Technology, Auto, Housing – what’s next going to get depressed?
Marla Guthrie
Nov. 25, 2006

It started in year 2000. The technology sector boomed from 1994-2000. Then the bubble did burst. The software programmers who were making in excess of $100,000 saw their jobs shipped to India. The programmers in 2001-2003 had hard time finding any decent jobs. Low quality software development at very low price was the choice of corporations. The bust was so severe that the technology sector is steal reeling from the effect.

Then after the nine-eleven terror attack, the auto sector boomed as they started providing zero percent interest rates. The craze of owning or leasing costly vehicles spread like fire. The craze was so heavy that the car sales persons did not care to return phone calls. Finally the bubble burst again. The auto sector now is contributing to negative real growth. It is expected that GM, Ford and Chrysler has a lot more trouble in the next several years if not decades.

Then came the biggest bubble in the history of the world. The residential real estate bubble is bigger than anything anyone ever saw since the bubbles of Roman Empire. Common people owned seven or eight condos with a hope to ‘flip’ and make hundreds of thousands of dollars. Some did very well. Unfortunately 99.99% got caught finally in their own game. They took all their profit and bought even costlier ocean front properties with a hope to make big bucks. The so-called “I will teach you how I made millions in real estate with zero down” fiascos attracted more common people into the housing game. Brokers made millions. Becoming a real estate sales agent became a status symbol. They finally the bubble (huge!) burst. The real estate market now is reeling from the excess pricing. The new homebuilders are stuck with inventory like never before. The unsold old homes inventory is highest since 1951! Soon it will the levels of 1932.

The biggest question is what is next? Any thing that will get depressed normally requires a bubble to burst. If you can recognize bubbles, you know it will burst. When it bursts, the gloom is pathetic.

The first in the list is the financial services. The financial services sector paid the highest bonus this year. Wall Street bonuses averaged 178,000 in 2006 – unprecedented! Tens of thousands made easily tens of millions and more! The mortgage brokers saw their best days evaporate with hosing market collapse. But refinancing is still on. The financial services market is ready for collapse like never before. There are more than eighty percent chance that you will trade stocks, bonds and commodities free of commission in the next two to three years as financial services sector together with banks collapse.

Technology, Auto, Housing – what’s next going to get depressed?
Marla Guthrie
Any thing that will get depressed normally requires a bubble to burst. If you can recognize bubbles, you know they will burst. When bubbles burst, the gloom is pathetic.
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A decline in same-store sales in WalMart for November result of stagflation and underemployment – effect on Dow?
Fred Day
The fall in sales is in parallel to drop in gas prices at the gas stations. That did not happen before. The economy is finally telling – it is tired of stagflation and underemployment.
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