I keep hearing people talk about the fact that we are in a recession or at least we are heading for one. However, with everything going on in the economy, I can't help but think it looks an awful lot like the late 1920s-early 1930s. We have massive unemployment, we have had at least one run on a bank (is there more to come?) While everyone is talking about recession (except Dubya of course-he thinks the economy is just peachy keen), I can't help wonder if we are in fact heading towards a depression. I have not heard anyone mention the "D" word so I keep wondering if it is just me. Does anyone else see it or is it in fact, just me?



Cat

We've been suckered by those who would have us believe that the optimum design for an economy is individual greed.  The Cato Institute, the Heritage Foundation, the Competitive Enterprise Institute, and other doojbag rightwing thinktanks have kept the voodoo economics rolling as long as possible with their inane propaganda. 

Now it's time to pay the piper.  Who's gonna pay?  We are, not the billionaire kleptocrats. 

They're going to print up 12 trillion dollars in funny money to bail out Fanny and Freddie.  That will rev up hyper-stagflation like we've never seen. 
::)

I keep hearing people talk about the fact that we are in a recession or at least we are heading for one. However, with everything going on in the economy, I can't help but think it looks an awful lot like the late 1920s-early 1930s. We have massive unemployment, we have had at least one run on a bank (is there more to come?) While everyone is talking about recession (except Dubya of course-he thinks the economy is just peachy keen), I can't help wonder if we are in fact heading towards a depression. I have not heard anyone mention the "D" word so I keep wondering if it is just me. Does anyone else see it or is it in fact, just me?


Nothing like the Great Depression yet.

We don't have massive unemployment; we're looking at 5-6% by the numbers, and multigenerational welfare for the another uncounted-in-the-stats 5% of the population.  During the Depression, it was around 30%, and there were bread lines on account of food shortages.  Today, the biggest health concern plaguing the poor is obesity, fer chrissakes :)

The runs on the banks are distressing, but predictable at this point.  Anyone could tell that IndyMac (NYSE:IMB) was boned just by looking at a 1-year stock chart, and by virtue of the fact that they were offering above-market rates of interest on deposits -- a sure sign of desperation to attract deposits.  Chuck Schumer's grandstanding was the final nail in the coffin; depositors fled, the bank was no longer well-capitalized, and the FDIC burned $6-7B of its $58B reserves to bail out depositors who had less than the $100K FDIC limit.  (Amazingly, about $1B of IMB's deposits weren't insured -- meaning that people kept more than $100K per account in a failing bank.  Those people lose most, if not all, of their savings above those limits, but it's not like they didn't have months of warning to withdraw their funds and deposit them elsewhere.)

Things start to get interesting when you start to consider what happens after two or three more of the regional banks (or one or two of the big banks) fail, and the FDIC runs out of cash.  They can't very well uninsure deposits; that'd require Congressional approval, and there'd be lineups in front of every bank as soon as the Congressional debates start -- the very proposal would spark the catastrophe they're trying to prevent.  That leaves Congressional action to go the other way; authorize the Fed to print more money, further devalue the buck by another 5% or so, and repay depositors in devalued dollars.  This is fundamentally the same as taking 5% out of everyone's savings (and jacking up the price of oil by 5%, and so on), but 90% of the people won't recognize they're being had.  And the other 10% will realize it's better to lose 5% of your wealth than to lose all of it, which is what would happen if everyone withdrew all their savings to buy gold and hide it under their mattresses...

