more than the output of the entire US last year.

Don't get carried away there tw - What were the default rates and jobless percentages in '29? You know that this is not a realistic comparison...

This is one analyst projection by associating percentages and chart characteristics to those in 1929. Neither I nor the analysts says it is correct. He is simply noting similar trends AND therefore a possible scenario. Meanwhile, when everyone was saying they had never seen anything this bad (in late October), well it has already gotten much worse then anybody thought even back then. Those who have predicted the worst are now accused of being too optimistic. Reasons why are discussed in another thread called "How the GAME is played."

If I read another prediction correctly, Obama is talking about the need for another $700billion TARP. And this is no longer for buying up bad assets. That Paulson strategy has even been abandon by Paulson.

Bottom line remains. We have invented massive assets that really never existed. Then enriched those who invented these fictions. Now those assets have vaporized leaving massive debt obligations. Who will provide that money? Well, the best American allies (ie Saudis) have put up some. But few will loan us money due to mythical America accounting standards. So, the government must issue corporate welfare in various forms, then the government can get foreigners to provide that cash.

Few other American financial institutions can be trusted anymore. You will see foreigners putting up circuit breakers to protect the world from American MBA games. Paulson is creating massive government debts, then gives that money to American companies with the biggest hands out.

Time to be fair was back when wacko extremists were saying, "Reagan proved that deficits don't matter." It was obvious back then only to a few how often George Jr was lying. Time to pay for not paying attention. Except it is worse than even the worst projections - and then last week got even worse again.

Worst part - there is no certainty. Even the most negative predictions have become too optimistic.

I must have missed where you answered my question about the default rates and jobless percentages in '29 compared to today? They are straightforward questions one must know the answers to before drawing any similarities or basing conclusions upon. I'm actually surprised that you didn't know this before basing an argument on that which may or may not be true. One must first know the facts before drawing any conclusions. Since you failed to provide any supporting evidence upon which you were basing your argument in post , I'll do it for you.

~Mortgage defaults in the United States were in the 50% range as compared to the current rate of approx. 10%.

~Additionally, the unemployment rate reached nearly 25% during the Great Depression compared to 6.5% for the month ending in October 2008.

~Bank failures were also at 20%.

~The stock market lost 89% of its value from its peak during the Great Depression.

~ Industrial production fell by nearly 45% between the years 1929 and 1932.
~ Home-building dropped by 80% between the years 1929 and 1932.
~ From the years 1929 to 1932, about 5000 banks went out of business.

Contrast that with figures from across the pond. Glasgow experienced 30% unemployment whilst in Newcastle the major industry of ship building fell by 90% and unemployment rose to 70%.


Just a final perspective - The stock market from '29 - 32 reached a high of $381.17 and fell to a low of $41.22.

Are there similarities, yes. Is it going to happen again - doubtful. IS this all GWB's fault? Absolutely not. Did he make matters worse, yes. There is more than enough blame to go around and it started long before him.

Obviously we are not at the 80% drop of the stock market, the 50% mortgage default, the 25% unemployment rate, etc. That was his point. All those factors in 1929 - and we were currently on the same path for all those adverse numbers. Did I say the stock market had hit the bottom yet? Obviously not.

His projection using 1929 suggests how much worse things could get.

Damm we have a 25% unemployment rate? really?

Don't we have a few more options now than we had then to prevent that?

No. :headshake

Would that be Pico and Me and me? Just askin... as you were or are or ...

Without joining either side of this argument I'd like to point out that 6.5% today is similar to 12-13% during the great depression due to the fact that 1 person losing their job generally meant one family out of work while 1 person losing their job today generally means one half of one family losing their job.

No it isn't scientifical but it is worth thinking about when comparing raw numbers.

It seems to me you got those numbers reversed. 4 people would have to lose their jobs today to equal 2 people losing their jobs in the 30's.

Hmmm. 6.5% today means 6.5% of american workers. In 1929 typically the man worked, woman stayed home so each family only had one worker... so 6.5% of workers doubled would would have the effect of 12-13% unemployment in 1929. IF what we are actually looking at is how many families are without income.

Right? Or did I completely screw that up - I'm bad at that kind of thing.

That thinking would change the % of families without income, but not the % of total workers without income. Still it is an interesting dynamic when comparing the two generations. And you would think that it means that fewer households are actually in peril. However, I wonder how many households have two incomes just to survive...to get the bills paid. Losing one of those incomes would hurt many families, putting them on or below the poverty line. For instance, I only have a part-time job. Losing my husbands income would cause a lot of distress.

Certainly families are at peril, but consider the difference. In 1929 if Bob lost his job and Judy was already a stay at home mom there was ZERO income to buy food and pay the mortgage/rent. In 2008 if Bob loses his job and Judy still has hers life gets shitty but they can probably still eat and pay the rent.

Do we (well, you) have 25% unemployment?

There are two "correct" answers:

(1) No.

(2) Not yet. Which was what I think TW's source was getting at.

I doubt it will go that high. One of the effects of the depression was to make governments realise that they could, and sometimes should, interfere to keep the economy going. Keynes and all that.

