'We're on the verge of a great, great depression'

[Just_Believe18]

You almost sound excited to foretell doom on the country, Jackoroe, just so you can blame Obama for it.

 

[Kulindahr]

No. Because they're actually WORSE than they were at the worst of the crisis. We're past the point of the bubble collapsing. Something more serious is going on.

Yeah -- all the houses that got built because banks were pumping money at people who couldn't afford to be buying a house are increasing supply when there's little demand.

 

[NineOfClubs]

You almost sound excited to foretell doom on the country, Jackoroe, just so you can blame Obama for it.

Well, two plus years have done little to stem the decline.

Yes, things are getting worse and there's little hope for change (no pun intended).

 

[Joshua_me]

Well, two plus years have done little to stem the decline.

Yes, things are getting worse and there's little hope for change (no pun intended).

And if you had your way, what would be *your* solution to the problem, NoC ?

 

[NineOfClubs]

And if you had your way, what would be *your* solution to the problem, NoC ?

All the "stimulus" was sent to big business, state governments and unions.

I would have sent it to individuals. Helping them pay their bills, mortgages, etc..

Eventually that money would have helped Wall Street and Banks, but indirectly.

It is a "government of the people, by the people, and for the people", isn't it?

 

[JB3]

Ditto.

There have been doomsayers about the economy all the time... claiming their will be a depression... lots of bold claims, little evidence. There are economic cycles... a recovery will have its weak spots. Doesn't mean all the indicators are pointing down. This could just be a blip, and historically, it would point out to be one.

And usually those who are trying to paint this as a depression have obvious motives... like wanting the White House to go to the GOP in 2012. We're not in a depression. We're not even near one. But if the Republicans gain the White House in 2012, I'll guarantee there will be a depression worse than what happened in 1929.

You think Robert Reich (one of Obama's leading economic advisors) wants a Republican in the white house? What he's saying is that it doesn't MATTER who wins in 2012 if the economy has already slipped back into recession. People are too focused on that election instead of on what is right in front of their face. He's saying the problem is exactly what you've demonstrated here; people apparently are willing to put off facing up to the problems in hope that they'll be fixed after their preferred candidate wins. What we're seeing isn't a blip, because those happened long ago. What we're seeing is a build-up of the exact same forces that led us down this path before.

The facts are that the recovery has come to a grinding, screeching halt. The facts are that the areas of the economy that began the original crisis are showing the exact same signs of weakness, and in the case of housing, have actually dipped further BELOW where they were at their worst. The facts are that if politicians and observers sit on their hands until after the election, the economy will already be in another recession. The facts, my dear friend, are that people like Reich have warned from the very beginning about the possibility of a double-dip recession, and their predictions look to be coming true.

So are you really going to sit there and tell us that the economy is all fine and dandy and that there's nothing to worry about, when the economy itself is telling a different story?

 

[Kulindahr]

^
^
Not forgetting that the actual rate of inflation is striving to enter the double-digit range.

 

[NineOfClubs]

My OH were discussing this today.

We both agreed: "Why didn't they just give the money to us, to help pay our mortgages? The rules for the use of the money would be as strict as it is today, for short sales." (Ask me, if you want more details on short sale rules.)

As you have said, the money would have trickled up. Just like it's supposed to.

If the idea were implemented correctly, I cannot see one single reason why it wouldn't have worked.

Even from the beginning, I thought this was the solution.

Households would have been more secure and banks would have felt the positives, eventually.

 

[rareboy]

Even from the beginning, I thought this was the solution.

Households would have been more secure and banks would have felt the positives, eventually.

Wow.

Talk about a socialist dream.

All the people being paid out of borrowed money as a reward for taking on mortgages they couldn't afford....in many cases to blow more money off on toys and trips and health care.

In one fell swoop, any cred that you may have had as a conservative is gone.

Gimme some money. Gimme. We promise to spend it better the next time around.

You do all realize don't you, that there was no actual truckload of money sent to the banks.

The conservatives got exactly what they should want. Support for the top feeders in the Ayn Rand paradise of a 'free' economy.

 

[rareboy]

You know, $14 trillion is a serious chunk of change--- I can't blame jackoroe for being a bit concerned about it. Just not sure why he cares NOW.

Ironic isn't it, that while Congress and the White House were spending like whores on a holiday during the Bush years on fake wars......no one cared about the spiraling debt....even though the debt feeds itself by compounding interest.

But suddenly it is a real problem.

But will the Republicans cut any of the corporate entitlements?

Defense??

Raise taxes back to reasonable levels for the top earners?

Nawwwwwwwwwwwwwwwww.

