Is the US Entering A Depression (Journal Link)

[Just Win]

USA Entering a Depression? Link = http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6962632/America-slides-deeper-into-depression-as-Wall-Street-revels.html


History repeating itself? President Obama has been accused
by some economists of making the same mistakes policymakers
in the US made in the Great Depression, which followed the
Wall Street crash of 1929, pictured Photo: AP

The home foreclosure guillotine usually drops a year or so after people lose their job, and exhaust their savings. The local sheriff will escort them out of the door, often with some sympathy –– just like the police in 1932, mostly Irish Catholics who tithed 1pc of their pay for soup kitchens.
Realtytrac says defaults and repossessions have been running at over 300,000 a month since February. One million American families lost their homes in the fourth quarter. Moody's Economy.com expects another 2.4m homes to go this year. Taken together, this looks awfully like Steinbeck's Grapes of Wrath.
Judges are finding ways to block evictions. One magistrate in Minnesota halted a case calling the creditor "harsh, repugnant, shocking and repulsive". We are not far from a de facto moratorium in some areas.
This is how it ended between 1932 and 1934, when half the US states declared moratoria or "Farm Holidays". Such flexibility innoculated America's democracy against the appeal of Red Unions and Coughlin Fascists. The home siezures are occurring despite frantic efforts by the Obama administration to delay the process

[NCVol]

Is the US Entering A Depression (Journal Link):

No, I'd say we've BEEN in depression for a couple years. 

But I do get a kick out of the rhetoric.  I remember a long series of threads less than two years ago where the conservatives figuratively screamed at me for claiming we were in a 'recession' - but of course that was while Bush was still in office and the election wasn't a done deal.  Now it's OK to use the DEpression word, for the first time since the last republican Great Depression.

A year ago, while the market was crashing, THAT was proof of Obama being a socialist and the all knowing all seeing Mr. Market weighing in with the only vote that mattered - stock prices!  Lots of graphs putting Obama speeches against the S&P 500 graph proving that his words were spooking the traders.  Of course, since then the market has rallied 60-70% off the lows, is HIGHER since his inauguration, and nobody respects the all knowing votes of Mr. Market any more as it relates to the economy and Obama's handling of it.   And for some reason, I haven't seen JW post ANY graphs lining up the breathtaking recovery in the stock prices with Obama economic initiatives.  Interesting..... 

Anyway, it's a pretty fascinating thing to see that what matters and the talking points change over time depending on what the desired spin is from the propagandists. 

[Just Win]

Is the US Entering A Depression (Journal Link):

No, I'd say we've BEEN in depression for a couple years.  

But I do get a kick out of the rhetoric.  I remember a long series of threads less than two years ago where the conservatives figuratively screamed at me for claiming we were in a 'recession' - but of course that was while Bush was still in office and the election wasn't a done deal.  Now it's OK to use the DEpression word, for the first time since the last republican Great Depression.

A year ago, while the market was crashing, THAT was proof of Obama being a socialist and the all knowing all seeing Mr. Market weighing in with the only vote that mattered - stock prices!  Lots of graphs putting Obama speeches against the S&P 500 graph proving that his words were spooking the traders.  Of course, since then the market has rallied 60-70% off the lows, is HIGHER since his inauguration, and nobody respects the all knowing votes of Mr. Market any more as it relates to the economy and Obama's handling of it.   And for some reason, I haven't seen JW post ANY graphs lining up the breathtaking recovery in the stock prices with Obama economic initiatives.  Interesting.....  

Anyway, it's a pretty fascinating thing to see that what matters and the talking points change over time depending on what the desired spin is from the propagandists.  

You have the board confused. In one thread you are telling us the economy is roaring back from the Fannie Mae and Freddie Mac debacles thanks to the immoral China-Debt generational debt transfer Stimulus Bill creating new jobs and saving countless jobs (how to you measure a saved job?) and now you are telling us the economy is tanking.  The liberal illogic is maddening to say the least. Which is it? I need a scorecard to keep up with you various positiions.

[KNOWLEDGE]

Is the US Entering A Depression (Journal Link):

No, I'd say we've BEEN in depression for a couple years. 

But I do get a kick out of the rhetoric.  I remember a long series of threads less than two years ago where the conservatives figuratively screamed at me for claiming we were in a 'recession' - but of course that was while Bush was still in office and the election wasn't a done deal.  Now it's OK to use the DEpression word, for the first time since the last republican Great Depression.

A year ago, while the market was crashing, THAT was proof of Obama being a socialist and the all knowing all seeing Mr. Market weighing in with the only vote that mattered - stock prices!  Lots of graphs putting Obama speeches against the S&P 500 graph proving that his words were spooking the traders.  Of course, since then the market has rallied 60-70% off the lows, is HIGHER since his inauguration, and nobody respects the all knowing votes of Mr. Market any more as it relates to the economy and Obama's handling of it.   And for some reason, I haven't seen JW post ANY graphs lining up the breathtaking recovery in the stock prices with Obama economic initiatives.  Interesting..... 

Anyway, it's a pretty fascinating thing to see that what matters and the talking points change over time depending on what the desired spin is from the propagandists. 

And this post is an excellent example of what you find "pretty fascinating."

[NCVol]

No, as usual your reading comprehension is lacking.  At best I've said the stimulus and the "bank bailouts for billionaire program," aka "socialism for the rich, capitalism for the masses," is preventing a full blown collapse into depression style bread lines.  But I've said repeatedly and consistently going nearly three years now that our economy has been destroyed - we've got a hollowed out industrial core that cannot support anything but a boom and bust bubble economy that has the sad effect of gutting the once great U.S. middle class and burying it in a sea of debt and transferring huge wealth to the top of the pyramid.  