Elsewhere in the financials, the dead-cat bounce in Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) was just that: even a dead cat will bounce if you throw it off a tall enough cliff.  Naked Capitalism has had excellent coverage of the various bailout plans for Fannie and Freddie.  These are the two that evryone's really worried about; up until now, everyone's assumed that the government (that's you and me, taxpayers) stands behind the debt issued by these two Government-Sponsored Entities (GSEs).  Problem is, that's 5 trillion (yes, that's a T there, as in 5,000 billion) in mortgages.  40% of the US housing market is ultimately underwritten by Fannie and Freddie.  If even 2-3% of those mortgages go belly-up, we're looking at (0.02 * 5000 billion) = 100 billion dollars in losses.  More than enough to wipe out the shareholders (these were $50-60 stocks just a few months ago), but what about the bondholders?  What happens to us when "we" can't repay our debts to the Chinese?  Legally, the Chinese don't have a leg to stand on -- the "guarantee" of the GSEs was always an "implicit" one; after all, how could a bond issued by the Federal National Mortgage Administration not be paid back?  Maybe the US government nationalizes Fannie and Freddie -- wiping out the shareholders (as they ought to), but sticking the taxpayer with the job of paying off the Chinese who bought GSE paper.  Again, the endgame is the printing of more dollars, further devaluation of the currency, further increases in the price of oil when priced in US dollars, and a further crimp on the growth of the US economy. 

(As an aside, it's pretty sucktastic how all these endgames end up looking the same, huh?  Crank up the printing press, fuel commodity inflation, and welcome to the Weimar Republic 2.0.  This is why nuts like Ron Paul were always screaming about the superiority of specie currencies over fiat currencies.  I'm not in favor of a return to the gold standard for reasons beyond the scope of this thread, but you've gotta admit gold's held its value a lot better over the past century than any fiat currency.  And you gotta wonder why Alan Greenspan (yes the Alan Greenspan)'s essay on the perils of fiat currency appears in Ayn Rand's Capitalism: The Unknown Ideal.  Everything he warned about in the mid-60s is finally coming true, in the order in which he and Rand suggested it would.)

But I digress.

Back to banks and the other interesting question -- is my bank next?  Well, hell if I know.  Yesterday it was WaMu (NYSE:WM) and today it was Wachovia (NYSE:WB), tomorrow, it's anyone's guess.  But I wouldn't have any more than $100K in any US-based institution.  Meanwhile, here's a blog post that may be of use.  Here's another blogger who's been right more often than he's been wrong.  Given the lag between banks reporting their data to the FDIC, the FDIC running the numbers through their models, and sanitizing the data for public consumption on the Bankrate site, and the fact that the situation this week is varying on a daily basis, I'd strongly consider pulling all of my assets from any bank not in the soundest/safest group.

But if it's any consolation, nobody has any idea what's going to happen from week to week.

Warning on links:  Strong language, and enough testosterone to make Jim Cramer's Mad Money seem like Mr. Rogers' Neighborhood.  Hey, nobody said trading was polite, just that it was fun.  (I'm still laughing at the imaginary phone conversation at the end of this thread from yesterday... that's the last place I expected to see that meme played.  You'll know the meme when you see it.)

I have no positions in any of the securities mentioned.

IMO, Jim Cramer is a toothache of a man!

No, I'm definitely not saying it's anything like the Great Depression....not yet.  For the first time in 80 years, all bets are off as to how low we could drop!
:o

Meanwhile, all our government can say is, "Buy some cheapo consumer crap that aways made you serfs so happy, then shut up and do as you're told!"
:o

I keep hearing people talk about the fact that we are in a recession or at least we are heading for one. However, with everything going on in the economy, I can't help but think it looks an awful lot like the late 1920s-early 1930s. We have massive unemployment, we have had at least one run on a bank (is there more to come?) While everyone is talking about recession (except Dubya of course-he thinks the economy is just peachy keen), I can't help wonder if we are in fact heading towards a depression. I have not heard anyone mention the "D" word so I keep wondering if it is just me. Does anyone else see it or is it in fact, just me?



Cat


Like Foo Bar said, unemployment isn't nearly as high as was in the Great Depression. However...

~Fuel prices are unsustainable and the petroleum infrastructure is crumbling
~Too much manufacturing in the US has been shut down or outsourced
~The cost of the war in Iraq is unsustainable
~The banking/lending crises are...
~Our debt would require almost 32k$ from every person in the US to pay off
~Social Security is headed toward a fail of Biblical proportions

That's just some of the super major problems facing us right now.

