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2008-11-03 Home Front Economy

Current Economic Crisis Worse than the Great Depression

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Posted by tipper 2008-11-03 02:55|| || Front Page|| [11132 views ] Top

#1 Hyperbole index just hit new highs.

Posted by Bright Pebbles 2008-11-03 05:40|| 2008-11-03 05:40|| Front Page Top

#2 Funny, all his graph lines look like hockey sticks.

Posted by no mo uro 2008-11-03 06:49|| 2008-11-03 06:49|| Front Page Top

#3 He wasn't, er, trying to sell something, was he?

"Investor beware! Only gold can protect you from the ravages of another Depression!"

Posted by eLarson 2008-11-03 07:18|| 2008-11-03 07:18|| Front Page Top

#4 While it seems hyperbolic, I would not be entirely dismissive. Bernanke and Paulsen, who are not stupid, were virtually terrified by what they saw coming. That bailout was not about protecting the minor fortunes of their buddies in the corporate stratosphere. Whether their fears were correct I do not know, but I am convinced they were real, and that they have a lot more information and background than I or virtually anyone else.

Posted by Glenmore 2008-11-03 08:06|| 2008-11-03 08:06|| Front Page Top

#5 Their fears are correct WRT the possibilities. What actually occurs will be in good part the result of actions taken by governments and the response from investors and consumers.

Posted by lotp 2008-11-03 08:20|| 2008-11-03 08:20|| Front Page Top

#6 Krassimir Petrov has received his Ph. D. in economics from the Ohio State University and currently teaches Macroeconomics, International Finance, and Econometrics at the American University in Bulgaria. He is looking for a career in Dubai or the U. A. E.

Capitalism it's, it's DOOMED. We're DOOMED I tell you, DOOMED! And Petrov will be soon bye writing out obits from his new posting in the UAE. Sniff, Sniff sniff.... I smell, Bulgaria? No, no, it's Putin, KGB.

Posted by Besoeker 2008-11-03 08:25|| 2008-11-03 08:25|| Front Page Top

#7 Nah, it's Bulgarian pessimism. The Bulgarians I know aren't really happy unless they have something to be depressed about.

Posted by lotp 2008-11-03 08:34|| 2008-11-03 08:34|| Front Page Top

#8 Since everyone makes a living off of the US economy their greatest fear should be a US becoming more like the EU.

Posted by swksvolFF 2008-11-03 09:36|| 2008-11-03 09:36|| Front Page Top

#9 ...US becoming more like the EU.

or Michigan. So how's all that union based welfare oriented nanny state political hack economy doing? Are people streaming in to the state to get a 'piece of the future'? There's the O'man future for the nation.

Posted by Procopius2k 2008-11-03 10:05|| 2008-11-03 10:05|| Front Page Top

#10 That may be somewhat pessimistic, but I do believe that we have been taken to the edge of disaster by corporate greed and ignorance. A great reckoning may be more accurate of a description than a depression. Credit and leverage have been misspent because if its low cost and relative ease of access compared to the past. Consumer debt is especially vile and pointless in nature, unsecured CC debt will be the next "bubble" and Yes, they will claim a bailout is needed for them also or it will surely be another GREAT DEPRESSION!!!!!

Posted by bigjim-ky 2008-11-03 10:14|| 2008-11-03 10:14|| Front Page Top

#11 bigjim-ky, you're close but it's not JUST corporate greed and ignorance. It's political greed and ignorance just as much, maybe more.

Posted by AlanC 2008-11-03 10:19|| 2008-11-03 10:19|| Front Page Top

#12 > That may be somewhat pessimistic, but I do believe that we have been taken to the edge of disaster by corporate greed and ignorance.

Wrong it's 100% government insanity. Greenspan thought that growth in debt = economic growth, he was wrong.

Posted by Bright Pebbles 2008-11-03 10:31|| 2008-11-03 10:31|| Front Page Top

#13 It's everybody. Bernanke & Paulson were terrified by bankers refusing to trust other bankers even over night. This is a moral crisis, not a financial one. Articles like this are a reflection of the moral weakness that is almost willing the crisis upon us. If this does turn out to be worse than the GD, it will be because we willed it to be so. I never really understood the true meaning of "the only thing we have to fear is fear itself" until early this October.

Posted by Nimble Spemble 2008-11-03 10:40|| 2008-11-03 10:40|| Front Page Top

#14 NS,

Wrong, if it does turn out to be worse than the Great Depression it will be because the growth in debt/malinvestment was bigger, AND the economic damage was hidden for longer (by allowing dodgy accounting) and removed slower (by corporate socialism TARP).

Will has very little to do with it. Economics is more like gravity than Jedi tricks.

Posted by Bright Pebbles 2008-11-03 11:56|| 2008-11-03 11:56|| Front Page Top

#15 I listened when my mom & dad (and grandparents) discussed the Great Depression, and the current "economic crisis" can't hold a candle. During the GD, foreclosures reached as much as 50%, not the current two to six percent in most places. Unemployment was 25% for most of the Depression, and under-employment was as great as 50%. Every aspect of society was hurting. The Dust Bowl crippled agriculture for ten years. The current retrenchment is the result of arrogance, greed, and corruption, both within the government and within the private sector. Bad laws led to bad financial decisions, compounded by the Fed trying to micromanage a $40-trillion economy by micromanaging the money supply. We STILL haven't addressed one of the most significant factors in today's economic collapse, the Community Reinvestment Act and its attendant legislation. Sarbanes/Oxley is another disaster for American business, and I'm sure there are dozens of others. The last thing we need right now is a socialist president.

