Great Depression II by 2011

[Hawkgirl]

30 reasons for Great Depression 2 by 2011
New-New Deal, bailouts, trillions in debt, antitax mindset spell disaster
By Paul B. Farrell, MarketWatch

Scan these 30 "leading indicators." Each problem has one or more possible solutions, but lacks unified political support. Time's running out. We're already at the edge. Add up the trillions in debt: Any collective solution will only compound our problems, because the cumulative debt will overwhelm us, make matters worse:

1.  America's credit rating may soon be downgraded below AAA
2.  Fed refusal to disclose $2 trillion loans, now the new "shadow banking system"
3.  Congress has no oversight of $700 billion, and Paulson's Wall Street Trojan Horse
4.  King Henry Paulson flip-flops on plan to buy toxic bank assets, confusing markets
5.  Goldman, Morgan lost tens of billions, but planning over $13 billion in bonuses this year
6.  AIG bails big banks out of $150 billion in credit swaps, protects shareholders before taxpayers
7.  American Express joins Goldman, Morgan as bank holding firms, looking for Fed money
8.  Treasury sneaks corporate tax credits into bailout giveaway, shifts costs to states
9.  State revenues down, taxes and debt up; hiring, spending, borrowing add even more debt
10. State, municipal, corporate pensions lost hundreds of billions on derivative swaps
11. Hedge funds: 610 in 1990, almost 10,000 now. Returns down 15%, liquidations up
12. Consumer debt way up, now at $2.5 trillion; next area for credit meltdowns
13. Fed also plans to provide billions to $3.6 trillion money-market fund industry
14. Freddie Mac and Fannie Mae are bleeding cash, want to tap taxpayer dollars
15. Washington manipulating data: War not $600 billion but estimates actually $3 trillion
16. Hidden costs of $700 billion bailout are likely $5 trillion; plus $1 trillion Street write-offs
17. Commodities down, resource exporters and currencies dropping, triggering a global meltdown
18. Big three automakers near bankruptcy; unions, workers, retirees will suffer
19. Corporate bond market, both junk and top-rated, slumps more than 25%
20. Retailers bankrupt: Circuit City, Sharper Image, Mervyns; mall sales in free fall
21. Unemployment heading toward 8% plus; more 1930's photos of soup lines
22. Government policy is dictated by 42,000 myopic, highly paid, greedy lobbyists
23. China's sees GDP growth drop, crates $586 billion stimulus; deflation is now global, hitting even Dubai
24. Despite global recession, U.S. trade deficit continues, now at $650 billion
25. The 800-pound gorillas: Social Security, Medicare with $60 trillion in unfunded liabilities
26. Now 46 million uninsured as medical, drug costs explode
27. New-New Deal: U.S. planning billions for infrastructure, adding to unsustainable debt
28. Outgoing leaders handicapping new administration with huge liabilities
29. The "antitaxes" message is a new bubble, a new version of the American dream offering a free lunch, no sacrifices, exposing us to more false promises

We see the Great Depression 2. Why? Wall Street's self-interested greed. They are their own worst enemy ... and America's too.

Source

So, anyone agree with this man?

[DumbAss Tanker]

Few of them are what a real economist would actually call a 'Leading indicator' of anything, they are a bunch of ugly stats or even just atypical items in search of a unifying theme.  To this guy it's 'Great Depression #2,' who knows, he could accidentlaly be right, but the things he's talking about were either nonfactors in bringing on the Great Depression or more in the nature of responses to it than causes of it.  The depths of the Great Depression came when Congressional protectionism (demanded by both industries AND unions) crashed the world trade system with the Smoot-Hawley tariffs, and international trade seems to be almost invisible as a factor to this guy.

[Baruch Menachem]

these are all lagging indicators of a Recession almost finished.

What we need to do is get past the collapse of the currency.  If the Chinese decide they need to rescue their own economy, the best way for them to do it would be to move out of us treasuries.    They are the single biggest investor.  They decied they have to move out, or even stop buying, then there really will be a crash.

Same scenario with OPEC.    They are sitting on huge piles of US treasuries.  They have huge spenidng habits based on $75 oil, with oil at $45.  They can sell out their piles of treasuies too.

