How bad is it going to get?

[marmar]

These are today's financial headlines from Bloomberg:

http://www.bloomberg.com/index.html?Intro=intro3



* Bear Stearns Bailout Prompts Record Share Selloff With Fed-JPMorgan Rescue
* U.S. Stocks Fall, Led by Financials as Bear Stearns Gets Emergency Funding
* VIX Index Poised for Highest Close in Five Years After Bear Stearns Rescue
* Bear Stearns Rating Is Cut Three Levels to BBB by S&P, May Be Reduced More
* Fed Invokes Little-Used Authority to Prevent Bear Stearns From Collapsing
* Feldstein Says U.S. Economy Is in a Recession That May Be Worst Since WWII
* Lehman Brothers Obtains $2 Billion Unsecured Credit Line From 40 Lenders
* Bush Says U.S. to Take `Appropriate Steps' to Stabilize Financial Markets


This doesn't seem like your garden-variety recession. :scared:

[Birthmark]

1. My guess:

Optimistically...maybe half as bad as the Great Depression

Pessimistically...I can't imagine how bad it *could* get.

[zonmoy]

39. I can

end of technological civilization with the die-off of 90% of the human race kind of bad.

[Pale Blue Dot]

2. Very, very bad.

The signs have all been there for months... years, maybe.

[aquart]

4. This was completely predictable the minute Bush cut taxes.

Oh wait. We DID predict it.

[JackRiddler]

59. This was completely predictable the minute Clinton repealed the Glass-Steagal Act...

Although one can also go back to the banking deregulation under Reagan and Bush Sr., too, or the crises of the 1970s that caused, not a reevaluation of the system, but the move to finance as the motor of economy and profit. Or to the invention of the permanent war economy in the first place.

[HockeyMom]

3. I can remember my parents and grandma

telling me what it was like to live during the Depression. Oh man, we don't want to go there.

[aquart]

8. The good news is that they lived.

So will most of us. It just won't be fun.

So where is Obama's federal jobs program?

[OwnedByFerrets]

47. Not trying to argue with you....

but most of them lived because they knew how to live off the land. A minuscule number of ppl can do that now. IF we have to live thru that kind of depression again, millions will starve. Its already started overseas.

[aint_no_life_nowhere]

5. I don't envy the next President

I don't think there are going to be any quick fixes. I heard a guy on the radio last night who said we aren't cranking out enough engineers in our universities anymore. Manufacturing is being lost. Our service economy of insurance companies, lawyers, banks, mortgage brokers, and investment firms seems to be dedicated to just moving capital from one person's pocket to another, without really creating anything new.

[ScreamingMeemie]

6. American Axle Strike enters Day 18...

But no one around here has really given a shit about that. :hi:

[marmar]

10. I give a shit MrsGrumpy.....

:) :hi:

[movonne]

7. I think it has been a plan to bring this country down...and it sure

looks like it is picking up speed...

[marmar]

11. The Shock Doctrine comes home.....

:scared:

[conflictgirl]

45. I'm reading that book right now and I fear you're exactly right.

I'm tempted to leave MI for a part of the country that's doing better, but it looks like the powers that be are trying to make sure NO place will be doing better for long...

[bdamomma]

54. yea, naomi klein said it, economic shock and awe.

and maybe their next target is social security. these thugs must go, I am getting to the point that I'm ready for pitchforks and torches.

[butterfly77]

23. The Dems said that when..

bush stole the election..

[JuniperLea]

24. I believe you are right...

Sad but true methinks.

[superkia]

30. I think you have been educating yourself.

It looks like they have realized how divided we are as a people and how asleep at the wheel we have been and decided to have bush accelerate their agenda. I would say when it hits, it will be the worst ever, this has been taking place slowly and it never gets better, only worse over time.

Its sad, I asked My mother if she felt living in America now, has got better as time has went on and she said " technology has got better but our lives have continued to get worse". She was talking about how when she was working two jobs to support my 3 brothers and I, that she had more time to spend with us and her stress level was lower. Now on part time retirement because of her health, she can barely afford to live, has no insurance until she turns 65 and all of her children and other family members are too busy trying to keep up with the hectic pace of work, paying the bills and stress nowadays.