Posted by Old Patriot">Old Patriot 2008-11-03 13:38|| http://oldpatriot.blogspot.com/]">[http://oldpatriot.blogspot.com/] 2008-11-03 13:38|| Front Page Top

#16 I really don't understand the waves of hyperventilation about this economic crisis, with words like greed, corruption, etc thrown around with abandon. Busts - like booms - are part of the business cycle, which contrary to the conventional wisdom, remains a part of all economies, communistic, socialistic, mercantilistic and capitalistic alike. The fundamental cause of this bust was not greed or corruption - it was irrational exuberance. Expectations got out of hand, just as they did during the internet, oil, railroad and other booms and busts. Those who committed crimes should certainly be punished, but they are not the fundamental reason for this bust. The real reason is that we are at the tail end of an over-exuberant boom - and it is only in hindsight that we see that there was over-exuberance.

Posted by Zhang Fei 2008-11-03 15:11|| http://timurileng.blogspot.com]">[http://timurileng.blogspot.com] 2008-11-03 15:11|| Front Page Top

#17 Unemployment in Kansas rose to 4.6%, no banks have failed and are in fact looking for borrowers. Cessna just broke ground on a multi million dollar plant, AAA bonds can be purchased on numerous school district. Now if we can get those wheat prices back up all is good.

Posted by bman 2008-11-03 16:20|| 2008-11-03 16:20|| Front Page Top

#18 ZF the greed and corruption has to do with the start, aka sub-prime mortgages.

It's no coincidence that sub-primes where pushed by Chris Dodd who got big buck deals from Countrywide. Follow the Fannie Freddie money and see how all those derivatives were invended with a wink and a nudge with Fed bailouts gauranteed.

Coruption and Greed abound.

Posted by AlanC 2008-11-03 16:22|| 2008-11-03 16:22|| Front Page Top

#19 It doesn't seem to matter what the facts are, people have it in their head that G.W.Bush has brought this pestilence upon us and made all the profit from it. A brilliant piece of propaganda from the left. So brilliant they are poised to have the authority to top it in spades. No sleazy KY racial pun intended.

Posted by bgijim-ky 2008-11-03 16:56|| 2008-11-03 16:56|| Front Page Top

#20 BP,

Wrong.

Will has everything to do with it. We have been in much more difficult straits since WWII. But there has never been such fear and irrationality. You clearly do not understand the importance of trust and confidence in keeping the wheels of commerce turning. The problems that will take this still mild economic downturn to a depression are moral. And I would include resorting to irrational "solutions" like corporate socialism as symptoms of that moral decay.

And I am sure we disagree about the cause of the crisis which I see to be the continuous easy money supplied by Greenspan/Bernanke since 1997 in an effort to avoid the consequences of each succeeding asset bubble, the last of which was real estate caused primarily by the disconnection of risk from reward through securitizatioon.

Posted by Nimble Spemble 2008-11-03 17:08|| 2008-11-03 17:08|| Front Page Top

#21 NS has nailed it regarding lending money at below the cost of doing so. Had Greenspan moved the interest rates 2-3% higher in 1997, or in 2003 or so, much (not all) of the current mess would never have occured, at least with regards to the housing mess.

The next bubbles to pop will be personal credit and the education industry. Both are so massively overvalued that they will crash heavily. Count on the education one getting worse when people lose interest (no pun intended) in using the tax-dodge donation loophole. Many private colleges in the U.S. will not survive the next ten years.

Posted by no mo uro 2008-11-03 17:41|| 2008-11-03 17:41|| Front Page Top

#22 it is only in hindsight that we see that there was over-exuberance Nope, many of us small-potatoes-people say this coming years ago, unlike the vast majority of economists. I knew something was awry when I read of seasonal farm laborers getting 0% down $350,000 mortgages. So I sold all my stock holdings in August 2007, something I had never before done. You don't need to be a weatherman to know way the wind blows.
The cited article attempts to predict the ultimate extent of the current crisis. The outcome remains to be seen. Recall during GD I that 3 years elapsed between the 1929 stock market crash and 1933 bank closures and FDR's bank holiday. The US Treasury & central banks all over are trying to manage the crisis to minimize damage. There is a lot at stake, and only in hindsight will we know how bad it will get & what remedies worked and what didn't.

Posted by Anguper Hupomosing9418 2008-11-03 21:04|| 2008-11-03 21:04|| Front Page Top

#23 October sales of US & Asian makers were ghastly. The best performer was Honda, which was down only 25%. Chrysler will most likely go under. If so, tens of thousands of jobs will be lost. GM could well be the next to go, along with even more jobs. Auto parts makers are the largest employers in seven states: Indiana, Michigan, Kentucky, Missouri, Ohio, South Carolina and Tennessee. Maybe the government can help by tightening emissions and fuel economy standards /mockery

Posted by Anguper Hupomosing9418 2008-11-03 22:17|| 2008-11-03 22:17|| Front Page Top

#24 depending on the vote outcome tomorrow, I prepared to put all my money in brownshirt fabric

Posted by Frank G">Frank G 2008-11-03 22:20|| 2008-11-03 22:20|| Front Page Top

#25 ION WAFF.com > BBC:EUROZONE ON THE VERGE OF A RECESSION, wid strong and steady declines in Manufacturing and Employment.

* RENSE/TOPIX > RUSSIA BLAMES US FOR FINANCIAL CRISIS.

Posted by JosephMendiola 2008-11-03 22:41|| 2008-11-03 22:41|| Front Page Top

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