Not to alarm anyone, but really the economy is going into a depression.

[Neshanic]

There is not enough cash to save everyone.

Oh about mid 2010 we should finally realize it's 1933.

[cliffordu]

1. Yep. I have believed that for about a year.

[Jack from Charlotte]

22. I'd say the middle of '09 we'll be.....

in big trouble. The 4th quarter numbers... Oct through Dec of '08 will be unseen since the 30's. IMO.

I worked on Wall Street in the late 70's and was a bond guy for years with three different Wall street firms.

That doesn't make my opinion a bit better than anyone else's but I've been watching this stuff for many years.

And BTW, I haven't heard one political analyst wonder about the timing of the "bailout" need all of a sudden back in late Sept. Don't you think Bush and the rest of the Moron Party did everything they could to conceal the magnitude of the financial problems? Of course. They tried to conceal until after the election but couldn't pull it off. This stuff should have been addressed months... or longer ago.

[cliffordu]

31. Yep. There should be firing squads assembled for the theives that perpetuated this.

[wroberts189]

88. one can only hope

[Blarch]

107. Yep.

and that includes the people who cast a vote for this shit in 2004.

[Neshanic]

32. Agree. Especially about the hoping till after the election to conceal the magnitude.

[nancyr]

2. You're right.

I share your feeling of doom.

[SammyWinstonJack]

3. How delightful.

x(

[Name removed]

10. Deleted message

Message removed by moderator. Click here to review the message board rules.

[sendero]

13. He might have been wrong then..

... but he's right now.

The odds of us NOT having a depression are in the single digits at this point.

[Neshanic]

17. Odd, you do not visit the Stock Market post, or my posts from a year and more ago about the economy.

[SammyWinstonJack]

52. I wasn't criticizing you, trust me. I meant "how delightful" the situation we find ourselves in and...

I should have added this :sarcasm:

[OwnedByFerrets]

28. Conflating much?? We are in for rough times in the next few years....

anyone who thinks otherwise has their heads in the sand.

[alcibiades_mystery]

36. I have no doubt we are in for some rough times

It is, however, also true that Neshanic is usually wrong.

[Neshanic]

37. I am always happy to fullfill your desire of a boogey man.

[alcibiades_mystery]

39. What are you babbling about now?

:shrug:

[luvspeas]

4. Did you think you were the first to notice?

I don't mean to alarm anyone, but I was awakened from a sound sleep by a gigantic fireball up high in the air! Oh-and the sky was all this bluey color. scary!!!!

[uppityperson]

5. I keep hoping I am over cynical. k&r.

[Marrah_G]

6. I'm saving the little I can towards a big wood burning stove.

So I can cook the stuff I grow in the back yard.

After the wood stove I'll be saving to buy a shed to convert to a hen house.

This way when things get rough in the food/heat dept, hopefully it won't hurt quite as bad.

[arcadian]

15. We are thinking of getting chickens too.

Probably build a little lean-to for them, gotta be enclosed though.

[Marrah_G]

38. I was thinking of one of these:

http://www.homedepot.com/webapp/wcs/stores/servlet/ProductDisplay?storeId=10051&langId=-1&catalogId=10053&productId=100373648&N=10000003+500885+10401013

With a chicken wire fence enclosure.

[MaryEllen9399]

7. my husabnd and aren't going to survive if a depression hits nt

[Neshanic]

8. I do not think I will either, actually.

[Turbineguy]

9. Depression?

Alarm?

I'm changing professions. Banking. Now if you'll excuse me, I have to test drive my Bail-out Bentley.

[pscot]

11. Link, please

n/t

[Neshanic]

20. One of many. Oh and I will save you time...he's a NUT!

http://www.moneyandmarkets.com/why-washington-cannot-prevent-depression-27968

[Mme. Defarge]

30. Well, that was cheery.

[Turbineguy]

50. The news is better

if you get the paid version of the newsletter.

Be afraid, be greedy, send me your creditcard number.

[Sheets of Easter]

12. Don't mean to alarm anyone, but I am going to post something alarming.

[cali]

14. No one- but no one- on DU has a worse record of predictions than you.

and there are too many variables in the economic picture to make such a blanket prediction.

