In this episode of the McCuistion program,  Dennis McCuistion is joined by panelists:

• Stan Liebowitz, PhD., author of Anatomy of A Train Wreck & Director for the Analysis of Property Rights and Settlement
• Richard Bitner, author of Confessions of a Subprime Lender and Associate Publisher for Housing Wire Magazine
• Gerald P. O’Driscoll, Jr., Senior Fellow Cato Institute
• Ira Silver, PhD., Texas Christian University, Neeley School of Business

The 2009 economy is breaking records and not necessarily the ones we’d like it to break. As we navigate the recession, McCuistion and the program panelists discuss the extremity of the problem, the effectiveness of government policies and the future.

We are in what could be described as a post war recession.  People are feeling the crunch of increased debt, and so they are working to get out of debt. This causes a strain on the housing market and other markets that rely on acquired debt in order to stay afloat.

In September 2008 the recession officially became a serious issue.  However, on a percentage basis, the 1982 recession actually resulted in a greater job loss than what the American market has experienced thus far.  And although the stock market has had its failings, the decline may not be  as bad as some may think.   In the United States the market generally goes up each  year  and 2008 was not much different.  In 2009  growth will likely drop 1-1.5% .

Housing is one critical component of the recession, because most housing markets are imbalanced from an inventory perspective.  In order for the market to improve, there  needs to be a general belief that the market has hit rock bottom. However, as public policy  pushes towards foreclosure moratoriums, it will likely be 3-4 years before this happens.

The panelists go on to explain the meltdown of the mortgage industry and what led to the 2009 economy and what it will take to move forward. Citing moral hazards, reckless lending, investing and negative interest rates that caused the boom cycle, they  reassure viewers that pessimists are usually wrong.

Also covered during this television segment are the positive and negative sides of the Fed’s decision to expand the money supply,  changing  interest rates, and each panelist’s predictions of the 2009 economy as well projections for the future state of the economy.

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02.15.09 – 1723

The present mortgage market, which includes, experts say, $100 billion dollars in subprime lending may lead to a wide disruption of financial markets, lack of liquidity, jobs and corporate profits. In this segment, the panelists discuss how this was caused and how it will affect the average person and business owner.  The panelists include:

• Mike Davis, Professor of Economics and Finance, Southern Methodist University – Cox School of Business
• John Heasley, Executive Vice President, Texas Bankers Association
• Bob McTeer, Ph.D, Distinguished Fellow, National Center for Policy Analysis
• Dory Wiley, CPA, President, Commerce Street Capital

The housing market is in turmoil and the credit crunch has drastically effected the American economy and the overall feeling of personal financial stability. Explaining the reasons for the credit crunch, panelists cite housing interest rates, accessibility of mortgages and lack of equity, just to name a few.  The Fed has had a role in the crisis of the day, but they contend that the Fed is not the primary player in the current credit crunch.

During their discussion of who is to blame for the credit crisis, they discuss subprime lending and securitization. Subprime lending and securitization are not bad in themselves, however, in excess they became very dangerous.

In a video with Fred Foldvary, Ph.D., economist from Santa Clara University, Foldvary forecasts a depression in 2008 or by end of the decade and explains his reasons why.

The discussion concludes with the panelists discussing ways to recover and safeguard for the future.

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05.04.08 – 1703