I would have thought that the billions and billions and billions that had been funnelled back into the pockets of the top tax bracket would have translated into 100's of thousands of new trickle dow jobs.

Oh wait. It isn't going to happen. The rich don't create the majority of jobs in their own country. A vibrant and secure middle class create the jobs.

 

[jackoroe]

I'm not saying that "happy days are here, again", but I'd take *everything* I hear between now and November 2012 with a grain of salt.

Make no mistake: Food prices are soaring, home prices are stagnant or falling, and the job market sucks. But this is the result of too few people holding all of the money.

It's a vast oversimplification, but imagine playing a game of Monopoly where the "banker" hands out no new money except what you started the game with....

What happens ? You just go round and round on the board with no results.

Sure, your "Boardwalk with a hotel" is worth $1,200 each time someone lands on it, but what does it matter if no one has the money to buy it ? There's no point in the game.

America's bankers are holding our country hostage. There's no way to start new businesses, no incentives to buy a new home, and no reason to "roll the dice" since the game is rigged.

The answer ? America's ruling one percent is not going to budge until they Republicans are back in full control.

They hold the gold, they make the rules.

This is far different than the crash of the 1920's. For one thing, there will be no run on the banks and mass hysteria, thanks to social media we are much better connected to what's going on minute to minute than those poor folks were who were relying on yesterday's newspaper headlines.

So, the bottom line, unfortunately, is to sit still. If your lucky enough to own your own home - stay there. If you're lucky enough to have a job that pays your bills - stay there as well.

They have us by the short hairs at the moment, but this too shall pass.

Pretty much spot on description of our current situation. The one thing you did fail to mention, is that business is sitting on a ton of money and not investing it. Their motive for not doing so, is uncertainty. It isn't greed, because idle capital does them absolutely no good.

We need to find a way to get them to invest in job creation. Preferably in the US.

 

[Jack Springer]

I didn't make it through all the comments, but the general response seems to be -- everything is fine.

Everything is not fine.

Tell those that have been unemployed for almost 3 years that everything is fine.

Tell the homeowner who bought a house, put all their life savings into it and now are losing it because they lost their job that everything is fine.

Tell the worker that has not had a raise for the last 3-4 years that everything is fine -- it isn't.

It's time to face up to some facts. We are in trouble.

We're spending much too much money and taking in less and less because of job loss, loop holes in the tax code, special interest tax limitations like Medicare and Social Security.

All the politicians can do is talk and degrade those on the other side -- kinda sounds like CEP.

Get ready. It is coming for all of us.

 

[chance1]

I'm sitting on a pile of equities.

This explains a lot

 

[maxpowr9]

I didn't make it through all the comments, but the general response seems to be -- everything is fine.

Everything is not fine.

Tell those that have been unemployed for almost 3 years that everything is fine.

Get a new job skill set or are you too lazy to reeducate yourself? 3 years is an awful long time to sit around doing nothing.

Tell the homeowner who bought a house, put all their life savings into it and now are losing it because they lost their job that everything is fine.

Learn to diversify your investments. A home is an investment, not a right. If you put all your eggs in one basket, that is the risk you take. Note that 'property' was not taken from Locke and put in the Declaration of Independence.

Tell the worker that has not had a raise for the last 3-4 years that everything is fine -- it isn't.

I'll agree to some extent here. Raises are hard to come by. They basically lay off many employees and hire new ones at lower salaries. The problem also is that many raises are tied into COLAs and when dealing with stagflation, it is a lose-lose situation.

It's time to face up to some facts. We are in trouble.

We're spending much too much money and taking in less and less because of job loss, loop holes in the tax code, special interest tax limitations like Medicare and Social Security.

All the politicians can do is talk and degrade those on the other side -- kinda sounds like CEP.

Get ready. It is coming for all of us.

The republicans are playing chicken with the economy and they need to have an "adult moment" or else they will doom this nation. Raise taxes and cut spending, not that hard.

 

[T-Rexx]

I don't get this thread at all.

We are not on the "verge" of a great, great depression, we are in the midst of one. It began in 2008, as a result of thirty years of Republican economic policy, exacerbated by GWB's insistence that the rich need to get a whole lot richer.

Do you guys actually believe that the collapse of virtually every large bank in America merely constitutes a "recession"? Do you think that the bankruptcies of General Motors and Chrysler are typical casualties of recession? Do you think that the mortgage crisis is just some statistical fluctuation in the economy?

Were it not for massive and unprecedented government intervention by GWB and Obama, we would today have tens of thousands of people literally starving and dying of exposure in our streets.