[Name removed]

19. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[Deja Q]

97. I WHOLLY agree - in that there are way too many variables.

[onenote]

16. So mid-2010 you are predicting the following:

Unemployment rate of 25%
Wages down 42% from peak.
Total U.S. economic output down by approximately 50 percent from peak.

Have I got that right?

[rcrush]

21. In 2 years its going to be Mad Max in the US.

I plan to join a roving gas gang.

[ProfessorGAC]

29. You'll Need A Mohawk

I can't pull off that look. So, i guess i'm doomed.
GAC

[John Q. Citizen]

41. You will need something like the guy in the copter had. He survived without a mohawk.

[ProfessorGAC]

44. Hey I Could Do That

Kachunk kachunk kachunk!

Thanks. I feel better.
GAC

[wroberts189]

91. just arm yourself and family ..mohawk not necessary n/t

[Name removed]

60. Deleted message

Message removed by moderator. Click here to review the message board rules.

[ProfessorGAC]

24. Nice Catch, onenote

There is ZERO evidence that the economy is so precipitously close to disaster.

There is a huge chasm between recessionary and depressionary.
The Professor

[Neshanic]

34. So what is your theory? The CNBC bottom is "near" or the 2010 we are in great shape?

[ProfessorGAC]

40. Are You Really Interested In Other People's Theories?

It seems you've made your mind up already.

Check the archives, neshanic. I've been saying this economy has been recessionary for 5 years, RIGHT HERE ON DU!

So, don't try to pin that "great shape" stuff on me. You will find proof of the exact opposite in dozens of my posts on economics.

The facts are clear. There is not insufficient cash to sustain the economy. If you look at the overall financial institutions' balance sheets (obtainable in the Statisticla Abstract of the United States) there is sufficient liquidity but it is widely spread over smaller corporate banks and the thousands of credit unions and community banks in the country. There is sufficient liquidity and capital to sustain an economy of our size.

The total liquidity plus capital exceeds the GDP by 16%. When the Japanese had their meltdown, that number wasn't 116% of GDP, it was under 80%. And even they didn't go into recession.

In 1933, that number was around 54%. We're more than 100% relative above that level, and the economy moves at a more steady pace because compared to then, it's a glacier, not a steamroller.

The theory is, that as the markets begin to take note that the gov't officials are DOING THEIR JOBS and we get the rules back in place and actually followed, the cash flow will stabilize, just like it did in 1994, and in 1939. Then the whole "liquidity" thing will be a non-issue.

As this vigilence causes less speculative wildness in the markets, the investors will begin looking for stability and will find it the most productive and efficient firms right here in the U.S. Productivity will rise, and prices will flatten due to greater supply in all microeconomic segments.

Confidence will return to the system and things will straigten out. This starts with confidence in the gov't and i think we now have a charismatic leader who the populace will, in preponderance, trust to do it right.

Competence is valued more by the American people than the last 7 years would suggest. Remember that in 2000, way more people wanted someone other than Silverspoon. He wasn't trusted then. And if not for 19 nutjobs in airplanes, he would have been ridden out of DC on a rail in 2004.

He has inspired ZERO confidence in the system in his nearly 8 years.

Functional and structural improvements need only work a little in order to improve things a lot if people are inspired to believe that gov't leadership knows what the right things to do are, and will do them.

From a purely data driven perspective, we are so far from the conditions that lead to depression that it makes this whole discussion silly.

It will be a rough recession for, i'm estimating, 18 months. The recovery will take about another 24.

If i'm wrong, you can tell me then. But, i've been right about these things well more often than i've been wrong.
GAC

[Neshanic]

42. Yes I am, So you are for the following...

"It will be a rough recession for, i'm estimating, 18 months. The recovery will take about another 24."

I am not pinning anything on you, you pin yourself.

So do you believe the 18 month period you predict has started, or will in a another month or so?

[ProfessorGAC]

46. It's Started

My start point is September.

