US economy shrinks as IMF warns of Great Depression

[inanna]

Source: AFP via Yahoo

WASHINGTON (AFP) - The US economy shrank in the third quarter, official data confirmed Tuesday, as the IMF's top economist warned of a second Great Depression offering no respite from relentless gloom ahead of Christmas.

The abrupt 0.5-percent contraction of gross domestic product (GDP) in the world's largest economy was seen as marking the start of a steep downturn for the United States after GPD growth of 2.8 percent in the second quarter.

<snip>

"This report is largely old news," said John Ryding at RDQ Economics, who forecast fourth-quarter data out next month would be far bleaker.

"Given signs that the recession has deepened in the current quarter, we look for around a 6.0 percent drop in real GDP," he said.


Read more: http://ca.news.yahoo.com/s/afp/081223/business/finance_economy_world

[Name removed]

1. Deleted message

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

[DixieBlue]

2. It's hard not to feel like reality right now is being written by a modern Dickens.

Bleak, bleak, bleak everywhere you turn. It's hard to see any light in the middle of this mess. The fact that people who stole one, possibly two, elections have destroyed this nation and that they likely will never get their comeuppance makes me sick.

[The Stranger]

38. I'm sure glad the Pelosi Traitor covered for the Junta all these years.

Not only did she ensure the ongoing obliteration of freedom democracy, she let them rape the nation's coffers and fuck everyone into a Depression.

[sarcasmo]

3. Welcome to our world here in Michigan. The MSM won't call it a Depression until

January 21st.

[blue_onyx]

4. Yep...just like they waited...

to acknowledge the recession until after the election (a year late)

[tom_paine]

15. The usual pattern of Totalitarian M$Ms the world over. Ours is a laughingstock when compared to

Free Nations, but compared to our fellow Third World Nations, our media is pretty good.

It's all in how you look at it... :rofl:

[sarcasmo]

17. Our media is better than Third World Nations, but our country is inching closer to Third World

Status.

[depakid]

18. Which is why it just blows me away when otherwise progressive folks

oppose reinstateing responsible media regulations like the Fairness Doctrine(s), personal attack rules and equal time provisions among others).

My guess is that most haven't spent enough time abroad in other western nations to know how better (more accurate, comprehensive and bullshit resistent) mosr people's media is.

America is very much the exception- and an egregious exception at that. So much so that people in other nations have no conception of just how bad the American corporate media is until they come to the states and see and hear it for themselves.

[pattmarty]

5. If the IMF is saying this (as we all know, it ain't the most leftist............

.......organization in the world) we are in big fucking trouble.

[Baby Snooks]

9. Never fear...

Never fear. Nancy Pelosi and her taxpayer ATM are here. We need to just tighten our belts. While she gives all our money away. As fast as the Treasury can print it. She is the worst of the lot at this point. Coming in right behind her are those in San Francisco who voted for her. But of course they believe the answer to dealing with the homeless is to just arrest them and throw them in jail. Read the story of Sodom and Gomorrah. San Francisco is indeed the modern Sodom and Gomorrah.

[depakid]

11. Actually, the IMF is noteworthy for overly grim prognostications

after which they swoop in and strong arm "structural adjustments" like privatization and draconian cuts in social services in return for loans.

Based on their record and past behaviors, I'd take most anything that outfit states with a big grain of salt.

[pattmarty]

14. Did you see the latest from Krugman?

[depakid]

16. Yep- he sees an upward trend begining in Q4 2009

Whatever the new administration does, we’re in for months, perhaps even a year, of economic hell. After that, things should get better, as President Obama’s stimulus plan — O.K., I’m told that the politically correct term is now “economic recovery plan” — begins to gain traction. Late next year the economy should begin to stabilize, and I’m fairly optimistic about 2010.

http://www.nytimes.com/2008/12/22/opinion/22krugman.html?scp=2&sq=krugman%20bubbles&st=cse

It's also interesting to note from the article that he seems (obliquely) to have changed his position somewhat on globalization- usuing words that sound more like a fair trader, than a long time proponent of so called "free" trade.

[The_Casual_Observer]

6. If oil stays cheap the economy will improve. My theory is that the

steep downturn was really due to the hangover from peak oil prices of 6 months ago, tho nobody else is talking about it.

[sarcasmo]

8. Living in Michigan and applying against 250-500 people for a job, I just can't see

Where or how our situation will improve.

[Dreamer Tatum]

10. Good post

I agree. If fuel prices stay low, and IF credit starts to loosen in 2009, the recession won't last
more than another year or so.

[sarcasmo]

22. Recession, it is far beyond a recession. You don't live in Michigan or Ohio, am I correct?

It will be called a Depression as of January 21st.

[Dreamer Tatum]

24. It will be called a Depression when real GDP falls 10% or more nt

[sarcasmo]

25. It will be called a Depression during Obama's first term.

[Dreamer Tatum]

26. If real GDP falls 10% or more since the onset of the recession, yes.

Deal in facts. You'll be less angry.

[sarcasmo]

27. I am not angry, it's reality. No job creation and no money equals Depression.

Your GDP, means nothing, we are creating no jobs. Unemployment is close to ten on the book and twenty in reality. Twenty percent unemployment in Michigan is Depression numbers. Reality doesn't equal angry.

