Letters to the Editor
-
Beware of the hype!
So when you hear the phrase "since the Great Depression," you know it's time to tighten your belt, and maybe put off splurging on that next vacation
This talk of "since the Great Depression" is very bothersome, and also hyperbolic, since - economically speaking- we are no where near that economic nadir! Hence, it is quite irresponsible to continue dragging "Great Depression" lingo into the mix.
The Financial Times a couple weeks ago featured a graphic that compared all the great crises since the 1907 Bank Panic. The comparison was in terms of diminished economic activity("downturn"), given as a percentage from the most recent "norm". In that scale, the current crises registered at about "-16%" which was no where near that for the Great Depression at a whopping downer of (-84%).
The Savings and Loan debacle registered at (-29%) as I recall. So, if anything, it is THAT 1989 debacle that one should compare the current crisis too - and NOT the Depression.
I do realize, however, that we have a way to go. There are still all those monoline insurers out there (those who insured the bonds for the Big Boys that funded the collateralized debt obligations and SIVs, or "structured investment vehicles" - and of course, there are an estimated $44 TRILLION in credit default swaps lurking.
So sure, one could foresee a nightmare world where all those CDS come due and there's no trust in anyone, any institution to be responsible, and worldwide mass deflation strikes.
But I would guess the odds of that happening are less than a hundred to one right now. I believe the key here, and it is turly critical, is that the Fed is able to handle the credit crisis, while not allowing the dollar's value to "crash dive" and cause a run of investors to every other currency.
I think when the value of the euro gets to $2, it is time to start shitting bricks .....and growing your own crops, getting a generator etc.
-
Let's compare ourselves to West Europe now
Their economies are better; their currencies are stronger; their people are better off than Americans. They have good free education and health care plus at least four weeks of paid vacation and good affordable or free child care.
Their problems with immigrants get lots of publicity, but those problems are far smaller than our own struggles over immigration and minority status.
We are much closer to collapse than the Europeans, and we are at deeper in debt, more violent, less happy. What have they done differently since World War II? Answer: Europe took a more socialistic, more humane approach.
We have quite a long way to go just to catch up with France. This is true, no matter how much right wingers may be outraged to read it.
-
The Great Compression
There is a recession -- a Rich Guys Recession.
It's almost impossible for a guy to make a buck with hedge funds, real estate speculation, or any of the myriad of money transfer schemes that have been in force since the early 1980s.
Rich Guys now have it tough. Look at the Bear Sterns Guy -- he had to sell his previously valued $1 Billion dollar stock for a mere $62 million.
The Rich are getting Poorer -- but the Poor are getting richer! As you note unemployment is very low. Immigration is dwindling as Mexico recovers its economy. Labor should finally get a break as will all people making under $100,000.
I have simplified the American class system by powers of 10.
Poor: Makes under $100,000
Middle Class: Makes $100,000 - 1 Million
Rich: Makes more than $1 Million
People who make less than $100,00 are getting the best deal. Many have never been able to afford a home, and rent. Now homes are depreciating and they may finally be able to afford one.
Stocks are historically low and we've flushed out all the hedgers and arbitragers who suck off the cream and leave the dregs for the rest of us. Get into some small cap growth funds now and reap the benefits in 30 years.
-
Amateurish Journalism
This article is the classic "writer trying to gain attention through shock value" journalism. It's amateur at best, and more specifically, it's utter B.S. Don't worry folks, there is no "depression" coming. And if anything, it's articles like this one that are fueling the current fears of a "recession." Recessions and depressions are not caused by mysterious, "evil financial forces." They're caused simply by fear. For example, if I'm a major investor in stocks and the media tells me a recession is coming, I sell my stocks. Once me and several others start dumpig stocks, then everyone else follows like lemmings and dumps their stocks. This causes a downward spiral, fueled by fear, fueled by the media. Once stock markets go down, employers start tightening their belts and laying people off. People who are laid off then have less purchasing power. And the companies that laid them off in the first place, then have fewer customers. More layoffs, less buyers, more layoffs, it keeps going down. Recessions are caused by "each man trying to save himself," which causes us all to lose.
If the media told us today that the "recession is over," I guarantee it would actually be over. It's a self-fulfilling profecy. People would think, "Oh gee, now I can afford to buy stuff again," causing sellers to reap profits again, causing them to hire more employees. See the trend? Same would happen in the stock markets.
Folks, we are like lemmings. And we will all run and jump off whatever cliff the media tells us to. So if we are in a recession, we have no one to blame but ourselves. Oh yes, and a bunch of attention-seeking journalists.
-
What I dont get
I am in the safety net business of affordable housing so my views might be a tad to the left. It is clear to me that we have a president that needs some serious therapy to help him deal with reality. In 7 years this country has abandoned the economy, education and the majority of the population of this country. The cost of the war alone could pay for the needs of our children and the schools they attend. It is sad that i have to save box tops to support my kids school.
The oil execs come to Capital Hill for a spanking but no one dares take them on, and for what reason? If I ran my business and didn't invest in improvements to systems, ignored the future and werent creative in exploring new markets we would be out of business and i would not have a job. So in effect Bush was selected and he is the puppet for big money. And then there is "so what" cheney, could you find more of an arrogant bastard. We pay him and i am not sure if he ever goes to work.
We can no longer boast that we are the greatest country in the world when we have been bought out by overseas investors. We pay how much in interest payments a month?
So maybe in conclusion it is not the president that needs therapy, it is the people that voted for him and continue to support his policies and hollow head. damn is he stupid, what did he mention yesterday, Romanian ice cream is the best. We are in trouble and it will take years to get out of this mess.