17 February 2009

Tomorrow's news?

Kudos to Sanshinseon for pointing this out.


sanshinseon said...

"The Greatest Depression" has a nice ring to it, no? It feels good that after all the boredom we're going to be part of something "greatest"...

Yup, commercial real estate is another shoe soon to drop. And unpayable credit-card debts is yet another. Probably a few more... China's real-estate and construction have started tanking. Western Europe's banks are in deep shit, the Euro don' look good. This whole mess has quite a ways worse to get, yet. It's getting just as bad as Dylan told us it's gonna be... :-) High water risin' everywhere -- everybody hold on to something...

Karlo said...

Does this guy know what he's talking about? You mean to tell me that the stories are false, those stories of the great CEO on high who, empowered by a tax-cut for the wealthy, will emerge from his yacht, face southward, and with a great wave of the hand restore American consumerism and re-light the smokestacks of American factories?

libhom said...

We are in a serious economic situation, and it is good to know what the worst case scenario is. However, there are reasons to think that this is not going to be a Depression, but a serious recession comparable to the ones after the Arab Oil Boycott and the Reagan tax cuts.

1) In terms of a serious economic downturn, we are in a situation similar to that of 1930. Yet, far more has been done to stimulate the economy than was done even in 1933, the first year of the New Deal. The tax cuts have been counterproductive, but the spending is quite beneficial.

2) The New Deal was responsible for getting the US half way out of the Depression. WWII was responsible for the other half. Economic intervention by the state can make a huge difference.

3) Skyrocketing oil prices were a major trigger of the downturn. Their collapse is already having some buffering effect on the downturn.

4) Part of economics is based on the psychology of confidence or lack thereof. Herbert Hoover's timidity in face of crisis played a major role in obliterating public confidence.

5) The Federal Reserve recently has changed credit card rules on late fees and other areas. The new rules for the bank are far more equitable than they were in 2008 and previously. They also have the effect of reducing the spiral of unpayable debt that so many consumers face.

Things aren't good or even mediocre, but there is no basis for thinking that the worst case scenarios will come true either.

Also, I would be very skeptical of this guy's advice to buy gold. We already are in a gold bubble.

sanshinseon said...

It's all very unpredictable by now, except that we know that the situation is worse than government leaders will ever admit or that most MSM sources will be willing to discuss.

There is a wide range between best case and worst-case scenarios now, and all the scenarios between them. IMHO, the outlook is on the dark side; government bungling over the past year has just made things worse (while further enriching the banksters), and things are likely to go closer to worst-case than best-case pathways. We are all in for some serious pain, except the wealthiest.

Gold is certainly in a bubble, but that's because the outlook is so bad, people everywhere are using it for its classic rule, the holder of value when all else fails. IMHO, it still has a fair ways upwards to go as the dollar, euro and yen all weaken. Place your own bets, and we shall see...

Check out this other video discussion among fairly conservative members of the American political and media elite:
"Brzezinski: preventing class warfare and riots"

"They must be really worried if they are talking about this."
Yup, i'll bet that they really are. They sure should be!

Karlo said...

I don't buy gold because I don't like what it does to the environment and I don't think it would be worth anything in a real road-warrior sort of melt-down. I figure the best thing to stock pile would be jars of refined sugar (most calories per cupboard space), if one were really worried about a complete economic collapse. As for the scenarios, I'm leaning toward the negative these days. Oil's low, but I don't think it can stay there since production costs will soon rise as countries are forced to tap more expensive oil. And I get the feeling that U.S. leadership has become so cynical and oriented to the wealthiest class that it's hard to establish anything that works. I'm a prime example of this. I've worked hard my entire life, have never taken a single dime from the government in terms of unemployment or other benefits, and am facing a retirement where I won't have any income and will probably have no healthcare. At the same time, the government will need to start charging me for the few things that used to be cheap or free in order to make up for the expanding debt. I should have done the sensible thing 20 years ago and moved to Thailand and hung out in a bungalo living off jack fruit and locally grown rice. I'd have the same amount of money that I have now and better health.

ddjango said...

i've seen several stories lately that advocate the hoarding of gold and BOOZE.

i think the latter has merit.

Karlo said...

Yes. Cask-strength Scotch will soon be the only currency that's recognized.

sanshinseon said...

That'd be a dysfunctional sysstem... Man, i'd sure "consume my capital" rather than save or barter for food...!

The NYT's Paul Krugman generally knows what he's talkin' bout, and is safely mainstream/left -- i myself trust his views, anyhoo -- he's been saying for months that this our econ outlook is scarier than the PTB will admit. See his latest:

libhom said...

sanshinseon: Krugman's analysis assumes that no major income redistribution to the middle class and the poor will happen during the recession. If things get bad enough, some kind of income redistribution downward will be inevitable, and that will make a big difference in getting us out of this.

The main thing now is for people to push for much, much more public works job creation, especially in areas with long term benefits for the economy, such as public transportation. Pushing for tax increases on the rich to fund jobs for the rest would really help end the recovery sooner too.

Karlo said...

I'd certainly vote for both of those proposals. I doubt that they'll happen, but I'm definitely for them.

sanshinseon said...

Yup, i'd support temporarily nationalizing the big banks AND income redistribution downward AND massive public-works job-creation esp in green energy / transportation tech/infrastructure. But i doubt that the wealthy and their right-wing noise-frontmen will allow any of those to occur. And doubt that Obama will push very hard for them anyway, unfortunately...

sanshinseon said...

Good ol' Frank Zappa in 1966 -- and how
incredibly appropriate for us today...:

Well I'm about to get sick
From watchin' my TV
Been checkin' out the news
Until my eyeballs fail to see
I mean to say that every day
Is just another rotten mess
And when it's gonna change, my friend
Is anybody's guess

So I'm watchin' and I'm waitin'
Hopin' for the best
Even think I'll go to prayin'
Every time I hear 'em sayin':
That there's no way to delay
that trouble comin' every day
No way to delay that trouble comin' every day

Karlo said...

Truly a theme song for the times!