Hopefully, now that the middle class is starting to hurt and soon even more will, maybe then Americans will see that we need to stand together to save ourselves. Together we stand, divided we fall. The divide and conquer method has been working on us all, look at how the media has democrats screaming at each other...smoke and mirrors.


I changed it some but maybe people will get the point a little better. With the way the primaries have been turned into racism and sexism wars, I though it was appropriate. Anyone seen the MTV commercials they put out? I never would believe that any corporation would actually speak out in any way!

http://youtube.com/watch?v=W5oKqQmGYHQ
http://youtube.com/watch?v=vTOuq4pY10o&feature=related

First they came for the "POOR"
and I did not speak out
because I was not "POOR".
Then they came for the "MIDDLE CLASS"
and I did not speak out because I was not "MIDDLE CLASS"
Then they came for the "BLACK PEOPLE"
and I did not speak out
because I was not "BLACK"
Then they came for the "WOMEN"
and I did not speak out
because I was not a "WOMAN"
Then they came for me
and there was no one left
to speak out for me.

[hootinholler]

9. I thought Bear Stearns was that bug eating survival dude.

:shrug:

-Hoot

[marmar]

14. That's Bear Grylls.....

The guy who drinks his own pee and eats raw camel entrails......That dude is f**king nuts!

[MercutioATC]

22. Bug-eating, urine drinking...

...and it's been revealed that it's mostly fake.....

...which means he drank his own pee for nothing...

[Lance_Boyle]

36. I'm sure his salary was substantially more than nothing. n/t

[hootinholler]

40. I thought it was the other bug eating guy that got caught in a hotel. n/t

[MercutioATC]

53. Naw...Suvivorman is actually legit. He's an idiot sometimes, but he's real.

Bear travels with a camera crew...and he's occasionally only a few hundred yards from civilization when he's supposedly in "the wilds".

[shraby]

12. Somethings that will help alleviate the pain

that wasn't in place during the 1930s are social security, welfare, medicaid, medicare, and unemployment checks. All social programs that will help if times get really bad. They will keep a modicum of cash flowing in the country.

[earth mom]

41. You mean all the safety nets that * & Co are working overtime to destroy?

:grr:

[sellitman]

13. Heck of a job bushie!!!!!!!

[masmdu]

15. Not bad....no depression...

Things are on the verge of turning around and will only continue to improve. Politics and change at the helm. DOW to 20k. New energy/tech to replace coal and oil.

The (not too distant) FUTURE IS VERY B-R-I-G-H-T !

[rockymountaindem]

16. Are you on drugs!?!?!

[DemocratInSoCal]

18. I Got Attacked This Morning

Everyone who posted, accused me of not being optimistic enough. About how the next President(read: Obama), would be able to fix all our problems, and things will turn around.

Kool-Aid drinkers even here.

[greyghost]

32. God help Obama or Hillary. If the war-monger gets in it's Armageddon.

[masmdu]

21. Why, Because I am optimistic? People tend to extrapolate and project current

situations into the future...not allowing for unknowns or alterations. Things will be better and better and better.

[marmar]

25. Not when the fundamentals are as bad as they are now....

In a country that really doesn't build anything anymore, as we still did during the Great Depression, the fundamentals are very bad.

[masmdu]

34. What fundamentals? Can you explaindyour terms? If you r talking fundemental wrt stocks I dont pay

attention to them. I am strictly TA. But in a broader view just like an under-performer is dropped from the S&P and something more robust is added as a means of continuing the upward trajectory...same with society in general. If something doesn't work well to the point of threatening the whole system it is dumped and new ways brought forth to advance human potential.

[zanne]

26. Sounds like you were mesmerized by Bush this morning... nt

[masmdu]

29. Dont have a TV and couldn't care less what he has to say...

[sandyd921]

64. And what is that you are extrapolating from?

As far as I can see all of the available evidence supports the OP.

