Soros says deep recession inevitable, depression possible

[ben_meyers]

Source: Yahoo News

WASHINGTON (Reuters) – George Soros, chairman of Soros Fund Management, testified at a House Oversight and Government Reform Committee hearing on Thursday. Highlights:

* Said "a deep recession is now inevitable and the possibility of a depression cannot be ruled out."

* Said hedge funds were an integral part of the financial market bubble which now has burst.

* Said hedge funds will be "decimated" by the current financial crisis and forced to shrink their portfolios by 50-75 percent.

* Said Fed, Treasury Department and the SEC must accept responsibility to prevent market bubbles from growing too big in future.

Said impossible to prevent market bubbles from forming, but they can be kept within "tolerable bounds."

* Said financial engineering should be regulated and new products approved by regulators, and that such regulation should be a high priority of the new Obama administration.

* Said a recent IMF credit facility not large enough to stabilize markets.



Read more: http://news.yahoo.com/s/nm/20081113/bs_nm/us_soros_2

---

*Did not say, Many of my activities contributed to the global meltdown of the financial markets.

*Did not say, Possibly I manipulated the markets to help a particular candidate.

Oh ya, he's a bastard, but he is our bastard and we are now stuck with him.

[snappyturtle]

1. Do you thinking the shrinking of their portfolios by 50-75% will put any

of them on the streets or under an overpass where they belong?

[WriteDown]

2. Interesting stuff...nt.

[katty]

3. shit rolls downward

[Fire_Medic_Dave]

20. Is that trickle down suffering?

[Raschel]

4. Well those statements from him certainly aren't going to help the economy.

And he know this well. So that only means that it's coming no matter what.

[xchrom]

5. recommend

[CatholicEdHead]

6. Tomorrow's GOP talking points should use this to bash the Democratic Party

in the usual way.

[dixiegrrrrl]

7. Gee, a recession. Maybe a depression.

Ya think?

guess it's not "official" until there is a Congressional hearing.

[Myrina]

8. But nothing about CEO Salary/Compensation Caps ...

Gee, I'm so surprised.

[OhioChick]

9. Cleveland and Detroit have been in the shitter for years....

Now, everyone else is catching up.

[reggie the dog]

13. Toledo? Flint?

fuck the great lakes region went to the shitter in the eighties.

[Festivito]

15. That's because we make real US stuff. Real stuff died first.

Autos/Trucks started dying as Clinton boon turned to a Bush bust. Wages around the country were down, market was down, people held on to cars longer. After all, the quality was indeed up with cars.

The numbers looked good for the rest of the nation because they were riding on government borrowing, especially trade imbalance borrowing, and the home trade up bubble/borrowing.

New clothes, new electronics and new houses all from borrowing. And, the banks were borrowing on top of all that borrowing.

Finally, the borrowing structure became so thin that it started to crack, then ...

it fell.

I think we'll need manufacturing to help pull us back. Nearly all our manufacturing is GONE.

[OhioChick]

16. I completely agree with you. n/t

[RedEarth]

10. Whitehead sees slump worse than Depression

NEW YORK (Reuters) - The economy faces a slump deeper than the Great Depression and a growing deficit threatens the credit of the United States itself, former Goldman Sachs chairman John Whitehead, said at the Reuters Global Finance Summit on Wednesday.

Whitehead, 86, said the prospect of worsening consumer credit woes combined with an overtaxed federal government make him fear that the current slump is far from over.

"I think it would be worse than the depression," Whitehead said. "We're talking about reducing the credit of the United States of America, which is the backbone of the economic system." Whitehead encountered plenty of crises during his 38 years at the investment banking firm and was a young boy during the 1930s.

http://www.reuters.com/article/Finance08/idUSTRE4AB7HT2...

by CalculatedRisk on 11/12/2008 04:17:00 PM
From Bloomberg: Dimon Says Recession May Be Worse Than Credit Crisis

``We think the economy could be worse than the capital- markets crisis,'' Dimon said. ``You really need to separate them because they have completely different effects on our businesses and on most businesses.''
Not to be outdone, John Thain, chairman and chief executive of Merrill Lynch compared the current contraction to the Great Depression, from the Financial Times: Merrill chief sees severe global slowdown
“Right now, the US economy is contracting very rapidly. We are looking at a per­iod of global slowdown,” told investors. “This is not like 1987 or 1998 or 2001. The contraction going on is bigger than that. We will in fact look back to the 1929 period to see the kind of slow­down we’re seeing now.”
...
"There is no such thing as decoupling. ... Each individual economy will be more or less affected, depending on reliance on global trade and commerce.”

http://calculatedrisk.blogspot.com/2008/11/dimon-recess...

[NeoConsSuck]

17. Roubini paints an ominous picture also:

--The U.S. will experience its most severe recession since World War II, much worse and longer and deeper than even the 1974-1975 and 1980-1982 recessions. The recession will continue until at least the end of 2009 for a cumulative gross domestic product drop of over 4%; the unemployment rate will likely reach 9%. The U.S. consumer is shopped-out, saving less and debt-burdened: This will be the worst consumer recession in decades.

The prospect of a short and shallow six- to eight-month V-shaped recession is out of the window; a U-shaped 18- to 24-month recession is now a certainty, and the probability of a worse, multi-year L-shaped recession (as in Japan in the 1990s) is still small but rising. Even if the economy were to exit a recession by the end of 2009, the recovery could be so weak because of the impairment of the financial system and the credit mechanism that it may feel like a recession even if the economy is technically out of the recession.

--Obama will inherit an economic and financial mess worse than anything the U.S. has faced in decades: the most severe recession in 50 years; the worst financial and banking crisis since the Great Depression; a ballooning fiscal deficit that may be as high as a trillion dollars in 2009 and 2010;

http://www.forbes.com/opinions/2008/11/12/recession-glo...

[Tansy_Gold]

11. DUers say deep recession inevitable, depression possible and we've

been sayin' it for a looooooooooooooooooooooooooooooooooooooooooong time.


Where the hell you been, Mr. S?


Check out just about any Stock Market Watch thread here on DU over the past couple years.


sheesh.


Tansy Gold, looking for the shaking head in total disbelief and disgust icon

[reggie the dog]

14. Soros said this on French radio

at least a month ago.

[Tansy_Gold]

19. Tansy Gold said this on DU

at least a year ago. And I'm not an expert.

Soros, like Buffet and the rest of their ilk, is up in the .00001% and doesn't have a clue. Some of us in the reality-based reality have seen this coming for a very long time.



TG

[Boo Boo]

12. Wow, there's a news flash, eh? /nt

[BanTheGOP]

18. The depression was 100% caused by republicans...despite the warnings

There is absolutely NO doubt that the republicanist greed, degregulated trade practices had led to this depression that, from all indications, looks like it will surpass even the first depression from a percentage standpoint. The middle class will certainly peter out, with the vast majority of them falling into the lower middle class, while the lower middle class will hit bouts of poverty.

This could ALL have been avoided with aggressive regulation of the economic structure, including maximum wages, fair tax gradations, and corporate financial oversight (including policy set by boards of ordinary, caring citizens, NOT for-profit directors).

Without a doubt, we should be looking at the policies of the republican party and interjecting real criminal statutes against much of what the party has forced upon humanity. Without a doubt, the republican party has caused the global depression, and if we don't have the balls to decertify the republican party here in the states, hopefully we can take it to the World Court.

[Fire_Medic_Dave]

21. Yeah that's gonna happen, NOT.