I don't know about where your money is, but mine is betting on a further economic downturn with no end to the pain in sight.  I had a long debate over the holidays with my father in law about this.  He thinks the market and the economy will come back because it always does, which is true except when it doesn't.  Like the U.S. in the 1930s and Japan in the 1990s thru today.  The depression and the Japanese collapse were caused by a bubble then a bust in the credit markets, which is pretty much exactly what we have here.  So the question is do we get a decade or two of Japan stagnation, low growth but muddle along with stocks and the economy in a sort of narrow range but treading water, waiting for the economy to catch up and depending on "time" and some inflation to solve the debt issues, or do we have a collapse that wipes out the bad debt and the overpriced and overbuilt real estate sector and cleans the slate going forward.  Those I trust give each of those about an equal probability....  

[NCVol]

And this post is an excellent example of what you find "pretty fascinating."

Not sure what your point is, but if you have anything to add other than a drive by bashing me, we're all ears!  

Just to illustrate my point, I wonder why nobody has updated this graph?



Or this one?


http://servv89pn0aj.sn.sourcedns.com/~gbpprorg/obama/ObamaMarket.gif

[MRM]

My wife and I have been looking around some at houses. It's amazing to see how many are currently in foreclosure or about to enter foreclosure. If more are still to come, then we could be headed that way. But I see some things slowly turning around, so I doubt that will happen.

[NCVol]

There will be LOTS more foreclosures in the bubble areas, there just isn't any doubt about it.  The question is how that impacts the broader economy.

There is a daily great discussion of housing and related debt at calculatedrisk.com.  A couple of charts are below.  The first show how we've just gone thru a period of relative calm after the horrible "subprime" debacle.  Only problem is we're about to enter the option-ARM debacle, with loans resetting and causing payment shocks approaching levels we saw the last time the banking system failed, i.e. a couple years ago. 

http://www.calculatedriskblog.com/2010/01/option-arm-recast-update.html
http://1.bp.blogspot.com/_pMscxxELHEg/S0zEYEpaFyI/AAAAAAAAHPo/gLfcUyq6xJo/s320/AmherstOptionARM.jpg



This shows the percentage of loans that are upside down.  If you follow the link, over half of the option ARMs are in negative equity.

http://www.calculatedriskblog.com/2010/01/more-on-option-arms.html

http://1.bp.blogspot.com/_pMscxxELHEg/S00xAz8KnLI/AAAAAAAAHP4/HPqiw_ct_EU/s320/AmherstBalance.jpg



So huge numbers of borrowers with option ARMs are going to get hit with payment resets, and MOST of them are under water.  Who knows how many will walk away, but we KNOW that the people who chose option ARMS did so because that was the only way they could afford their house, for the short term.  The default rates will be huge.  What we don't know yet is the broader impact on banks or the economy. 

[Shimmy]

The US is becoming Europe.  It's what the socialists want and, by controlling the media, they have talked enough of the mindless fools who follow them into it.  But hey our quality of life will be much better and our health care will be supreme!!!  Becoming Europe is a depression for us.

[NCVol]

"Europe" is a big place, about 50 countries.  Are we becoming more like the manufacturing and export powerhouse Germany, or the low tax corporate haven and pharmaceutical company preferred location Ireland? Iceland was a grand experiment in the awesome power of the Friedman, low tax, low regulation, take the shackles off corporations and finance, privatization economy, until they imploded.  Or maybe we're becoming like Greece with a debt to GDP ratio of 200% or more like France with a much more benign level of public debt.  Or are you comparing us to the many members of the former Soviet bloc? 

Depression is depression, 20%+ real unemployment, deflation in prices of financial assets, housing, a collapse in spending and economic growth.  It's dishonest to compare that to the EU which has had per capita economic growth rates on par with the "free market" U.S. for the last few decades.  Read a little about California.  There will be hundreds of thousands figuratively thrown into the streets, with seniors losing access to the care that kept them at home, hundreds of thousands of kids losing healthcare, millions underwater in their homes, bankrupt, just waiting to get thrown out on the streets, where they will do what?  THAT is depression, not arguably slighly lower rates of economic growth. 

The difference between opportunities here and in "Europe" are more of degree than of kind, and most of us won't notice the difference in economic opportunity.  In fact, many countries in "Europe" have MUCH higher proportions of businesses in the form of small businesses.  We've become characterized by increasing amounts of consolidation of each industry into a small handful or less.  Name a U.S. industry that isn't dominated (>50%) in four or fewer players? 

What we do have is more of an opportunity to become rich on a the scale of kings, so that's something to look forward to for many of us! 

[Just Win]

The chart that will just not go away. All that China Debt generational transfer borrowing and still 10% unemployment. It simply can't be explained away.




PS - Please note the source of the data. It is not from some furitcake left wing nut case virus infested web site.

[NCVol]

What am I supposed to say about that chart. We had a federal budget based on an economic bubble and a hollowed out economy.  The bubble has burst, our economy has no capacity for quick recovery and therefore there are budget deficits as far out as the eye can see.  What would YOU cut to get the 1,500 billion shortfall balanced?  How much of the trillion that we spend on the military should we slash - a half?  How about medicare?  Oh yeah, you dumbshiates on the right said any cuts to medicare were death panels or something.  So you gonna cut SS which is still running an annual SURPLUS?  Huh, that won't work too well, since seniors rely on that to LIVE ON!  So where's it gonna be?  Transfers to states, already facing huge funding shortfalls of their own? 

Anyway, on a three item list, which ones should we cut to slash 1,500 billion? 

1)
2)
3)
 
I've got my "conservative" list. 
1) Waste
2) Fraud,
3) ACORN! aka "welfare" and money going to lazy poor people who with six unemployed for every job opening should have no problem getting a damn job if they want one. 

That should get us there