There is now little doubt this is the biggest financial crisis since the depression

[RedEarth]

There is now little doubt …
Posted on Wednesday, November 19th, 2008

By bsetser

This is the biggest financial crisis since the depression:

The stock market is way down (graph from Calculated Risk). And, as we all know, home prices are also down.

Doubts remain about the health of key financial institutions — in large part because they extended a lot of credit against homes and kept far more of that credit on their balance sheets than most analysts expected (and certainly seem to have been more exposed than their regulators realized).

Many emerging economies that previously borrowed a lot now cannot borrow. They will have to cut back. That includes previously high-flying emerging economies like Dubai.

Unsold goods are piling up outside US ports. Expensive ones too. Deflation has replaced inflation as a concern.

Economic activity is slowing globally — and the risk is that will slow more.

Let me give credit to Dr. Roubini (my former boss) for holding firm to his conviction that vulnerabilities were building even as it seemed, at least for a while, that the US economy would be able to shrug off a fall in investment in new homes.

http://blogs.cfr.org/setser/2008/11/19/there-is-now-little-doubt/

graph from Calculated Risk......

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.

Interesting times ...

http://calculatedrisk.blogspot.com/2008/11/four-bad-bears.html

[nadinbrzezinski]

1. Hold it, but everybody is just imagining this

:sarcasm:

[girl gone mad]

4. I just saw Gene Simmons on Countdown..

saying that if the media would stop reporting all the bad news, everything would be okay.

:rofl:

[DJ13]

6. Did he spit up blood when he said that?

[Raschel]

8. People are STILL saying that? Even now?

Geeze, I thought it was bad when Hannity said it a couple of months ago.

[nadinbrzezinski]

14. Since I have this person on ignore have no clue what she]he said

[barb162]

32. I saw a jerk implying the same yesterday on PBS n/t

[Hannah Bell]

26. gene is rich.

[daggahead]

16. Oh geez ... aren't we a bunch of whiners!

:sarcasm:

[barb162]

33. LOL n/t

[Fed_Up_Grammy]

2. I'll believe we're in a depression when I see the lines disappear

at Dunkin Donuts.

When folks start brewing their own coffee and putting it in a thermos then I'll start worrying.

I'm not trying to be cavalier about this---I've just lived a long time and seen good times and bad times.

[nadinbrzezinski]

3. You should start worrying

by the way during the Great Depression people who still could afford it went to restaurants

Now I will not call it a depression until we cross a certain technical point, We are still in a recession.

By the way... this silly technical point has to do with reduction of GNP per year + unemployment numbers

We may be heading into that TECHNICAL point if the big three fail.

[stillcool]

7. maybe you'll start worrying..

when you can no longer afford to brew your own coffee? I'm so glad you've had a nice life. Wouldn't you like others to experience the same?

[Fed_Up_Grammy]

11. Me? Had a nice life? Born in 1932,sister in 1934,father died in

1938 and then there were the war years.

My children and grandchildren have never,ever done without as I did.

[Raschel]

9. I think that's why we're in this spot today. Too many people haven't seen really bad times,

and don't think they're really capable of happening anymore.

[Citizen Number 9]

12. Grammy, you must realize

that even during the Depression, 3 out of 4 people were still working and earning. Will you recognize we're there if on1y 1 out of 4 people disappear from the coffee line in your favorite Dunkin Donuts?

Actually, the line might even get longer if Starbucks keep closing.

[notesdev]

22. Longer lines at Dunkin Donuts may not be a good sign

Because they're scaling down from $6 coffee at Starbucks to $1.50 coffee at DD. A long time ago I knew that Starbucks was headed south, selling coffee at that price could not be sustained short of hyperinflation.

[Fed_Up_Grammy]

24. You're statistics are correct but the facts are iffy.

If that 3 out of 4 people had jobs most of them were just managing. A meal.or even a coffee outside the home was a very big deal for all but the rich.

