We Are Not Headed for a Great Depression

Comment by Jane Calendine Oct 10th, 2008 at 5:03 pm I am truly tired of the Democrates using this as an opportunity to,”Look good!” I mean, come on, they’ve been there all along. They know there are gullable people out there, and only listen to news channels that make them,”Look good!” I do have a fear that we’ll get stuck with a Democrate president and I’m sure when they don’t fix it because of their decisions, they’ll say it’s because the,”Republicans,” are ALL at fault! Thanks for listening!!!!!!!!!!!!!!!

Elizabeth, Great article....wonderful perspective. Much of this economy is based on confidence and although your job is not one of a politician you do have a big impact on the consummer because of your visability on FOX. With the market sinking like it is I think you and every other business reporter has an obligation to do what ever you can to raise the confidence level in every household across this country. That means sensible logical and POSITIVE stories like the one above Thanks

There are many similarities with the Great Depression, which have not previously been aired. This credit crunch and stock market collapse could in part be due to the arrival of the euro.(like the return to the Gold standard between the wars) In 1928 the arrival of a socialist party in power in Germany prompted an exodus of cash. In 1929 Germany had high interest rates and bought large amounts of Gold. When the euro first arrived money fled Europe and arrived in the US. Since 2005 the ECB, egged on by Germany, has raised interest at least nine times, the money has returned to Europe and Wall Street is hurting. My book 'How Hitler came to Power' reveals that Germany was far stronger in the Great Depression than has until recently been imagined. As she was so strong - the Greatest exporter in the world in 1931 - her deflationary economic policy had an effect on employment in many different countries. As Germany is still determined to create a budget surplus by 2011 in the present economic climate I fear that the world will continue to be engulfed by deflation until she can be persuaded to change her economic policy. For exactly how the 1929 stock market crash happened look at Chapter 8 'German trickery and the Wall Street Crash' in my book 'How Hitler came to Power'. The book is supported by Professor Forrest Capie, at present writing the latest volume of the history of the Bank of England. I believe that the best way to stop Germany from acting in her narrowly perceived self-interest is to reveal how far she herself was responsible for the Great Depression.

Is anyone investigating who is really selling? Could the market be suffering not just from fear but actual manipulation by folks with big money who are terrorists? Remember 911, Obama and his cronies understand the market and would like nothing better than to use our economic system against us.

Yea Mc Cain plan that the fundamentals are sound. Not hardly! The fundamental principle of a capitalist economy is that the market,and banks correct them selves. The fundamental foundation or structural is broken when the government must restructure how the money flows, and to whom the money flows. I forgot one other thing where the money flows from. In this chase it's the tax payer. The fundamentals are fractured, broken, and need surgury. That's your idea of sound and stable fundamentals? As Mc Cain change from speaking about the financial system to the workers he's a nut there also with unemployment at an all time high and jobs spewing out of the country this also sounds strong to you. You must be a patriot. Of what country I'm not sure.

I am so glad Obama is going to win this election. I feel safe relying on his cool demeanor and good looks to navigate us through the coming disaster. Really, I mean, isnt he the one that is most able to manage all this confusion? I am sure we are in good hands with the Democrats in congress and the white house at the same time. The country will look very different in four years ... but everybody will be happy because equality will reign. The rich will get a bit poorer and the poor will still want more. I cant wait!

There are serious market concerns about Morgan Stanley. If this bank was to go down,then we are literally in a modern ''Great Depression''.

It is too early to make an announcement that this is not a ''great depression''. The markets are falling and WILL fall further. The credit market is stalled. Banks are failing and nothing can save them. Your report is not accurate and in fact is dangerous in the conclusions it comes to.

Why do we tolerate reporting that conflicts so widely on basic facts? First i hear thet the S&L crisis in the 80's cost $2-300 billion net and here we see it cost nothing. With such wide disparities in basic statistics, no wonder we hear varying predictions and interpretations of what is happening now. Politics distorts the truth and as a result, we can't kow what to believe.