I'm not nearly as eloquent as Foo Bar, so I'll just sum up my thoughts with this picture:

http://www.wikispaces.com/space/showimage/Failboat.JPG

One question though: how have we not already imploded yet?

Ant

Once again, people looking at their own little life, and not at "The Big Picture".

There are similarities with 1929, but even more thing are very different.

Just like 1929, the economic crisis is world-wide, not confined to the US.

Just like in 1929, one world crisis is adding fire to another.

However, the depression in 1929 was caused by loss of the International Financial System as  whole.  It was not a crash in any one nation, and was not caused by inflation, recession, or the price of any comidity.  The loss was in confidence, not money.

Remember how much money was lost in 1929:  none.

~Fuel prices are unsustainable and the petroleum infrastructure is crumbling
~Too much manufacturing in the US has been shut down or outsourced
~The cost of the war in Iraq is unsustainable
~The banking/lending crises are...
~Our debt would require almost 32k$ from every person in the US to pay off
~Social Security is headed toward a fail of Biblical proportions


I'll lay out the most bullish case I can:

Fuel: Not yet.  We still have enough time to use interim technologies like LPG (which can be retrofitted to most gasoline engines) while migrating to a mix of plug-in electric vehicles.  Tesla Motors is probably our best bet in that regard; none of the Big Three or even their Asian competition is anticipating anything as disrputive.  As long as the transition to higher oil prices is slow enough, the economy can adapt.  It's survived pretty well, considering that we've got oil prices that even the most bearish prognosticator wasn't imagining as Manhattanites were still smelling the fires of 9/11.

Manufacturing: Not necessarily a problem, but we have to stay afloat long enough that the Chinese will still make stuff for us.  If push came to shove (and I'm talking a WW2-style "total war" approach), we could scrap the red tape and retool in the space of a year or two.

War: Not any more unsustainable than the mortgage crisis.  :)

Banking:  ...OK, so, much like the war, we're probably boned.

Debt:  Most people will earn about a million bucks over the course of their careers.  Not insurmountable.  But it's getting pretty damn close. 

Socialist Insecurity:  We're boned.  But that's only about a third of the problem; the other 2/3 of the problem is Medicare, which is even worse.

But Karma for the failboat.  That picture pretty much represents where we stand.


One question though: how have we not already imploded yet? 


I'll go back to the start of my first rant.  Our poor are obese, and our middle class can post to threads, not about who will I eat tonight, nor even how will I eat tonight, but about what will I eat tonight?

If you want to stay up at night (why not?  I am!), try this.  Dmitry Orlov's claim to Intarweb fame is a powerpoint presentation entitled Closing the Collapse Gap.  That's the radio mix, and hit all the high points two years ago.  The extended mix is his book, Reinventing Collapse and his blog.

Compared to that,

http://img179.imageshack.us/img179/600/georgebaileybankrun001ac3.jpg

"Now, please! Now, wait a minute! Listen to me! Now, you're thinking about a building and loan all wrong. Your money's not here! Wait a minute, now, let me tell you. Let me tell you. Your money's in people's houses! In the Kennedy house, and the MacClaren house, and in your house, and a hundred others. You all put your savings in here and then we make loans to people to buy homes and cars and other things. Now, what are you going to do? Take their homes and cars and things from them?!"

...is a drop in the bucket.  It can get a lot worse. 

I keep hearing people talk about the fact that we are in a recession or at least we are heading for one. However, with everything going on in the economy, I can't help but think it looks an awful lot like the late 1920s-early 1930s. We have massive unemployment, we have had at least one run on a bank (is there more to come?) While everyone is talking about recession (except Dubya of course-he thinks the economy is just peachy keen), I can't help wonder if we are in fact heading towards a depression. I have not heard anyone mention the "D" word so I keep wondering if it is just me. Does anyone else see it or is it in fact, just me?



Cat
There is no great depression coming. I think people read too much of the crap that the media spills out like this is the worst the economy has ever been since the great depression and everybody believes it.