But given what I have been hearing from Team Obama, sometime soon there is going to a rush for the door.  No one wants to have everyone else know they are making for the door, but I am pretty sure they all are.


Sometime soon look for oil to be priced in Yen or Euros.  Then look for the prices for shirts from china to shoot to $300

[Happy Fun Ball]

More like Great Depression III.

[formerlurker]

He sees "nothing but large increases in the deficit ... I think it would be worse than the depression. ... Before I go to sleep at night, I wonder if tomorrow is the day Moody's and S&P will announce a downgrade of U.S. government bonds." It'll get worse because "the public is not prepared to increase taxes. Both parties were for reducing taxes, reducing income to government, and both parties favored a number of new programs, all very costly and all done by the government."

Reuters concludes: "Whitehead said he is speaking out on this topic because he is concerned no lawmakers are against these new spending programs and none will stand up and call for higher taxes. 'I just want to get people thinking about this, and to realize this is a road to disaster,' said Whitehead. 'I've always been a positive person and optimistic, but I don't see a solution here.'"

 

[formerlurker]

these are all lagging indicators of a Recession almost finished.

What we need to do is get past the collapse of the currency.  If the Chinese decide they need to rescue their own economy, the best way for them to do it would be to move out of us treasuries.    They are the single biggest investor.  They decied they have to move out, or even stop buying, then there really will be a crash.

Same scenario with OPEC.    They are sitting on huge piles of US treasuries.  They have huge spenidng habits based on $75 oil, with oil at $45.  They can sell out their piles of treasuies too.

But given what I have been hearing from Team Obama, sometime soon there is going to a rush for the door.  No one wants to have everyone else know they are making for the door, but I am pretty sure they all are.


Sometime soon look for oil to be priced in Yen or Euros.  Then look for the prices for shirts from china to shoot to $300

This being stated, experts see more challenges coming in the next year for China in terms of stable agricultural development and rural income increases as the international financial crisis deepened.

Market contraction both at home and abroad has driven down prices of agricultural products such as bean, corn and cotton. This raises concerns of decreased agricultural production and farmers' future income.

Shrinking international demand for Chinese products also forced domestic companies to cut or stop production, driving migrant workers back to their hometowns earlier than usual this year.

So far, statistics from the Ministry of Human Resources and Social Security showed 10 million or 10 percent of China's total 130 million migrant workers returned home jobless.

The country issued a series of measures to support rural development in the past two months. Farmers are being given subsidies to purchase home appliances, free training for laid off migrant workers is being offered and loans were supplied to help farmers start businesses.

http://en.ce.cn/National/Politics/200812/28/t20081228_17810355.shtml

Liu Shouying, researcher at the State Council's Development Research Center, said that the current global financial turmoil has shaken China's economy, which has been export-oriented since 1998. The slowdown in business has affected a large number of industry employees, of which significant portions are migrant workers from rural regions.

Deputy Secretary of China Development Research Foundation, Tang Min, shared a similar view, "the financial crisis has caused about 20 percent of China’s current 200 million rural migrant workers to lose their jobs, which means that more than 40 million workers from rural regions have been affected."

http://english.caijing.com.cn/2008-12-14/110039042.html

10 million, 20 million, what is a few million (it is probably much higher by the way) -- you get the point.   When a country's ecomony is administered by a communist government I can assure you that they have their share of problems.

The U.S. is China's #1 trading partner.   The U.S. tanks, and so does China's economy (and military buildup).   

Don't see it happening.   

[Baruch Menachem]

an interesting side note.  What happens to Hamas, Hezballah and the other zany groups when Iran has to alter budgets due to lower oil prices?   Domestic security forces are more important than being a nucence, and the contry has been very restive late.   And can they afford all that energy for their gas centrafuges?  I gather those things are huge energy hogs.  A bomb is nice, but paying the bills for your secret police is probably a higher priority right now.   Hugo Chavez already has been forced to re evaluate a few things.  He is still willing to pay for good publicity through Citgo, but that can't last much longer when oil goes to much further south.