And i've pinned nothing on me. You're first reply to me asked if i was a CNBC "near bottom" or a everything's fine type. I'm neither but you attempted to pigeonhole me.

Then i gave you an honest reply as to what i think based upon my work.

Take it or leave it. I'm convinced that my analysis is sound.
GAC

[Neshanic]

51. Please elaborate on this. You are saying there is NO liquidity issue?

The facts are clear. There is not insufficient cash to sustain the economy. If you look at the overall financial institutions' balance sheets (obtainable in the Statisticla Abstract of the United States) there is sufficient liquidity but it is widely spread over smaller corporate banks and the thousands of credit unions and community banks in the country. There is sufficient liquidity and capital to sustain an economy of our size.

[Celebration]

54. How do explain this?

http://research.stlouisfed.org/fred2/series/BOGNONBR

Non-Borrowed Reserves of Depository Institutions (BILLIONS)

Date
2008-06-01 -122.316
2008-07-01 -123.492
2008-08-01 -187.305
2008-09-01 -332.750

Banks have been in a negative reserve situation since one year ago, when new FASB rules made them mark to market.

Then, there is AIG...........who apparently wrote TRILLIONS of dollars of credit default swaps, and apparently we have been told we HAVE to support these guys. We have been told to do so by the people who are supporting our budget deficit by buying our bonds. Think China, Japan, and Saudi Arabia.

The AIG capital situation isn't even included in the above.

Seriously, maybe you are looking at something different from me. I'd love to feel better about all this.

[ProfessorGAC]

59. Sorry, But You're Perspective Is Too Narrow

When thousands of small banks have liquidity equal to nearly 16% of GDP, there is not issue. AIG is nothing.

You asked how i explained it: My explanation is that your perspective is so narrow that you don't comprehend how huge the bankiong system is and what a small fraction it comprises of the much larger economy.

Look up the archives right here on DU. I've been right on what i've said for the last 5 years. Go ahead and check. I have no concerns.
The Professor

[Celebration]

72. small banks are part of the Federal Reserve, and part of the numbers

I don't get it. The St. Louis Fed produces aggregate numbers. Aggregate means small banks as well as big banks.

You aren't making logical sense.

You quoted numbers. I quoted numbers. And now you are doing platitudes?

This isn't about track records or even predictions. Aggregate bank reserves are negative, in a huge way, unlike what you suggest. And they are ALL BANKS.

I mean, as for predictions, I hope to heck you are right, because the the best that can happen at this point is a terrible recession. And, I am praying for that.

But if your predictions are based on bank reserves, you better get your facts straight.

[ProfessorGAC]

77. My Facts Are Straight

The aggregated data shows no liquidity problem. What issues there are is a loss of liquidity concentrated in the large banks. The cash is there.

You have the data from the Fed. Compare those values to the values of liquidty v. capital v. GDP growth and money supply in the go-go 90's.

You'll see that there is no statistically significant difference.

If the big boys weren't in trouble, hardly anyone would notice the modest change in liquidity.

And, the fed numbers don't include credit unions. The CU's borrow from commerical CU's who borrow from commercial banks. Once those funds are part of CUNA, they are no longer counted by the Fed. Only the dollars on loan outside the system are part of the fed report. CUNA maintains the monitoring of the CAMEL scores for credit unions.

So, you are a little off base here.
GAC

[Celebration]

79. Yup, didn't include AIG either

The credit unions cannot make up for the hundreds of billions of dollars of aggregate negative reserves in the banking system.

Furthermore, credit unions aren't doing all that great.

http://austin.bizjournals.com/washington/stories/2008/11/10/story5.html

But none of this compares to AIGs trillions of dollars of credit default swaps, of course. Those tentacles reach far and wide into the international banking system, and you seem to completely ignore it.

[Neshanic]

81. I am sure he has donethe math on all that stuff, and it's a non-starter. Oh and the derivatives

too, plus the Option Adjustable Rate mortages hiding in the corner with the Alt-A mortgages that will be peaking in 2012.

But that's OK they have money. They are immune to all this. The resets will be no biggie.

[Hannah Bell]

103. What are the implications of loss of liquidity concentrated in large banks

(with sufficient liquidity in smaller institutions?), in your opinion?