I keep hearing people talk about the fact that we are in a recession or at least we are heading for one. However, with everything going on in the economy, I can't help but think it looks an awful lot like the late 1920s-early 1930s. We have massive unemployment, we have had at least one run on a bank (is there more to come?) While everyone is talking about recession (except Dubya of course-he thinks the economy is just peachy keen), I can't help wonder if we are in fact heading towards a depression. I have not heard anyone mention the "D" word so I keep wondering if it is just me. Does anyone else see it or is it in fact, just me?



Cat


I know your opinion on Bush is the same as my boss that I work for. (I could do a better job than Dubya.) Ever see those All-State commercials where the guy says "If were not in a recession, it feels like a recession".

Well...it does feel like a recession. But it may or may not become worse.

(I'm going to be Religious here but...) Only God knows what will happen this year.

No we're not going to have a 1929-style crash thanks to successful government programs, such as the FDIC. 

However, it could conceivably get worse than the Carter-Reagan recession of the late '70s and early '80s. 

This is also an affirmation that there is such a thing as "voodoo economics."

The market will behave a certain way if the economy behaves a certain way...and it does this because our theorists say it will.  Data comes back: Outcome poor.   Fire him who said that!

::)

I don't think we are heading for another Great Depression, but I do think things will get worse before they get better.  I don't see gas prices going down, and there will be lots of very cold people this winter.

I do see the export of manufacturing jobs to be a problem - as Adam Smith pointed out, the wealth of a nation is determined by its productive power - and do think that a service economy is not sustainable.

I could go on, but one last thought - poor people aren't obese because they eat too much but because of what they eat - laundry starch gruel fills the  belly, but...

We've been suckered by those who would have us believe that the optimum design for an economy is individual greed.  The Cato Institute, the Heritage Foundation, the Competitive Enterprise Institute, and other doojbag rightwing thinktanks have kept the voodoo economics rolling as long as possible with their inane propaganda. 

Now it's time to pay the piper.  Who's gonna pay?  We are, not the billionaire kleptocrats. 

They're going to print up 12 trillion dollars in funny money to bail out Fanny and Freddie.  That will rev up hyper-stagflation like we've never seen. 
::)


Bailouts are the problem. In a true free market, no government intervention would occur, and bad investments would lead to massive losses in money.  The problem is that we treat the money supply like it grows on trees.  It would be better in the long run to let these institutions fall, so that inflation doesn't go crazy from heavy currency devaluation.

Both CATO and the Heritage Foundation oppose bailouts for this reason.  They also oppose corporate welfare.  Government intervention is just as much to blame here as greed is, because in a free market, irresponsible greed (like the subprime lenders) would lead to real losses with no bailouts.  The Fed Reserve never should've bailed out Bear Stearns, but because they did, J.P. Morgan raked it in at the public's expense.  Again, this is due to government meddling.

We must free up our markets as much as we can, so that the consequences of irresponsibility naturally discourage risky behavior.  Lenders shouldn't lend to people who don't have good enough credit for a normal mortgage, for example.  The way that Countrywide behaved earlier strikes me as a perfect example of a company expecting a bailout if things went wrong.  They found out the hard way that bailouts don't always come.  We need to further this caveat.

Bailouts are the problem. In a true free market, no government intervention would occur, and bad investments would lead to massive losses in money.  The problem is that we treat the money supply like it grows on trees.  It would be better in the long run to let these institutions fall, so that inflation doesn't go crazy from heavy currency devaluation.

Both CATO and the Heritage Foundation oppose bailouts for this reason.  They also oppose corporate welfare.  Government intervention is just as much to blame here as greed is, because in a free market, irresponsible greed (like the subprime lenders) would lead to real losses with no bailouts.  The Fed Reserve never should've bailed out Bear Stearns, but because they did, J.P. Morgan raked it in at the public's expense.  Again, this is due to government meddling.