It took more than 10 years to recover from the first great depression, and it will take a similar length of time to recover from this disaster. Employment is not going to return to normal in just a few years. Salaries are going to stay low for most workers for quite a few years to come. Housing prices are going to continue to depreciate. Massive amounts of money were shifted from the middle class to the wealthy by virtue of decades of American economic policy. You don't get changes like that corrected overnight.

We now have an opportunity to begin to correct the policies that resulted in this man-made disaster. But, curiously, the Republican Party is determined to prevent this from happening. Depression can be a very good thing - if you happen to be filthy rich.

 

[Kulindahr]

My barber made that comment, Kulindahr. I listened with keen interest and pondered.

But here's the thing:

Why would it make a difference if X amount of $$ were given to the homeowners, as opposed to the banks?

That doesn't have anything to do with my post, but...

the money that went to the banks had to be paid back. I think the proposition here is that money actually be GIVEN to the homeowners (really buyers; if they were owners, that would mean their payments were done).

 

[Kulindahr]

Get a new job skill set or are you too lazy to reeducate yourself? 3 years is an awful long time to sit around doing nothing.

Learn to diversify your investments. A home is an investment, not a right. If you put all your eggs in one basket, that is the risk you take. Note that 'property' was not taken from Locke and put in the Declaration of Independence.


I'll agree to some extent here. Raises are hard to come by. They basically lay off many employees and hire new ones at lower salaries. The problem also is that many raises are tied into COLAs and when dealing with stagflation, it is a lose-lose situation.

The republicans are playing chicken with the economy and they need to have an "adult moment" or else they will doom this nation. Raise taxes and cut spending, not that hard.

You seem to recognize some reality at least in theory in your third paragraph, but ignore it in the first and second.

"Reeducate yourself" -- with what money? Most Americans have long been just one paycheck from hunger, because the corporate masters don't pay any more than that.

"A home is an investment"? That's only true for people whose lives won't change much if they don't have one, or for people who have an extra and are renting it out.

COLAs -- if the government weren't lying about inflation, those would really be ballooning the debt, especially since they're set up to reward the wealthy. Real inflation now is in the high upper single digits somewhere.

 

[rareboy]

Well at the moment today, the Dow is down 37 and the TSX is up 10.

Hardly a repeat of the breathtaking plunge of 2008/09 when we were losing 400-600points per day.

Of course the low job gain has to hurt the markets. I'm sure that Friday's report will bring no joy.

But I have a lot of stocks that have actually made money over the last 5 days. What do they tell me about the direction of the economy?

Signs of a stalling recovery have been building, with stocks delivering their worst monthly performance in May since August 2010. But all three indexes are still up for the year so, while the daily gyrations may cause investors some nausea, the trend is still higher.

http://tmx.quotemedia.com/caarticle.php?newsid=41857035

 

[maxpowr9]

You seem to recognize some reality at least in theory in your third paragraph, but ignore it in the first and second.

"Reeducate yourself" -- with what money? Most Americans have long been just one paycheck from hunger, because the corporate masters don't pay any more than that.

"A home is an investment"? That's only true for people whose lives won't change much if they don't have one, or for people who have an extra and are renting it out.

COLAs -- if the government weren't lying about inflation, those would really be ballooning the debt, especially since they're set up to reward the wealthy. Real inflation now is in the high upper single digits somewhere.

Even with a 45-hour+ a week job, I still work part-time jobs on the weekend to make ends meet. Luckily my mom (a CPA) was fortunate enough to teach me some bookkeeping for free. I have friends who are waiters on the weekend and make about $300+ in tips. If you are too above working at a Walmart or McDonald's, you have horrible priorities. Some money is better than no money coming in. With that, Americans generally have trouble with wants vs needs. Do you really need 3 TVs in the house when only two people live in it? Do you really need to go out to eat every Friday? Show me a smoker and they can start rolling their tobacco with $1 bills. I could go on but would rather not.

Americans also need to ditch the idea of home ownership as a given and I will blame Clinton for that. There is absolutely nothing wrong with renting an apartment. Hell in the Boston area, it is actually cheaper to rent than to own. I would like to buy property some day but I don't NEED to.

Yah the problem with inflation is that food is not in the "basket of goods" due to too many variables/substitutes.

 

[NineOfClubs]

Very interesting reading:

http://www.telegraph.co.uk/finance/...-1930s-pace-as-Obama-eyes-fresh-stimulus.html

"It’s frightening," said Professor Tim Congdon from International Monetary Research. "The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly," he said.

The US authorities have an entirely different explanation for the failure of stimulus measures to gain full traction. They are opting instead for yet further doses of Keynesian spending, despite warnings from the IMF that the gross public debt of the US will reach 97pc of GDP next year and 110pc by 2015.