[sendero]

56. Like many..

... you are confusing the basic survival of the banking system with that of the general economy.

Even if you believe that the banking system will pull through more or less intact, that does nothing to alleviate the consumer-driven dive we are taking here.

18 months is WILDLY optimistic.

[ProfessorGAC]

57. Then You're Wrong

I'm confusing nothing. I've been studying this subject, mathematically, for more than 25 years.

You know nothing.
GAC

[sendero]

61. We'll see...

.. smart guy.

[ProfessorGAC]

63. Check The Archives, Not-Smart Guy

.

[sendero]

64. whatever

whatever. bookmark this thread, I am.

[coalition_unwilling]

45. Thank you. I believe economists define a 'depression' as an

annual decline in Gross Domestic Product of >20%. A 'recession,' by contrast, is two or more quarters of negative growth. As economists use the terms, there is a huge gulf between a 'recession' and a 'depression'. I do think we're in for a severe recession, with unemployment rates reaching 15% before Obama and the Dems' Keynesian stimulus starts to turn things around. But a 'depression'? I find that a bit hard to swallow (albeit not as hard to swallow as back when I took Macro Economics in the early 80s).

[ProfessorGAC]

47. Well, I'm Far From A Conventionalist

I don't much care for the ocnventional definitions. That's why i've saying that this current economy has been recessionary for 5 years, because i don't accept the conventional definition.

It it feels like a recession, and shows behavior within the data of a recession, then it's a recession whether growth is negative or not. There is some value in comparing critical variables against prior years to see how the economy is performing versus what it could/should be.

So, i don't know that a GDP drop of that great is really necessary to call it a depression. But, i think there are fundamental structural events that must heppen to create such disasterous conditions, and we're not meeting any of those.

So, we'll be in recession for a while, and the recovery won't be sudden, but i don't buy depressionary warnings.

Apparently, neither do you.
GAC

[LanternWaste]

95. Question...

Question-- I'm aware of the technical definition of a Recession, how is your own definition markedly different?

(Just curious-- as you seem to know the discipline better than most here, and your perspective may broaden my own limited understanding of it a bit more...)

[Neshanic]

Yes, something like that.

[alfredo]

18. born poor, lived poor, will die poor. Nuttin new to me.

I can eat what grows on my lawn and in the woods. I will survive, and will do what I can to help my friends and family.

[Kolesar]

23. The best stock market rallies have been after the 40% bear market periods!

I saw it on PBS.

[CreekDog]

25. but don't be alarmed he says

seriously, do you read your own posts? :eyes:

[Ganja Ninja]

26. I'm going to start stocking my freezer with Republicans.

:smoke:

[RedLetterRev]

43. Meh

I hear they're 90% bullshit and 10% fat. Or do I have that backwards? Either way, their heads and their asses are interchangeable and they're wholly inedible.

[youthere]

101. Don't bother..they're too bitter.

[whosinpower]

27. A great realignment is occuring

There is no point in propping up a broken and completely corrupted system.

I would of said no to bank bailouts.
I would of said no to automakers bailouts.
If they are too big to fail....they are too big, period.

Money will not heal what ails us. And, for generations we have all learned to chase the almighty dollar, thinking that cash was king. We have made livelyhoods within this construct - so much that it is inconceivable to consider life without money. Perhaps it is time to think outside the box. The only way for that to happen on a national scale, is with a catastrophe - such as the economic downturn we face today.

I don't have the answers - only endless questions, but the incredible thing is that now we face hardships that are unthinkable to most. How we go forward to face these challenges will determine the futures of our grandchildren. This is an opportunity for our world leaders to come together globally and remake and create a construct that is finally fair. And while I am frightened to the core, I am also optimistic at the potential of the human race.

[Irish Girl]

114. The more people cling to outdated institutions, the more painful the transition will be

Money with usury (interest attached), non-stop consumerism, living on credit, taking more from the earth than giving back, and politics / media full of corruption ...