The history lessons are really interesting -really! The Great Depression has always interested me - as a historical study - I never expected it to become hysterical but last year at this time, the bottom fell out of my financial world just because of greedy people overbuilding in my state. my construction business fell apart after 40 years of successfully supporting family and employees. i have learned it doesn't pay to follow the rules, work hard, or save because all that counts is to trick and con people. my live savings is dwindling and on the line daily. i wondered back in sept 07 why no one was talking about this in the news. i wrote to my congressman and senator -got back form letters. I hoped it was isolated to people in construction but i knew better because things had never been this bad. i watched as it began hitting the news with complaints of high gas prices and high food prices. Then the stock market started to fall further. congress began saying something had to be done Now! then I find out many people 'in power" knew about this for years and did nothing. the bail out is a fiasco! "we don't want the stock markeet to plumet!" well, look at it now! i wish i had realized how really bad this would get and never left my money in the market or the bank. i am so angry i could spit. nobody knows what the %^$#& is going on or how to fix it. there is no bail out for me and i have been living in a depression for over a year now. i waas always so proud of living within my means and being debt free - hah! if i don't pay my property taxes i'll lose my home - what's free about that? yes, the history lessons are great - are we in recession or not - a depression or not? who cares what it's called! it's terrible and unfair and makes me want to go live in a shack in the woods as far away from the rest of humanity as i can. don't come looking for me - i'm outa here!

Keep living in a delusion. The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered. ~Thomas Jefferson

I agree with the premise that the current financial crisis is very different than the great depression. However, comparing unemployment rates during the great depression with current unemployment rates is erroneous. Since the 1960's we have repeatedly change the way we measure unemployment in the U.S. If current unemployment were measured using the same methods that were used in 1932 our current unemployment rate would be in the 14% range. That's not 25% but it's much closer the the Pollyanna 6.1% we use today.

Phil Gramm DEREGULATED credit default swaps (derivatives) in the 2000 Commodities Modernization Act. Phil Gramm DEREGULATED the financial industry in the Gramm/Leahy/Bliley Act of 1999. This Act overturned the protections (REGULATIONS) put in place in the 1933 Glass/Steagall Act. After more than 70 years of protection (REGULATION), it took a short 8 years for things to unwind after protections were lifted. Of course, we're just a bunch of whiners, right?

Those who do not believe the dire situation we are in as a planet need to read the economists who predicted this several years ago. I.E. Jim Rogers, Jim Sinclair, Monty Guild. Just started following Nouriel Roubini (Well known global macroeconomics prof at NYU Stearns School of Business) he offers some great insight as well. In my opinion, if I were in charge of this country, I would gather this team of experts who saw this coming instead of relying on $700B Bailout Bernanke and Failed Promises Paulson. Maybe these two bufoons did see it and were shut down by politics. If so, this country deserves what it gets which will lead to taxpayer revolt and massive political reform. Get ready for a single world currency backed by shiny yellow metal folks.

McCain and Obama just don't get it. Things are only going to get worse until those in power realize that the country must become a manufacturing nation again. All those companies that either moved their production or outsourced to other countries should all be charged with treason. Companies like Malmart have killed the working class off in this country. How can thae big banks be proud American when they moved their call centers to India for cheap labor. The big three automakers complain when we don't buy american cars, but don't tell us that they outsourced all their parts production overseas, so putting thousands of skilled workers on the scrap heap at home. Walk around any big store and try to find anything that is still made in USA, Apparel, Furniture, Tools, Electronics, Toys, etc. You name it, yu won't find it made here. China and India are laughing all the way to the proverbial bank, while we are stupidly sinking deeper and deeper into oblivien.

Well the last time some one made such a definative boast about something not happening was the head of the Calgary Olympic games saying there was plenty of snow and not to worry about the games. The next day a chinook blew in, melted the 10 feet of snow and they had to haul snow from the Yukon! But with the safe guards in place mentioned, a better educated investor class, and a few public hangings of dirt bags who created this mess and we'll be back in the green stuff. Only fly in the ointment might be OBL who could pull another 9/11 type attack that would impact our economy. The Volt