OTOH, some places just make their military bigger as the economy contracts.  it is good make work, gets all the men in a place they can be watched and monitored, and makes for good control if you use the trooops to put out fires that break out. 

[Lacarnut]

No depression but a stagnant economy for the next year,two or three. The government trying to spend it's way out of the downturn will not work. It will make matters worse. The damn Repubs should be against these bailouts and the multitude of new spending programs the Magic Negro and the lefty Democraps will bring forth. Obama stated that ONLY government can get us out of this mess which is a crock of crap. 

[Bluesuiter-Retired]

I was watching Fox Business yesterday.  They had an economist on who wrote a book about the coming depression.

He clearly stated that even with the nearly $ 2 Trillion in economic stimulus obama and the dems are planning to spend within the next month or so, the U.S. economy will be WORSE than it is today.

Very sobering analysis.

One dem strategist was going on about major tax increases for the rich.  The problem is, it would only raise $ 300 Billion which would just be a drop in the bucket when compared to the $ 2 Trillion deficit.

Guess what, obama's promise to not raise taxes on the middle class will go by the wayside.  Even then any additional revenue wouldn't really amount to much.

I get a chuckle every time a dim/lib talks about increasing taxes on the rich.  They just don't get it that the rich [who just happen to own the businesses which hire us] will do one of two things

1)  increase the price of the goods and services the companies they own to offset the increase in taxes they pay, which means consumers will pay higher prices or spend less.  Either way it will mean other businesses will find themselves in a similar situation.

2)  CLOSE the businesses they own when they find their losses outstrip their profit, which will also decrease the amount of tax revenue.

All businesses are inter-related.  What affects one affects all.  It's the pebble in the pond - toss a pebble in the bond and the water ripples out away from the point of impact.

[john c calhoun]

well what these so called expert economists seem to be leaving out is, its been a BI PARTISAN strategy that has caused this  economy...

NAFTA ...

sponsored by the GOP & cheerful endorsed by william jefferson clinton...

too bad Ross Perot didn't win 18 years ago....

tariffs on imports are the quickest  & by far most effective solution right now...

this would releave the US taxpayers of the enourmous burden we've had placed on us for nearly 100 years  & help free up  EARNED capitol to start rebuilding US business ....

f**k china , mexico & exxon....

import tariffs now, or be prepared to live in the 3rd world...

[Lacarnut]

well what these so called expert economists seem to be leaving out is, its been a BI PARTISAN strategy that has caused this  economy...

NAFTA ...

sponsored by the GOP & cheerful endorsed by william jefferson clinton...

too bad Ross Perot didn't win 18 years ago....

tariffs on imports are the quickest  & by far most effective solution right now...

this would releave the US taxpayers of the enourmous burden we've had placed on us for nearly 100 years  & help free up  EARNED capitol to start rebuilding US business ....

f**k china , mexico & exxon....

import tariffs now, or be prepared to live in the 3rd world...

Protectionism is not the answer. We need fair trade. For example, an American car sold in Canada sells for several thousand dollars more because of import duties that the Canadian government imposes. Buy a $40k Caddy in Europe and it will cost you $50k. I was in the golf business in the 70's. A top of the line golf set with woods and irons ran around $250; in Japan it sold for $1k. We allow China to export their shitty products into this country. In return, we have to beg them to allow us to import our goods to them. For example, LA and TX have the best rice in the world. Last time I heard, there was severe restrictions on imports of rice to China and Japan. Our trade policy is f. Starting a trade war is not the answer. We need fair trade. The US is guilty of this also but not to the degree that our trading partners do.

BTW, JCC, Exxon did not have one damn thing to do with the high oil price prices. The speculators, hedge funds and the wall street boys drove up the price and then shorted the market and the price fell like a rock. This is a very bad situation because the oil and gas companies will cut back on production for the next year or two and the price will start to rise again. You can book it. The one industry that the US has that no one in the world can touch is the oil industry which create great jobs and pay. Don't drink the kool-aid that the media is feeding you. Why do you think we are in shit-hole countries like Nigeria, Iran, Saudi A, Venezeula? We are the best in that field. If the stupid pr!cks in DC would allow drilling in all of the offshore areas, in AK and on federal lands, we could dig ourselves out of this economic mess we are in.   