These are all unsustainable systems that are going to disintegrate because they are unsustainable. What will, however, make the transitional period difficult for many is everyone clinging to these outdated institutions by utilizing our limited remaining resources trying to salvage what's simply not salvageable at this point.

[earth mom]

33. * & Co and the Bankers have stolen all the taxpayers money. What else did we all expect?

:grr:

Check this out:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4439245

[specimenfred1984]

35. It can all be turned around with a few simple arrests

Arrest about 30 people: Cheney, Rumsfeld, Rice, Gonzales, Paulson, Powell and others and the U.S. markets, all of them, would instantly have credibility and stability. Then, appoint a special prosecutor for financial crimes, a special prosecutor for war crimes and a special prosecutor for hiring/employment crimes in the U.S. government.

The United States would be the beacon of freedom and achievement in the world.

[knitter4democracy]

48. Tell us Michiganders something we don't know.

:eyes:

[slackmaster]

49. Not everyone deserves to be saved

It's not going to be anything like 1933.

[TexasObserver]

53. Disagree. We're within 15% of the bottom of this market.

We'll see the bottom either this year or 2009.

By 2010, we'll be on the way to recovery.

By 2012, the DOW will be above 14,000 again.

[MercutioATC]

55. I think 14k by 2012 is a little optimistic, but I generally agree.

Things will get worse through 3rd-4th quarter of 2009 and then gradually begin to improve.

I believe it'll take 5-7 years to get us back to the equivalent of Dow 14k, though.

[leftofthedial]

58. not enough cash?

Just print more!

Give it to your rich friends. It'll make its way down.

[kayakjohnny]

62. Not to alarm anyone, but I'd just like to alarm anyone.

[bertman]

65. For what it's worth, Paul Nobel Laureate Krugman says it will be recession and it will

get worse before it gets better. Unemployment 8%. (That sounds low to me, but I'm just a general contractor).

Krugman echoes The Professor (or should it be vice versa?) saying the economy is strong enough to handle this without it becoming a depression.

Who you gonna believe, the guy with the Nobel, or Neshanic?

[lutefisk]

75. the guy with the Nobel. . . eom

[prioritymale]

66. If Unemployment stats are an indicator, you are correct

It just jumped to 6.5, that unemployment rate, that is. A figure not reached in many years. Let's hope for the best.

[Skittles]

67. yes it is

[roamer65]

68. It will be more than likely a "1982-style" worldwide recession.

I expect unemployment between 11 to 15 percent.


It will not be a deflationary depression because:

1. We are not shackled to a gold standard
2. We are going to hyperinflate the money supply, rather than decrease it by 1/3 as during the Great Depression.

NOTE: There definitely is a chance of a hyperinflationary depression, if we go way too far with fiscal and monetary stimulus.

[leeroysphitz]

69. "There is not enough cash to save everyone.:...

There never was. Nor was there ever supposed to be. It's called interest and the whole point of it was to keep 300 million hamsters running just as fast as they could on 300 million wheels.

Everything was going great until the Guinea Pigs in charge decided that they could have twice as many food pellets if everyone else were to run three times as fast...

[yodoobo]

70. have a little faith. Its going to be fine

Obama is looking out for us.

When everyone is singing the same tune and everyone agrees, its a sure sign that a bottom (or top) has been reached.

The dotcom bubble didn't break until everyone was convinced they would be millionaires by putting money in the market. The housing bubble didn't break until everyone was convinced that they had a buy a house or they would miss out.

This time, next year..the economy will be booming.

[Downtown Hound]

71. You have psychic powers?

If I had a dollar for every time I'd heard a doom and gloom prediction on DU I'd have enough to save America from this coming depression you are certain is going to happen.

[JCMach1]

73. Not 1933, but perhaps worse than 1982. Here in Dubai the market dropped another 8%

yesterday. The Real Estate market has ground to a halt. And this is in a country with perhaps the highest liquidity in the world...

Things are getting worse, quickly.

[OhioChick]

74. Ohio and Michigan have been in a Depression...

Everyone else is now catching up....

[glowing]

76. yes.