For all the stuff they couldn't really afford in the first place?
Not if the had an ARM that just went up. Some of them can't afford the increase with both of them working.

They may not be able afford the mortgage but they can afford the rent on something else. owning a home is not a right. life sucks, but that's the way it goes.

I agree completely.

Forgot my /sarc/ tags.

Interesting commentary:

Bailout costs more than Marshall Plan, Louisiana Purchase, moonshot, S&L bailout, Korean War, New Deal, Iraq war, Vietnam war, and NASA's lifetime budget -- *combined*!

http://www.boingboing.net/2008/11/25...ts-more-t.html

BIG assumption there Classic. Do you know any families where both parents are working a minimum wage job? I do, and they dont have a lot.

Agreed.

Video Perspective
 

Overview



Conspiracy Theory

Then they probably couldn't afford a home either. The situation as you described it is exactly what I've been referring to. How exactly can a household with two people making minimum wage think they can buy a house and maintain the payments? Especially if they got into one with an ARM.

They can't and they shouldn't have. It is all about living within your means. I sure the left-wing nuts will try to come up with some reason why it is someone elses's fault and now the government should save them.

They can't and they shouldn't have. So the system once upon a time vetted all such loan applications. Bankers and loan officers where never suppose to offer loans to people who could not afford them. Deregulation. NINJA. Now anybody can get a loan because the finance industry decided that responsible mortgage offerings were no longer their responsibility. And when all those mortgages go bust, those same finance industry bankers and loan companies then go running to the government crying, "But it was not our responsibility."

Deregulation. Nobody need be responsible anymore. NINJA - what once could never happen in any bank or loan institution. How curious. Same deregulation also resulted in the Saving and Loan crisis and the "we will never make that mistake again" $220billion bailout. We blamed the irresponsible bankers for making that mess. Why not today? Everyone knows those bankers and mortgage companies are always the good guys. Rush Limbaugh now tells us how to think.

If a home owner takes out a mortgage that he cannot afford, he only has himself and a system that is suppose to protect him to blame. But then bankers put thousands of NINJA mortgages out there that completely undermine the system, do we still blame the homeowner? Of course not. Just like during the S&L crisis, we blame the people who created this mess - no matter what Rush Limbaugh says.

What does Rush Limbaugh have to do with it? Everyone gets a piece of the shit pie, estp the wantabe homeowners who now have ruined their credit for many years to come, getting in to an ARM hoping the markets never changed for the worse. No plan when it did.

If you are going to recite what Limbaugh says, at least give him credit for repeating the mantra.

You think I am reciting Limbaugh? You must listen to him on a regular basis because I have no idea what you are talking about. At least get your facts straight.

I believe it was Clinton who, as stated repeatedly in other threads, started the ball rolling with the dream of "everyone should own a home. There were further decisions by Bush which further exacerbated the problem, but this is simply not all Bush's fault. Nor is it so simple as "deregulation." Greed and an expectation of businesses to have a higher moral standing instead of just going after the almighty dollar have a great deal to do with this. These are simply facts - no matter how many bad decisions Bush has made, you simply cannot lay all this on him. Congress also has a great deal of the responsibility. They all got rich and more powerful off these companies.

Good, so we agree it is the fault of the Dems and Clinton. I am with you.

This guy never ceases to crack me up.

Zawahiri blames global financial crisis on 9/11 in latest al-Qaeda video

Al-Qaeda's second-in-command, Ayman al-Zawahiri, has said in a new internet video that the international financial crisis is the result of a US war on Muslims and the Sept 11 attacks.

http://www.telegraph.co.uk/finance/f...eda-video.html

Well, a huge deficit funded spending spree on destructive consumption rather than creative/productive investment probably was a contributing factor. Not the only one though, the bloke does have delusions of grandeur.

Please show your math and how this lead to a break down of the lending system, the mortgage crisis, and a real estate bubble. Where is the connection? Other than the bottom line deficit the two were not related IMHO.

What is this "math" you speak of? ;)

As I said, a contributing factor. I'm not saying it caused everything.

Other than our deficit, which is astronomicallyjupiterproprotionally out of this universe, I don't see who it contributed.

Deficit spending for the WOT inflated the number of dollars in the system. That created a push to find clever ways to invest those dollars because conservative investments probably wouldn't keep up with inflation. Easy money is the fundamental problem at the heart of this whole mess, which apparently now is to be solved with easier money. :eyeroll:

I don't agree. Deficit spending for the WOT went to a very narrow number of industries. It was not the source for America's new found wealth. Easy money came from the lenders, not from governmental deficit spending on The WOT. Easy money came from lending practices and a desire to get money out there at any cost. More people became eligible to buy, many whom should not have, and lent money flooded the market. Many more buyer drove up the prices and greed and competition met on the real estate market place. The hyper-over inflated home values plus the new lent money created the bubble. None of this has anything to do with money from the The WOT. As we know the majority of those billions was poured into the Middle East where it went down a black hole.

The money didn't magically disappear after it was spent. By WOT, I mean the original definition where supposedly the Iraq war was part of it.