[earth mom]

42. Stop drinking the Kool Aid they are serving on Faux! nt

[Maggie_May]

49. Ok even if I try to believe you

Lets start with jobs lets not even factor health care and education jobs. What good paying jobs do my children have to look forward to. Now lets start with energy we are not even close to any alternative energy at this point. Now lets take health care the cost of health care is out of reach in most house holds at this point. So you answer about what jobs there will be in the near future how to lower health care and of course when you see the end to the high energy prices than I will say everything is just peachy. Oh yeah and our dollar which is tanking right now and banks that can't find there way out of bad paper.

[masmdu]

51. Ok...lets see...

Jobs:
Green economy "simultaneously attack the climate change crisis, pump up the economy, save money on energy costs, and provide 'green collar jobs'"
Here http://april.stepitup2007.org/article.php?id=294 and here http://gristmill.grist.org/story/2008/2/19/155825/434 and here http://urbanhabitat.org/node/931

Energy/tech: Suggest you poke around these sites. There are plenty of solutions being implemented NOW that address many of the existing problems (energy, transport, lighting, etc...thtings like $1.50/gal biodeisel within a couple of years). http://www.nextenergynews.com/ and http://www.sciencedaily.com/

Health Care: Yes it is a problem but it is being addressed load and clear on the national stage. The political will is there, medical professionals clamor for change, and yes, technology is lowering cost/delivering unimagined benefits.

Will it all change to your liking overnite....No...but the change is necessary and is happening.

THe dollar tanking: So....? Overseas travel more expensive. Overseas imports become more expensive thereby promoting consumption of US goods leading to job growth... Unless you are a currency trader or travel overseas a lot...not a problem and actually a benefit.

[Warpy]

17. This isn't the garden variety recession, it's the perfect storm

of deregulation leading to high fiscal crimes, of exporting jobs and holding down wages forcing people who work to live on debt to supplement wages that will no longer support them, of wealth concentration into the fewest possible hands leaving the many without any means to protect themselves from the crash, and of a political system that has been bought off for too many years, one that no longer remembers its purpose.

IOW, brace yourselves. This is going to be a disaster and won't improve without fundamental changes in most of our systems, changes everyone in power is terrified to make.

[no_hypocrisy]

19. The New Deal will have to be re-instituted to redistribute the wealth;

unions will need to be strengthened and protected; and "middle class" will not be a derogatory, pejorative term.

[greyghost]

35. DING, DING, DING! We have a winner. You are 100% right.

[earth mom]

44. I don't think those in power are terrified to make changes. They just don't give a damn.

They are out of touch and insulated from the kind of reality the rest of us are living in.

They ARE the problem.

[spanone]

20. hey, just wait till we get those checks.....you'll see....

:sarcasm:

[Lorien]

27. Well, I've always heard it said that "what's good for Wall street is bad for

Main street". Any chance that the reverse could be true?

[marmar]

28. Nope....I think we get screwed in all possible scenarios....

n/t

[greyghost]

31. Without much of a stretch, it could be the next Great Depression.

Some are going to get EXACTLY what they deserve.
Then there are the rest of us. God help us.

[Generic Brad]

65. Great Depression or Greatest Depression?

[skooooo]

33. Garden variety recession?

I wonder where the recessions of the last 40 years measure up? I think it might be too early to get really panicked about this one, personally...

[hatrack]

37. Well, let's see - subprime write-offs to date = $195 billion

S&P says total damage from this whole steaming mess of subprime, alt-A & ARM mortgage cat logs will clock in at $280 billion (they were saying $265 billion last month).

UBS disagrees - they're guessing globally about $600 billion in losses from this whole fiasco.

And with everbody (Carlyle, Lehman, Bear, Peloton et. al.) leveraged to the hilt, it'll probably be substantially bigger than that.

Just FYI, Carlyle Capital was leveraged 32X, so that when $400 million in margin calls arrived, followed quickly by another $95 million-odd, they folded up like a cheap tent. Their creditors are now snarling over the remaining bones and gristle.

