A Great Depression Is Coming?

[FOTD]

http://www.pbs.org/wgbh/amex/crash/filmmore/pt.html


"At the end of 1929, as they celebrated New Year's Eve, all that lay in the future. Nobody knew that the Great Depression was coming -- unemployment, bread lines, bank failures -- this was unimaginable. But the bubble had burst. Gone was that innocent optimism, the confidence, the illusion of wealth without work. One era had ended. They toasted the coming of the 30s, but somewhere, deep down, they knew the party was over."


Will anti-depressants help us all? Sorry. Devil just could not resist. FOTD doubts it since we probably will not be able to afford them unless you get the $4 generic brand at WMT.

[Gaspar]

Will my cell phone still work?

[FOTD]

How else will "they" know where you can be found?

The devil knows the lines will still be there....but who has access is the issue.
Next up? Autos...then airlines. They will have access. By the time Uncle Sam gets around to you and me? Access issue for sure.

[carltonplace]

This political forum is giving me a great depression.

[iplaw]

Our modern day depression germinated in the 30's when the government created SSI and Medicare/Medicaid in the 60's.  

Within 10 years every dollar in revenue generated in this country will be spent on these programs alone.  That doesn't account for defense, infrastructure, civil programs, etc.

Massive cuts and restructuring of these behemoths are our only options to avoid a permanent enconomic meltdown very soon. Raising taxes is not an option because doing so will only serve to reduce the GDP.  Like it or not, revenues under the Bush tax cuts have produced record revenue in the last 4 years specifically.

We can't afford these programs as they are.  In addition to cutting those programs, a moratorium on discretionary spending needs to be implemented immediately until we can get the deficit under control.

A trillion dollars in new spending over the next 10 years is not going to solve anything.

[FOTD]

But we can afford the massive military expenditures and tax give aways to corporations? We can afford policies that inhibit new technologies to lower our dependence on foreign oil but not raise tax revenues from the top %2 in income?

We all know your a dweeb from looking at the avatar self portrait.

[iplaw]

You're missing the point, no surprise.  Raising taxes will do nothing to solve the impending SSI/Medicare crisis which will make Fannie/Freddie look like a walk in the park.  The numbers are simply too large.

By the way, those "tax giveaways" to corporations encouraged capital expenditures which in turn raised the GDP and increased tax revenue generation over the last 4 years.

The rest of your post is simply non-sequitors.  Try writing out complete thoughts and I'll respond to the rest.

[FOTD]

10 Things You Should Know About Bush's Trillion Dollar Fleecing Plan

http://www.alternet.org/workplace/99876/

"The Bush administration's proposal to bail out some of Wall Street's biggest players with an unprecedented transfer of public wealth to the private sector sent shock-waves throughout the nation.

Already deep in deficit, the administration wants to borrow $700 billion dollars -- in addition to the $900 billion already spent this year to prop up troubled lending institutions and deal with the fall-out from the housing crisis -- and entrust it to Treasury Secretary Henry Paulson, fresh from a long run on Wall Street himself. He'd then buy up worthless paper from struggling banks.

Who would get the money? Nobody knows. Paulson says he wants to hire Wall Street firms to oversee the process.

Under Bush's plan, the taxpayer would get little, if anything, in return. The whole thing would happen without Congressional oversight, save for a semi-annual report on the process, and Paulson's actions would be beyond challenge in the courts.

It is an economic coup d'etat in the making. And people are talking about little else. Here's 10 things that have been on our radars ..."


"Principles to Guide the Bailout

1) Financial institutions should be forced to endure the bulk of the losses with taxpayer funds only used where absolutely necessary to sustain the orderly operation of the financial system.

2) The bailout must be designed to minimize the opportunity for gaming.

3) The bailout should be designed to minimize moral hazard.

4) In the case of delinquent mortgages that come into the government's possession, there should be an effort to work out an arrangement that allows the homeowner to remain in her house as owner. If this proves impossible, then former homeowners should be allowed to remain in their homes as renters paying the market rent. This should be done even if it leads to losses to the government.

5) There should be serious efforts to severely restrict executive compensation at any companies that directly benefit from the bailout."

The Chinese on in....

[GG]

http://finance.yahoo.com/expert/article/yourlife/109609;_ylt=AihYXGa_2tf9PJDeCl.2G0S7YWsA


Ben Stein, How Not to Ruin Your Life

Everything You Wanted to Know About the Credit Crisis But Were Afraid to Ask


The headlines scream doom. There are endless references to the economic situation being "the worst since The Great Depression." Immense names in finance have collapsed and sunk beneath the waves of the financial crisis. Please allow me to try to explain a bit of what's going on.