[john c calhoun]

Protectionism is not the answer. We need fair trade. For example, an American car sold in Canada sells for several thousand dollars more because of import duties that the Canadian government imposes. Buy a $40k Caddy in Europe and it will cost you $50k. I was in the golf business in the 70's. A top of the line golf set with woods and irons ran around $250; in Japan it sold for $1k. We allow China to export their shitty products into this country. In return, we have to beg them to allow us to import our goods to them. For example, LA and TX have the best rice in the world. Last time I heard, there was severe restrictions on imports of rice to China and Japan. Our trade policy is f. Starting a trade war is not the answer. We need fair trade. The US is guilty of this also but not to the degree that our trading partners do.

BTW, JCC, Exxon did not have one damn thing to do with the high oil price prices. The speculators, hedge funds and the wall street boys drove up the price and then shorted the market and the price fell like a rock. This is a very bad situation because the oil and gas companies will cut back on production for the next year or two and the price will start to rise again. You can book it. The one industry that the US has that no one in the world can touch is the oil industry which create great jobs and pay. Don't drink the kool-aid that the media is feeding you. Why do you think we are in shit-hole countries like Nigeria, Iran, Saudi A, Venezeula? We are the best in that field. If the stupid pr!cks in DC would allow drilling in all of the offshore areas, in AK and on federal lands, we could dig ourselves out of this economic mess we are in.   

other countries  are slapping tariffs on what little we export to them  & between that & them being able to loot our economy, those countries have been growing more than us these past 10 years or so...

exxon IMPORTS & therefore they should be TAXED...

this will lead to increased DEMAND for DOMESTIC OIL ....

the only way to get domestics moving again in not only oil, but everything else , is to make IMPORTS too expensive while at the same time financing our government & relieving  US taxpayers...

how well has Icleand done since they went gungho free trade & dropped taxes down to next to nothing ??...

the US was created on  Tariffs & will be saved by it again, or we go down...

[GOP Congress]

Let's also be VERY CLEAR on another point.

Recessions are part of the normal ebb and flow of the business cycle, usually coupling technological innovation with the ability of industry to effectively market said innovations to the most amount of people. That's economics in a nutshell.

In general, if regulation for the industry can be initiated and maintained by the proponents of the industry itself, the industry will thrive more completely than if the industry is regulated by an outside source. This allows for the industry to grow effectively without adversely affecting the individuals involved within and tangential to that industry.

If regulation is enforced from OUTSIDE of the industry (government), then the industry, by definition, has to concentrate resources on determining the rational validity of that outside regulation. The only reason government has to intrude on an industry is if the industry itself is affecting individuals in a negative matter, proven by RATIONAL, and not SPECULATIVE, analysis. For instance, if an industry makes cars that have a tendency to explode in fender benders (like those great tv shows from 60's and 70's), then government would probably have a right to step in. Note the word, "probably." The amount of probability would be discussed in creating bills.

But back to the argument at hand: The issue of government regulating the businesses not for rationally-debated safety or national defense concerns, but for the actual PRODUCTION methods and economics of the industry, creates an IRRATIONAL regulation scheme that results in irrational results. This is where the relative word "fairness" is routinely bandied about, such as who should pay, who should receive, etc.

With THAT explanation, the ability to determine how big a role government has had is easily definable:

1. Blame the problem on the rational
2. Create the irrational policies
3. As irrational results occur, champion the downtrodden and enact more irrationality.
4. Compound the irrationality by championing the false "successful results."
5. Rinse and repeat.

This is how, essentially, the Democratic Party compounded a business crash in 1929 into a situation where the conditions for World War II were nurtured. A crisis, made much bigger by the immediate pandering to the fears created by the then-current shock of a business crash, were perpetuated through a long period of time. This illusion of "trying to stop the depression" was ACTUALLY PERPETUATED by the democratic party TO STAY IN POWER.

THIS is the exact idea on what Barack Obama has pounced on, and must be held accountable.