Hell, Citigroup announced last week they were floating a bond at 6.875% - and guess what? They're underwriting 84% of the offering themselves. Citigroup can't find underwriters or insurers to take on the issue.

My ballpark guess would be pretty fucking bad.

[alfredo]

38. I think it is on purpose. It is the only way they see to kill off social

programs and other humanitarian reforms of the New Deal.



“We shall squeeze you empty, and then we shall fill you with ourselves.” George Orwell 1984

[Juche]

43. I have faith though

If this was intentional, I think in the long term it'll backfire and result in another FDR. I think the public will eventually revolt at all this mindless economic inequality and deregulation. Even though entitlements cost >$1 trillion a year, it'll be near impossible to kill them off when taxes on corporations and the wealthy are at all time lows while profits are at an all time high. Even the religious right might resist that.

[alfredo]

55. This is not a crowd that thinks long term, they are into making money

and gaining power for as long as they can hold it. So a new FDR comes in, they don't care, they have theirs.

[shanti]

62. BUT

the damage they are doing and have done will pay off for them for a long time after * leaves (if he does). they are pulling out all the stops. my biggest concern is what will be there when they are gone. i suspect there will be next to nothing left for the people.

[alfredo]

66. His agenda is grinding to a stop. He can still do damage, but not to

the extent of what he did pre Nov 2006.

[earth mom]

48. Bingo! We have a winner! Except the intention is the North American Union & the Amero.

Followed by one monetary system for the entire globe.

Those bastards have had it all planned for YEARS.

http://www.youtube.com/watch?v=I-15EjHCzds

[alfredo]

56. New world order?

[Mike03]

46. Pure Speculation

I think this will get much, much worse before it gets better.

And I'm putting my money where my mouth is. I am almost 70% in cash now. The few equities I do own are concentrated in the following areas:

Foreign Currency
Petroleum and Energy
Healthcare
Gold and Mining
Money Market Funds (that are supposedly immune from the blowback of the mortgage implosion)
Some foreign and emerging market

I'm using this downtime to research interesting opportunities that will present themselves once things settle down.

Honestly: Good luck. This is the toughest, most bizarre and uncertain market I've ever seen.

[CJCRANE]

50. Bush broke America nt

[Xenotime]

52. A depression is coming and those who aren't prepared will suffer.

[Karenina]

57. Or die.

[Peace Teacher]

58. I agree.

[Fire Walk With Me]

60. Impeach now, take the money out of Iraq and the Mil/Indus, and we may not have to find out.

Why are Clinton and Obama allowing this to continue?

[MilesColtrane]

61. My prediction:

U.S. economy will be in recession until the end of 2009.
We'll see double digit inflation, with no rise in wages.

People will continue to lose their jobs and homes. There will be bank failures. How many? Who knows.

A factor that could make things much worse than past recessions is the lack of manufacturing jobs in the United States.(as someone else noted upthread)
As the world shifts to the Euro as the default reserve currency and budget deficits here continue to climb the dollar becomes worth much less.

Suddenly all the stuff we import that we don't make here anymore gets real expensive.

Hyperinflation is a real possibility.

[Th1onein]

63. So when is the CEO of Bear Stearns gonna get that multi-million $

pay package? I mean, isn't that how it's supposed to go? You bring a company down, you get paid really well for it. Right?

[Manifestor_of_Light]

67. Dr. Ravi Batra of SMU predicted all this long ago.

He is an economics professor at Southern Methodist University in Dallas.

He wrote "The Great Depression of 1990".

It's just hitting 17 years later than he predicted.


More info:
www.ravibatra.com

[marmar]

68. He was on Thom Hartmann's show late last year and he predicted.....

..... widespread economic chaos in 2008.


Looks like he was prescient.

[kineneb]

69. bad enough that our Belgian friend told us to leave

and to please come to Belgium. I think he and his family would sponsor us.

[better tomorrow]

70. only if you can get out of the borders once

they close them. but, bring us back some chocolate, ok?