[sarcasmo]

78. Michigan is already in one, IMHO.

[Mari333]

96. lol the only jobs in my small town in MI are

truck stop hooker
mcdonalds

[sarcasmo]

98. Lot lizard is the name they prefer, LOL.

[Neshanic]

80. "Merrill chief sees severe global slowdown (comparable with the period after the 1929 crash)"

See post on latest breaking page...

I like how that is phrased, "period after the 1929 crash". Hmmm, what do you call that thing again? That time frame?

[scheming daemons]

82. No offense, Neshanic... but you really suck at the prediction business (link)

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=5662716&mesg_id=5662716

The logical end of the Democratic Party as we know it.
Edited on Thu Apr-24-08 09:20 AM by Neshanic

How does it end? By having two clones with the same policies run against each other. Also by having two people that love republicans. They mention a republican at least once a day, and in kind words. Powell is Obama's object of affection, as his performance at the UN reading a script must of put him over the edge. Hillary loves McCain, an old man fetish, a kind of Goldwater holdover.

When two boxes of cereal are the same, it's hard to make a choice.

When we have a candidate that returns to the roots of what the Democratic Party is, that being calling out republicans, not sucking up to corporations, standing up for the nickeled and dimed poor, and seriousness on ending the war now, then the transition will begin.

Now we have two identical people, who say identical things basically. The real world common working person issues are not seriuosly addressed.

It may take a loss of another Presidential contest to get this out of the system. The hurt just has not come home enough, but given the chance, a Republican can deliver it, they have never dissapointed in the past.

Now we are headed for a certain loser. Gains in the House and Senate, but as of now, it's McCains to lose. With our two nitwits we will be more than happy to oblige.

Be prepared for change, and not a pre-packed focus group change. The change that will occur will come from people that are tired and have had it, and will not allow people like Clinton and Obama on a stage and laugh them off it, let alone run for president, The New Democratic party will come from people who will not be afraid to say the things that need to be said without how that will affect their corporate pals running in a loop in the back of their minds.

We will lose in November. That's a fact. Then, maybe then, the real change begins.

Oh, and the Obamists, please spare me the shit. Your guy is so corporate, it's sickening.

Given your track record.... I'm buying stocks NOW.

[Neshanic]

83. Well we will see won't we? Well if you can keep up with the internet bill.

Many will be back on dial-upbefore this is over.

[scheming daemons]

84. If you can point to any DU prediction you've made that came true, then maybe I'd

consider what you said more seriously.

I imagine that, with your record, you are due to get one right.


I'm hoping it is not this one.

;-)

[Neshanic]

85. You better start posting on all the other "things to come" posts to correct them too.

[scheming daemons]

86. I consider each on their merits.... what's their track record?

For the past several months, you've misread the primary electorate, the general election electorate, Barack Obama, the Obama campaign, the GOP and their campaigns....

You've been completely tone-deaf to what was going on this country - at least with respect to politics.


Now.... you tell us we're entering a "depression". Forgive me if I take your prediction with a grain of salt.

[Neshanic]

89. Are you a bookie?

[redqueen]

87. Is that supposed to be comedy? (nt)

[Neshanic]

90. Ah, my retinue of devotees continues....

[redqueen]

92. "not to alarm"... "going into a depression"

Just seemed like it might be comedy, that's all.

[HiFructosePronSyrup]

93. Are you reading ancient Mayan glyphs again?

[LanternWaste]

94. I think the correct term of our current state of affairs...

I think the correct term of our current state of affairs is more a Recession rather than a Depression.


('Economics', by Paul Samuelson and William Nordhaus.)

[katty]

99. ahhh, it sure is, we're f*****

[Neshanic]

100. Interesting info from former Goldman Sachs chairman John Whitehead...

"I think (this slump will) be worse than the depression. We’re talking about reducing the credit of the United States of America, which is the backbone of the economic system. … I see nothing but large increases in the deficit, all of which are serving to decrease the credit standing of America. … I just want to get people thinking about this, and to realize this is a road to disaster. I’ve always been a positive person and optimistic, but I don’t see a solution here."

Maybe he's scaring us to give more money to his pals. Who knows?