[Dreamer Tatum]

28. A Depression has a technical meaning.

The unemployment rate isn't that close to 10%, and I'd like to see any objective proof you have that unemployment is 20% in reality.

It may well push 10% in the coming months, but I don't think it'll cross 10%. I think the economy will start to rebound in the late first quarter, and unemployment will start to fall toward the end of the second quarter.

[sarcasmo]

29. In Michigan the unemployment rate is 9.5 on the books and with all the people who can't

find work and have fallen off the books or have given up looking for work, makes the reality 20percent. I will bookmark this thread so I can say I told you so when the unemployment rate for the country hits over ten percent next fall.

[Dreamer Tatum]

31. I have no doubt you'll do that nt

[tama]

34. Depression (wikipedia)

"Considered a rare but extreme form of recession, a depression is characterized by abnormal increases in unemployment, restriction of credit, shrinking output and investment, numerous bankruptcies, reduced amounts of trade and commerce, as well as highly volatile relative currency value fluctuations, mostly devaluations. Price deflation or hyperinflation are also common elements of a depression."

"There is no widely agreed definition for a depression, even though some have been proposed. In the United States the National Bureau of Economic Research determines contractions and expansions in the business cycle, but does not declare depressions.<1>

A proposed definition for depression is a sustained recessionary period in which the population is forced to dispose of tangible assets to fund every day living, as was seen in the US and in Germany in the 1930s."

Blather aside, I know depression, having lived through one already. And yes, this is depression. Global one. Either the Ultimate or Penultimate one...

[Baby Snooks]

12. Where did you study economics?

You must have studied economics at the George W Bush School of Village Idiot Economics. The price of oil was artificially inflated to generate more cash for the crooks. And the crooks managed to lose what they made because of course they invested in other sectors which were artificially inflated by someone else. The crooks did themselves in. Just ask Bernie Madoff. He did well liquidating everyone's investments and playing the roulette wheel of the deregulated markets. And suddenly it was all gone.

The price of oil "self-adjusted" not that long ago but has been deflated because of the market itself. Even at $1.50 a gallon a growing number of Americans cannot afford it. Just the same, what goes down will go up. At $40 a barrel there will be limited exploration and development and so at some point the reality of peak oil will finally hit. And prices will go up. Way up. And the Republicans will probably be back in power and blame the Democrats. Oil and the products it produces are going to go up. Way up. That's the dark lining of the current deflation of oil prices. Not the silver lining.

Apparently you haven't been to a grocery store. Prices are going up. Not down. They are not being artificially inflated. They are being inflated by the inability of the crooks to borrow money to cook their books. Even the grocers are crooks. They will probably ask Madame Speaker for a bail-out as well. But don't expect prices to go down.

So much for oligarchy. And so much for the economic theory of crooks.

When there is a depression, deflation in one sector is often confusingly countered by inflation in another.

Maybe you drive a Hummer and think Happy Days are here again. They are not. And they ain't coming back for awhile. If at all.

[depakid]

20. ....

:tinfoilhat:

[sarcasmo]

23. Come to Michigan and tell me a Depression is tin foil.

[depakid]

30. No doubt

But there are reasons why the area is known as the "rust belt," most which have been going on for the better part of two decades.

If there's a silver lining in this to be seen, it's that a lot of the underlying causes might finally get the attention they're due- and be dealt with through a committment to responsible public policy.

[sarcasmo]

32. One can only dream.

[The_Casual_Observer]

36. Cheap oil = good economy. Always has.

[Selatius]

37. That's true, but cheap oil is no longer here to stay. That ended with the 1990s.

We're likely going to see a spike in gas prices once the economy rebounds. When credit becomes easy to obtain in the future, the oil futures market will become red hot for speculators. Then the US economy will be forced to fly with the heavy drag of high gas prices once again.

[L0oniX]

7. But we can still spend 700 billion a year for our military ...huh? WTF is wrong with this country?

We'd rather spend that money on killing than to take care of our own people and economy.

[Baby Snooks]

13. But war is profit!

And war is about all that's left in this country that is profitable. Which probably explains why Barack Obama decided to keep the Bush warhawks in place. Some of it will trickle down. The people who invest in the war machines will write checks to the charities so the rest of us can stand in line at the soup kitchens. One of the largest philanthropic foundations in the country is the result of the profits of Halliburton. And the family that set up the foundation of course just keeps writing the checks. Ignoring the fact that it is blood money. Money made off of Vietnam. And the family's association with Halliburton. LBJ did well by Halliburton as well. I'd rather have the 58,000 American lives lost than the $58,000,000 the Johnson and Brown families have probably given away in their philanthropy funded by those 58,000 lives.

Our priorities in this country really as misplaced. As is the admiration of some who everone believes is philanthropic. Nothing philanthropic about blood money.

[Joanne98]

19. The IMF needs to shut up. It's none of their business!

[Neshanic]

21. I posted this possibility a while back, and what a furror! No way, impossible.

[GinaMaria]

33. At what point does this become a depression?

Do we need a certain percentage of the population unemployed? or the GDP falls to a certain number? Do we measure depression in the number of homeless? How is our current situation similar to that of the GD? I'm curious to hear what you all think is/are the indicator(s) for a depression.

[tama]

35. See post 34 n/t