We must free up our markets as much as we can, so that the consequences of irresponsibility naturally discourage risky behavior.  Lenders shouldn't lend to people who don't have good enough credit for a normal mortgage, for example.  The way that Countrywide behaved earlier strikes me as a perfect example of a company expecting a bailout if things went wrong.  They found out the hard way that bailouts don't always come.  We need to further this caveat.



Well, it's like Franny and Freddy, it's the one-ball vasectomy.  The government bails out the rich people and STILL effs over the poor people!  It's too sweet a deal, this military-industrial/big government-industrial/let's-sell-money-to-ourselves economy, it's not going away because you can launder your losses through the taxpayer and pocket the profits.  It's a win-win situation for big players. 

Big business needs big government and big government needs big business!
8)

This is post-industrial malaise, the menopausal zingers of a fertile economy biting the dust!

I don't think we are heading for another Great Depression, but I do think things will get worse before they get better.  I don't see gas prices going down, and there will be lots of very cold people this winter.

I do see the export of manufacturing jobs to be a problem - as Adam Smith pointed out, the wealth of a nation is determined by its productive power - and do think that a service economy is not sustainable.


interestingly enough, the high oil prices are helping to dampen Chinese imports now, by making it too expensive to ship cheap junk over.

I think the oil market is a bubble waiting to pop however, the $10 drop the other day is a good indication that people are starting to wake up to that fact.

interestingly enough, the high oil prices are helping to dampen Chinese imports now, by making it too expensive to ship cheap junk over.

I think the oil market is a bubble waiting to pop however, the $10 drop the other day is a good indication that people are starting to wake up to that fact.


All these bubbles--the Internet bubble, the housing bubble, the stock market bubble, the oil market bubble, the Billerica bubble--are all just pimples.  We, as a society, need to pop our zits, dab on the cream, and grow the hell up!
:D

Well, it's like Franny and Freddy, it's the one-ball vasectomy.  The government bails out the rich people and STILL effs over the poor people!  It's too sweet a deal, this military-industrial/big government-industrial/let's-sell-money-to-ourselves economy, it's not going away because you can launder your losses through the taxpayer and pocket the profits.  It's a win-win situation for big players. 

Big business needs big government and big government needs big business!
8)

This is post-industrial malaise, the menopausal zingers of a fertile economy biting the dust!


Very true...  I just wish we had more Congressmen like Ron Paul.  If enough Libertarian minded people had power in our government, we'd have smaller government, and corporate welfare would be a thing of the past.

Very true...  I just wish we had more Congressmen like Ron Paul.  If enough Libertarian minded people had power in our government, we'd have smaller government, and corporate welfare would be a thing of the past.


Yeah, but what about all this groovy stuff like plastic and space travel? 
::)

If it can't be done, the serious investor has to take that into consideration, but government can just fish the pool of the taxpayers' money and just futz around with it until they get something right!  Well, the product of this deal is 99% failure don't sound like too gooda deal then? So I says yeah, but the that 1% success rate represents successes such as polymers and the moonshots....

All these bubbles--the Internet bubble, the housing bubble, the stock market bubble, the oil market bubble, the Billerica bubble--are all just pimples.  We, as a society, need to pop our zits, dab on the cream, and grow the hell up!
:D



Bubble, bubble, toil & trouble? Or is it, "Tiny bubbles in the wine"? (or ..."in the whiner"? lol)


Ok, so I'm VERY tired right now. I'm TRYING to be funny-so sue me!


Cat

Bubble, bubble, toil & trouble? Or is it, "Tiny bubbles in the wine"? (or ..."in the whiner"? lol)

Ok, so I'm VERY tired right now. I'm TRYING to be funny-so sue me!


Relax.  As usual, The Onion has all of us beat.

Recession-Plagued Nation Demands New Bubble To Invest In

...and they had a better explanation of the events of this past week than any of the serious commentary I've read.  And they had it on Monday morning.

Relax.  As usual, The Onion has all of us beat.

Recession-Plagued Nation Demands New Bubble To Invest In

...and they had a better explanation of the events of this past week than any of the serious commentary I've read.  And they had it on Monday morning.