Ridiculous Article - To say that this is not going to be like the Great Depression because we don't have high unemployment and huge drops in manufacturing is as short sighted as writing an article saying that the Stock Market is close to the bottom on the very same morning that the Market drops another 670 points. I'm not saying that we are absolutely going to see "Great" Depression type problems, etc., but give me a break, we have just begun to see the problems in our economy. It's only been a couple of weeks since the Dow started dropping triple digit numbers. This is just the beginning, not the end. And as a financial writer I would hope that you would look a bit deeper than just the Stock Market and take a step back to look at the BIG PICTURE. EVERY fundamental of the American Economy is in serious LONG TERM crisis. If you were to look deeper and longer term into our economic prospects there is NO WAY that you can come to any other conclusion than that our economics as a nation is a long shot from being sound and ready to jump out of this painful slide. I would hope that financial writer types would stop painting this short term glitch type picture and would do more explaining and educating of the American people on the things that they can do in tough times to work toward improving their lives, and in turn, the American Economy. They should also begin showing them the things that we've done to get ourselves into this situation so that we don't repeat or continue those mistakes any further into the future. Re-educating the American People out of this instant gratification mindset is what's needed, NOT articles attempting to convince them that things will get back to normal in just a short period of time. If you think that this is a short term, "we've had worse before" problem, then you are either seriously ignorant about all of the problems we face, or you think that by attempting to stay positive and painting Rosy pictures, you'll have some kind of psychological effect on people. Either way your wrong.

Depression??? The only depression I'm aware of is what these panic-sellers will experience when they realize how much money their little pathology has cost them. Be BOLD people! Can't ya just smell the opportunity brewing here? But ya can't take advantage of it if you're head's stuck up your a$$ in some half-brained panic-attack. Don't ya remember what ya was taught way back in econ 101? Repeat after me: "The goal is, buy when the price low - sell when the price is high". Now, you try it...

Elizabeth, I hope you are right that we are not in a Depression. However what about savings rates? Savings rates have been negative lately in the U.S. Were they higher prior to the Great Depression?

How many branch offices, each figuratively representing a separate profit & loss center, have been affected by the collapses of IndyMac, Washington Mutual, and others? To say that only 13 banks have collapsed is not hardly a true indicator of the depth of the situation.

Massive unemployment? No way. The global economy still has huge skills gaps to fill - way more than they can be supplied. The big bumps come with dropping prices.

Government intervention caused this crisis. Democrats and some Republicans decided credit and home ownership were rights. They tried to redefine our constitution. Now they would socialize our business. Some would say this may be driving away investment. Do we really think our goverment will do better. Look at their past record. Our freedom, finances and well being are at stake. We are worried. We worry not about losing our 401k and IRA accounts but our ability as work and achieve prosperity. Our future generations will not have freedoms and options to achieve. Government caused this problem but government will not be solution. I agree we need some regulation but government ownership of business and wealth is not in our best interest. We have both Presidential candidates jumping on socialism bandwagon. It does not look good

Not to burst your bubble, but only 5000 banks fell in the great depression.

You're right, it's going to be much much worse!! Americans had a lot of savings back than, today?? The credit markets are still frozen with the TED spread at an all time high. Credit cycles last a generation, the wheels of this one have turned. Lower earnings will follow, followed by lower stock markets, DOW 4000 or less, followed by more unemployment etc etc. The foolishness of the last 25 years is coming home to roost. America jacked up spending on it's credit card and now it's time to pay up but without the help of the chinese and co it's not going to be able to afford to pay for all the national debt,social security, medicare etc. Liabilities of 60 trillion plus! In a time when GDP will contract 20-30% and unemployment will soar to 20-30%.

YOu know I find that most people are optimistic and don't want to hear bad news. But let's not form our opinions on "feelings". Much of this article is based on the authors "feelings". Unfortunately for many fundamental reasons the mess is just starting to unwind. Sure I would like to believe the worst is over and it's only up from here but the fundamentals don't say that. The american people have been bled dry by wall street and corporate america and now the american people are going to be bled even more to finance this bailout. The costs will be across the boards in taxes, commodity spikes, insurance costs, on and on and on. This system was a house of cards or a pyramid scheme. The guys on the bottom are tired and don't trust the guys at the top anymore. Games up and it will take years - many years to recover from this hangover.