First of all, all you have to do is look around you to see that in terms of daily life, we are not anywhere near The Great Depression. Unemployment is barely about six percent. It was 25 percent at the nadir of The Great Depression. Real per capita incomes adjusted for inflation are at least five times what they were during The Great Depression. Airplanes are full. High-end restaurants are full. Prices are painfully high for food. These are not signs of a Great Depression.

On the other hand, the losses in financial products have been devastating. The Dow is off 23 percent from its high in 2007. Financial stocks even after the recent rally are off staggeringly. The biggest insurer in America has become a basket case.
Most of all, there is REAL FEAR in the air. Decent, hard working people are terribly afraid as they see their life savings melt away. Retirement has become just a forlorn dream for tens of millions of Americans.

How did it happen?

Here s one big part of the answer. First, the alert reader will notice that Ben Stein said many times that the amount of money at risk in the subprime meltdown was just not enough to sink an economy of this size. And I was right...to a point. The amount of subprime that defaulted was at most - after recovery in liquidation - about $250 billion. A huge sum but not enough to torpedo the US economy.

The crisis occurred (to greatly oversimplify) because the financial system allowed entities to place bets on whether or not those mortgages would ever be paid. You didn't have to own a mortgage to make the bets. These bets, called Credit Default Swaps, are complex. But in a nutshell, they allow someone to profit immensely - staggeringly - if large numbers of subprime mortgages are not paid off and go into default.

The profit can be wildly out of proportion to the real amount of defaults, because speculators can push down the price of instruments tied to the subprime mortgages far beyond what the real rates of loss have been. As I said, the profits here can be beyond imagining. (In fact, they can be so large that one might well wonder if the whole subprime fiasco was not set up just to allow speculators to profit wildly on its collapse...)

These Credit Default Swaps have been written (as insurance is written) as private contracts. There is nil government regulation of them. Who writes these policies? Banks. Investment banks. Insurance companies. They now owe the buyers of these Credit Default Swaps on junk mortgage debt trillions of dollars. It is this liability that is the bottomless pit of liability for the financial institutions of America.

Because these giant financial companies never dreamed that the subprime mortgage securities could fall as far as they did, they did not enter a potential liability for these CDS policies anywhere near their true liability - which again, is virtually bottomless. They do not have a countervailing asset to pay off the liability.

This is what your humble servant, moi, missed. This is what all of the big investment banks and banks and insurance companies missed. This is what the federal government totally and utterly missed. This is what the truly brilliant speculators in these instruments did not miss. They could insure a liability they could also create and control. It is as if they could insure a Cadillac for its value upon theft - but they could control what the value the insurer had to pay off was. The insurer thought it might be fifty thousand dollars - but it was manipulated into being two million.

This is the whirlpool sucking down finance.

Now, we are about to have a similar phenomenon happen with commercial mortgage debt, debt from mergers and acquisitions, credit card debt, and car loan debt. Many trillions of dollars in Credit Default Swaps have been sold on all of this, and the prices of all of them have fallen and can be made to fall more.

As I said, the pit of loss is bottomless. Warren Buffett, the smartest man of all time in the world of finance, has called financial derivatives - of which Credit Default Swaps are a prime example - "weapons of financial mass destruction." And so they are. As with the hydrogen bomb, no one thought they would ever be used to end the world. But unless someone figures a way out - and maybe the new RTC is and maybe it isn't - we are in real peril. This should never have happened. Now that it did happen, should the taxpayer pay to make the billionaire speculators whole on their bets? What the heck is to be done?

[shadows]

In 29' the broker firms had the stocks in their names like is being done today.   One could buy stock one day and make a profit by selling it the next day.

Europe was in a deep recession like it is today.

The banks had overextended their loan capacity like they have today.

When the runs started on the banks and lending agencies by their depositors and they closed their doors forever.

Those who stayed open paid as little as 3 cents for every dollar on deposit.  

Property values fell as the mortgagee's could not make their payments and walked off from them.  

Hitler was taking the advantage of the recession and united the German people over Europe's money crisis.

Many American manufacturers close at the starting of the 30' and the jobs lay on their floor until 38'.when we started mobilization for W11.

In the Midwest the great dust storms liken the past ice storms was to devastate this country.

A bailout of a few trillion dollars, if China will extend our credit for more paper to print dollars on, we can double time the presses possibly.

The bust to the failure of the Roman Empire duplicates our extending the supply lines beyond the capability of the people of the American Empire.

The migrations of the "Grapes of Wrath" are on the horizon as the dollar that once was worth two euros now is quoted as one half dollar in value.

How can we solve this problem in the today's world which we are loosing face in very rapid?

[Breadburner]

I'm going to get up and go to work in the morning.....

[waterboy]

In the old Tulsa phonebooks, next to the names were the occupations of the residents. My home in 1929 was owned by a married man whose listed occupation was "Investment Banker". In 1930 the phone book listed the resident as "widow". Draw your own conclusion.

People were truly worried about the future of the country at that point just as we are now.