But it didn't pour into the market place either, infusing the economy with new found wealth. A narrow number of people and industry got rich, the rest disappeared into the pockets of the Middle East.

I'd be interested in seeing a money trail on that, if it were even possible. [shrug] I also left out the easy money policies of Al Greenspan, which were supposed to save asia.

Me too. There were many trails where where there was no path. People who had duffle bags of taxpayer money, in cash, to pay the way to an end at the wim of the sargent in charge. Hundreds of thousands of dollars used to grease the palms to get things done. It is gone forever.

The real money was in men and material not goofy black ops.

I agree with Griff. True, there was a large amount of cash used in Afghanistan, but much, much more went to US industries, Lockheed Martin, Halliburton etc. And those lucky few who got rich then spent some of it on consumer goods and services within the US.
But, as a wishy-washy wimp, I also acknowledge a lot of truth in Merc's point: there were a lot of factors that had little or nothing to do with the WOT.

No end in sight.

http://www.breitbart.com/article.php...show_article=1

Editorial
Bailing Away

The federal government is going for broke in an attempt to avert the type of calamitous financial collapse that led to the Great Depression. No one would fault the objective, but throwing money at the problem is becoming an end in itself.

http://www.nytimes.com/2008/11/30/opinion/30sun1.html

WASHINGTON -- The Treasury Department has failed to address a number of critical issues while implementing the $700 billion financial rescue plan, including how to ensure its efforts are successful, the Government Accountability Office said Tuesday.

The report, which was required by the legislation authorizing the rescue plan, said Treasury has yet to figure out how to make sure financial firms receiving billions of dollars of federal funds comply with limits on executive compensation and dividend payments. (Read the full report.)

On a more basic level, the Treasury's efforts to establish "an effective management structure and an essential system of internal control" are incomplete, the report said.

"Without a strong oversight and monitoring function, Treasury's ability to help ensure an appropriate level of accountability and transparency will be limited," the report said.

http://online.wsj.com/article/SB122824907384873263.html

Lemme see if I get this... We have no plan implemented to oversee that the monies are spent properly, so we decided to give the money out anyway and worry about that later.

Correct. According to the GAO, the money is being given out without adequate oversight on how it is being spent.

This thread should be read in conjunction with the welfare thread.

It is only what we deserve after electing politicians willing to fall for the "we need this package done right now or the economy will collapse" BS that was spun. $700B given out with no firm plan in place. $700B given out with no oversight on the distribution. $700B given out because a lot of people made bad choices and didn't like the consequences. $700B given out because some only pay lip service to the free market. $700B given out which will only make the hole deeper.

BS. Every last penny of it. The $700B isn't meant to prevent to AIG, Citi, the Big 3, etc. fail... it is proof that they've already failed and they just want the taxpayer to pick up the pieces so they can keep their doors open. Good companies don't fail. Bad companies do. Bad companies should be forced to face the consequences of bad management. They either close the doors (only the strong survive) or they are taken over by stronger companies (only the strong survive). Bailouts only encourage poor companies to continue being poor companies.

Here, here! Well stated.
:beer:

Citi is raising the APR on accounts of those with A++ credit to 19.99%

My dad just received a very "uniquely" phrased letter from citi. He let my sister use his CC to buy her truck a couple years ago. Fixed 3% for the life of the loan. That is the only purchase ever made on the card and she only has about a year left to pay on it. The letter is confusing but once it is deciphered it basically says we want to raise your rate to 12%. Yeah, we agreed on 3% but we need more money. If you don't agree with us raising your rates you have to let us know in writing. If you don't want us to change the rate we won't let you use the card for future purchases. Funny.

Bout friggin time! The see the reality now that enough people are fed up with this situation and are re4ady to let the big three fail and start from scratch. Guess they realize that its better let a little go now than a whole lot later.

GM may pull plug on Saturn
One down, two or three more to go.

"But the decision to consider pulling the plug on Saturn, the agile little start-up that GM developed to reinvent the way it produced and sold cars, is a bitter reminder of just how deep the automaker's troubles run."

WOW. If anything had value to be sold off I would think it would be Saturn. They certainly have a better rep than Pontiac or most other GM cars. I just can't believe that someone out there would not be interested in scooping that up.

Big Three Spending Millions On Lobbying

Bout time someone started calling these guys out - I wonder who else is tied in with al this. I'm sure there have to be some R's too.

Put 'em all on report, Jim!

From the NY Times of 3 Dec 2008:
Saturn's success is directly traceable to significant independence from GM's MBA corporate executives. Once that independence was lost, Saturn began dying as quickly as all other GM division. Just another example of why GM's #1 problem centers on Rick Wagoner.

Last I heard, GM repeatedly promises a new product for Spring Hill TN (the famous Saturn plant) and then takes it away. Another symptom of an MBA boss - indecision.

Since this does need a reply, I'm left wondering how the sentiments of "go fuck yourselves" are best expressed in legal jargon.

That's standard procedure for all the cards I've had. When they decide to jack the interest rate, the first time you use the card, the interest rate goes up on the unpaid balance. Doesn't bother me because I never pay any interest.