwood Capital. "The only way the economy is not going to recede is if someone cooks the books."
Consumer sentiment fell to its lowest level since October 1992 when the economy was coming out of a recession, the New York-based Conference Board said Tuesday. Economists monitor sentiment because consumer spending accounts for more than two-thirds of the nation's economic activity.
There's no doubt about it, the US could be facing a major crisis. With the housing market so poor, and rising food & gas prices, many Americans simply don't have the money to do anything except survive. In the recent past, their homes were the largest asset they had; but that is no longer the case. In fact, for many unfortunate American homeowners, they'll end up paying into a house they won't even own - regardless of if they sell it or keep it.
While the index is still up 60 percent from 2000, millions of homeowners who bought in the past four years with little or no money down now owe more than their homes are worth.
While this kind of housing market plummet will undoubtedly come to an end at some point, I believe a lot of it is tied together with gas prices (which has basically affected every other aspect of the economy), as well as food. With utilities and the essentials so expensive, and the American economy suffering so much, it certainly seems that the recession will only stand to get worse over the next year (or more), until one of the multitude of utility issues begins to see some light. While food actually has the opportunity to come to a quick resolution (as long as it's managed properly), gas will ultimately still control the majority of the economic decisions in the short term. And in that time, the housing market will suffer the most of all.
And that's bad for all citizens, homeowners or not.
