Economy Caught in Depression, Not Recession: Rosenberg

[dtotire]

Economy Caught in Depression, Not Recession: Rosenberg

Published: Tuesday, 24 Aug 2010 | 11:23 AM

Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930s-style Depression, Gluskin Sheff economist David Rosenberg said Tuesday.

Writing in his daily briefing to investors, Rosenberg said the Great Depression also had its high points, with a series of positive GDP reports and sharp stock market gains.

But then as now, those signs of recovery were unsustainable and only provided a false sense of stability, said Rosenberg.

Rosenberg calls current economic conditions "a depression, and not just some garden-variety recession," and notes that any good news both during the initial 1929-33 recession and the one that began in 2008 triggered "euphoric response."

"Such is human nature and nobody can be blamed for trying to be optimistic; however, in the money management business, we have a fiduciary responsibility to be as realistic as possible about the outlook for the economy and the market at all times," he said.

The 1929-33 recession saw six quarterly bounces in GDP with an average gain of 8 percent, sending the stock market to a 50 percent rally in early 1930 as investors thought the worst had passed.

"False premise," Rosenberg said. "And guess what? We may well be reliving history here. If you're keeping score, we have recorded four quarterly advances in real GDP, and the average is only 3%.


more:
http://www.cnbc.com/id/38831550

[xchrom]

1. Recommend

[Donnachaidh]

2. finally someone is speaking the truth.

It's UGLY out there and is showing no signs of getting better. Reality bites - but it's helpful knowing that truthful voices are still working.

[inna]

3. depression for workers, recovery for corporations.

[raccoon]

4. I've always thought it would be a cold day in Dallas, TX, before any economist, pundit or politician

would use the "D" word.

Bad for morale, doncha know.

[RainDog]

5. not the first time I've heard someone say this

but it looks like more and more people are speaking the truth about the current economy.

THANKS, NAFTA!

[AndyA]

6. That's exactly right.

We need to dump NAFTA, because very obviously IT DOESN'T WORK FOR AMERICA.

When everything is equal, that's one thing. But it's not and our country has been paying the price for too long now.

[The Wizard]

7. The laws enacted and regulation

imposed to prevent what happened in the 1930s were removed at the behest of the Republican Congress. Bill Clinton had the option to veto, but sided with the Republicans for reasons yet unknown, maybe some attempt at triangulation. Greed overcame the Wall Street banksters and we all have to fork over tax dollars to keep the crooks rolling in cash.
The only ones who should have been bailed out were those losing their homes. That would have kept people in their homes and gone a long way to keeping the banks that made bad loans afloat.
As it stands now, more people are out of their homes with bailed out banks refusing to loan the money they got from the tax payers.
Maybe things will change when some Wall Street crooks are taken out in the street and horse whipped.
As of now, they're still being rewarded for failure and worse, theft by deception.

[mercuryblues]

8. I am not

an economist, but I have been saying this for years. People have laughed at me until I ask.

Worst decline in the stock market, most foreclusures on homes, job losses, 1st time people have been upside down on their mortgages, bank closings, and more since the D.

This link is great for comparision on what lead to the depression and what I saw/see happening now.

http://www.huppi.com/kangaroo/Timeline.htm