[KillCapitalism]

102. If job losses keep accelerating then it will be a depression.

Consumer spending accounts for around 2/3 of economuc output.

Jobs are being lost by the thousands, or maybe even the tens of thousands per day. If unemployment exceeds 25% we will probably slide into a depression. I think it will go higher, I could realisticly see 40-50% unemployment.

[Hannah Bell]

104. *exceeds* 25% ? That was the rate at the *height* of the great depression.

and in those days, more people had family on farms to do home to, woods to live in, etc. my family let people camp on their land.

try that nowadays.

[KillCapitalism]

108. Oh I think it could easily exceed 25%

The main reason it didn't exceed 25% back then was due to the fact that we actually used to manufacture stuff here.

[Hannah Bell]

109. you misunderstood my point. you said:

"If unemployment exceeds 25% we will probably slide into a depression."


my point is, "depression" would arrive before 25%.

[Warren Stupidity]

112. which is an excellent point

Our workforce is quite different from that of the 30's, or even that of the recessions of the 70's and 80's, and the social benefit programs that are supposed to sustain us in a major recession, particularly unemployment compensation, have been deliberately allowed to deteriorate. Inflation and a changing workforce have drastically reduced the number of workers covered by unemployment insurance and the level of compensation for those who are covered.

[KillCapitalism]

113. Yeah, guess I misunderstood, sorry about that.

At what rate would you say the depression would begin? I would say maybe 17% or so.

[Hubert Flottz]

105. Yes it is and yes it was the neoCon's plan all along.

The more completely they can destroy this country, the easier it will be for Poppy Bush's "New World Order" to become a reality.

Watch...

http://www.youtube.com/watch?v=Rc7i0wCFf8g

Poppy praises the UN here, but the Bush Klan have fought and lied to the UN every step of the way.

[shadowknows69]

106. Oh yeah, and the bad times start at your local shopping mall

Right about now.

[GliderGuider]

110. Exacerbating factors

The current discussion utterly fails to take into account the rapidly worsening global energy situation (aka Peak Oil) and the consequences that the draining of the financial capital pool will have for our ability to bring oil alternatives on-line in time. Without oil or a substitute, economic activity will be constrained by both financial and energy shortages, rather than just one or the other. Most energy substitutes that have the scalability to meet the challenge (e.g. a switch to electric cars and electric rail) require serious capital to fund the infrastructure build-out, and capital is in shorter supply every day. The is double whammy of oil shortages and capital shortages could even result in a worsening of global warming if we switch to cheap coal rather than expensive renewables to replace our declining oil supplies. We have at most 5 years to address this situation. At this time there aren't even any coherent plans in place and money is rapidly becoming scarce.

Then there's the global food situation that is being exacerbated by climate change (which is causing worsening droughts and floods), the rising cost of fertilizer and the depletion of irrigation water. The global economic recession will have amplifying consequences for regional food shortages, since lower economic activity and the implosion of global credit markets will have a braking effect on donations for international food aid. This is already happening to Zimbabwe. If a region's food supply declines, so does its economic capacity, as an underfed workforce is much less productive. That in turn makes the recession or depression worse.

All these factors will work together over the next two to five years, and the interaction has the potential of creating a level of global distress that is an order of magnitude worse than a simple recession, no matter whether it looks like a V, a U or an L.

This is a serious shitstorm we're facing. I expect the situation to transition from recession to depression rather suddenly, though I don't know when. What I've read over the last four years has led me to the conclusion that that by the end of 2010 we'll probably be in the first year of a global depression, one that could last several decades due to worsening energy shortages and the rising relative cost of raw materials. In fact it's entirely possible that the situation by 2020 could be the new normal -- the words "recession" and "depression" imply recovery, which IMO is not at all guaranteed in this situation.

[sendero]

111. I laugh out loud..

... at the morons who think there is mathematical formula that will describe our current situation.

They are just like 90% of the "economists" who just 6 months ago weren't sure we were going into even a recession.

They are like the "quants" who figured out how to create fancy derivatives that increased yields 30-40 basis points, but couldn't figure out what would happen when the housing price bubble burst.

It's like some kind of savant autism.