Man, I hate when the Onion beats me to it.  :D ;D ;D ;D



Cat

Y'all need to read Paul Krugman's analysis.

Nothing like the Great Depression yet.

We don't have massive unemployment; we're looking at 5-6% by the numbers, and multigenerational welfare for the another uncounted-in-the-stats 5% of the population.  During the Depression, it was around 30%, and there were bread lines on account of food shortages.  Today, the biggest health concern plaguing the poor is obesity, fer chrissakes :)

The runs on the banks are distressing, but predictable at this point.  Anyone could tell that IndyMac (NYSE:IMB) was boned just by looking at a 1-year stock chart, and by virtue of the fact that they were offering above-market rates of interest on deposits -- a sure sign of desperation to attract deposits.  Chuck Schumer's grandstanding was the final nail in the coffin; depositors fled, the bank was no longer well-capitalized, and the FDIC burned $6-7B of its $58B reserves to bail out depositors who had less than the $100K FDIC limit.  (Amazingly, about $1B of IMB's deposits weren't insured -- meaning that people kept more than $100K per account in a failing bank.  Those people lose most, if not all, of their savings above those limits, but it's not like they didn't have months of warning to withdraw their funds and deposit them elsewhere.)

Things start to get interesting when you start to consider what happens after two or three more of the regional banks (or one or two of the big banks) fail, and the FDIC runs out of cash.  They can't very well uninsure deposits; that'd require Congressional approval, and there'd be lineups in front of every bank as soon as the Congressional debates start -- the very proposal would spark the catastrophe they're trying to prevent.  That leaves Congressional action to go the other way; authorize the Fed to print more money, further devalue the buck by another 5% or so, and repay depositors in devalued dollars.  This is fundamentally the same as taking 5% out of everyone's savings (and jacking up the price of oil by 5%, and so on), but 90% of the people won't recognize they're being had.  And the other 10% will realize it's better to lose 5% of your wealth than to lose all of it, which is what would happen if everyone withdrew all their savings to buy gold and hide it under their mattresses...

Elsewhere in the financials, the dead-cat bounce in Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) was just that: even a dead cat will bounce if you throw it off a tall enough cliff.  Naked Capitalism has had excellent coverage of the various bailout plans for Fannie and Freddie.  These are the two that evryone's really worried about; up until now, everyone's assumed that the government (that's you and me, taxpayers) stands behind the debt issued by these two Government-Sponsored Entities (GSEs).  Problem is, that's 5 trillion (yes, that's a T there, as in 5,000 billion) in mortgages.  40% of the US housing market is ultimately underwritten by Fannie and Freddie.  If even 2-3% of those mortgages go belly-up, we're looking at (0.02 * 5000 billion) = 100 billion dollars in losses.  More than enough to wipe out the shareholders (these were $50-60 stocks just a few months ago), but what about the bondholders?  What happens to us when "we" can't repay our debts to the Chinese?  Legally, the Chinese don't have a leg to stand on -- the "guarantee" of the GSEs was always an "implicit" one; after all, how could a bond issued by the Federal National Mortgage Administration not be paid back?  Maybe the US government nationalizes Fannie and Freddie -- wiping out the shareholders (as they ought to), but sticking the taxpayer with the job of paying off the Chinese who bought GSE paper.  Again, the endgame is the printing of more dollars, further devaluation of the currency, further increases in the price of oil when priced in US dollars, and a further crimp on the growth of the US economy. 

(As an aside, it's pretty sucktastic how all these endgames end up looking the same, huh?  Crank up the printing press, fuel commodity inflation, and welcome to the Weimar Republic 2.0.  This is why nuts like Ron Paul were always screaming about the superiority of specie currencies over fiat currencies.  I'm not in favor of a return to the gold standard for reasons beyond the scope of this thread, but you've gotta admit gold's held its value a lot better over the past century than any fiat currency.  And you gotta wonder why Alan Greenspan (yes the Alan Greenspan)'s essay on the perils of fiat currency appears in Ayn Rand's Capitalism: The Unknown Ideal.  Everything he warned about in the mid-60s is finally coming true, in the order in which he and Rand suggested it would.)