[Citizen Number 9]

30. That was then...

this is now. Folks now have a hard time giving up their add-on to The Super Deluxe Cable Package.

I've watched broke employees, with a week to go until payday, hit up their coworkers for $4.00 for a latte when coffee is already provided in the break room.

[barb162]

18. I think some fast food places are starting to hurt

though I know the cars are still lined up, at least around here. I don't know if the lines are as long as they were a year ago. Starbucks isn't doing so well; I wonder if their customers are cutting back and going to DD instead.

[DJ13]

5. When the Coincil on Foreign Relations prints stuff like that

you know were screwed.

[Raschel]

10. Housing starts the lowest since records have been kept. Consumer

goods had the biggest drop in fifty years.

[Citizen Number 9]

13. I'm embarrassed for people when I hear them say

that we should see a turn early next year, in 2009. It looks to me like it will take at least 12 months, maybe 15 or 18 to just hit the bottom of the unemployment rate. Then, another 9 months or more to start working out of it. And that's being optimistic.

Actually, those estimates are based on previous downturns in the past and NONE of those had so many things stacked against quick recovery as we have now.

Please, anyone, feel free to chime in with something that will enable us to just *pop* out of this downward spiral. One thing. Anything.

[barb162]

19. There's no way we're "popping" out of this one.

[GoesTo11]

23. We could do a lot of public investment.

[Citizen Number 9]

28. How much is "a lot" of investment?

In round numbers, I mean.

Feel free to round it off to millions, or billions, or....

[GoesTo11]

29. 5 trillion.

About what Bush wasted on tax cuts for the rich and the Iraq war.

Sounds like it would be crazy and irresponsible to spend that much, but if we don't we'll just get a big depression and it will cost the country a lot more than that. Really.

[Citizen Number 9]

31. There was a big discussion about spending $700 Billion

I'll bet the discussion about spending $5 trillion will be even bigger.

[Morpheal]

15. BIGGER ECONOMIC PROBLEM BUT ONLY "SICK" PARANOIDS PREPARED FOR IT

Bigger, but not with the same effects.
Bigger in terms of fiscal impact, taking into account the whole economic system and globalization.
Bigger in terms of numbers of people affected.
Bigger in long term impact and as catalyst of change.

Also, bigger because the wiz in the White House and many others painted such an optimistic
picture of this decade, so persistently and convincingly, that many people were unprepared
for the events that are happening now.

What they have taught is economic optimism, belief, faith, not cynical "paranoia".
So the few sick paranoids out there prepared for the worst, believing it would happen.
Everyone else was healthy and prepared for the American dream to continue with
relatively small perturbations in the statistics. Steady growth, minor recessions, but
all in all growth and stability. Something to count on. Something to believe in.

Well, the paranoids have it.

I know that I myself was far from paranoid enough and I tend to be a cynic and a skeptic
by philosophical bent, anyway. (Comes from having been dragged into too many "situations".)

The "healthy" lost.

Robert Morpheal

[GliderGuider]

20. I don't even think sick paranoids are prepared for this one.

They might have seen it coming, but how do you prepare for something that could be as big as this? When you factor in Peak Oil, climate change, the loss of American manufacturing capacity and various encounters with the limits to growth in the world's food supply, a recovery from this event is by no means guaranteed.

[Indenturedebtor]

25. Yeah the Wife and I are not optimistic about the next 50 years if we live that long

We're afraid that our Generation will never have a chance to fix things. The King and Queen are old, drunk, and out of touch. Sadly I fear they'll ruin the kingdom before we ever get a chance to fix it.

[barb162]

17. Roubini is a great analyst. n/t

[notesdev]

21. Time to stop saying "since the Depression"

and time to start saying "since the panic of 1873".

This is going to be worse than the Depression. Get yourself a job with the government or in a recession-proof industry, it's your best chance to survive.

[GoesTo11]

27. That was from Nov 19, the good old days.

Market's down a lot since then.