But I digress.

Back to banks and the other interesting question -- is my bank next?  Well, hell if I know.  Yesterday it was WaMu (NYSE:WM) and today it was Wachovia (NYSE:WB), tomorrow, it's anyone's guess.  But I wouldn't have any more than $100K in any US-based institution.  Meanwhile, here's a blog post that may be of use.  Here's another blogger who's been right more often than he's been wrong.  Given the lag between banks reporting their data to the FDIC, the FDIC running the numbers through their models, and sanitizing the data for public consumption on the Bankrate site, and the fact that the situation this week is varying on a daily basis, I'd strongly consider pulling all of my assets from any bank not in the soundest/safest group.

But if it's any consolation, nobody has any idea what's going to happen from week to week.

Warning on links:  Strong language, and enough testosterone to make Jim Cramer's Mad Money seem like Mr. Rogers' Neighborhood.  Hey, nobody said trading was polite, just that it was fun.  (I'm still laughing at the imaginary phone conversation at the end of this thread from yesterday... that's the last place I expected to see that meme played.  You'll know the meme when you see it.)

I have no positions in any of the securities mentioned.


Nail on head.

It's going to cost a trillion or so to fully bail out the banks, which whilst huge, is nothing compared to what our newest phony war is going to end up costing. The circumstances really just don't exist to create a mass depression anymore, the Economy is spread out too much, too diverse as it were. It would take events of apocalyptic proportion to create an economic situation akin to the late 20's and early 30's.

Nail on head.

It's going to cost a trillion or so to fully bail out the banks, which whilst huge, is nothing compared to what our newest phony war is going to end up costing. The circumstances really just don't exist to create a mass depression anymore, the Economy is spread out too much, too diverse as it were. It would take events of apocalyptic proportion to create an economic situation akin to the late 20's and early 30's.


Never say never.  I don't see a repeat of the 1930s Great Depression in the offing...but I see some pretty dayum uncomfortable times ahead.  Considering we were a tougher bunch in 1930, only a few of Americans will be prepared to fend for themselves when the spaghetti hits the fan.  I don't think I'm among them!
:o

Never say never.  I don't see a repeat of the 1930s Great Depression in the offing...but I see some pretty dayum uncomfortable times ahead.  Considering we were a tougher bunch in 1930, only a few of Americans will be prepared to fend for themselves when the spaghetti hits the fan.  I don't think I'm among them!
:o


Oh I guess it's conceivable. But to put it succinctly (thanks for that by the way, great word!) s**t would have to be really f***ed up!

Oh I guess it's conceivable. But to put it succinctly (thanks for that by the way, great word!) s**t would have to be really f***ed up!


http://i212.photobucket.com/albums/cc236/jhum101/idiocracy4.jpg

...and that von Mises guy talked like a f*g! :)

We may be on the road to serfdom, but at least we're enjoying the ride.  I don't trust this week's banking sector rally as far as I can throw it.  $300B might be enough to keep Fannie and Freddie afloat, and as one of the 300 million taxpayers I'll gladly throw 'em a $1000 bone to delay the inevitable.  But it's only delaying the inevitable until after the election.

But delaying the inevitable until after the election might work; the strategy appears to be to delay the implosion as long as possible.  If you can delay it long enough, banks can recapitalize, both through the selling-off of non-core assets (typically retail operations in countries they don't really care about) and through the issuance of new equity or debt offerings (typically to sovereign wealth funds, that is, the assets of foreign governments -- these other governments don't have any interest in seeing the US banking system implode either, after all...)

As a trader, my problem with betting on the end of the financial world is that you've got no way to collect.  Doesn't matter if you've got bits on some brokerage's backup tapes that say you've made a gazillion bucks shorting the banks to zero, when the only trading going on is in gold, silver, and lead... because the first two make lousy bullets.