We Are Not Headed for a Great Depression

"It is their unfathomable stupidity, and the fact that these exotic derivatives that so enriched Wall Street but now have the same rights to the US Treasury as plain vanilla Treasurys, that is engendering a voter outrage hot enough to melt platinum." No. I'll tell you my voter outrage hot enough to melt platinum. You appear to be pinning this entire mess on Wall St. What about all the irresponsible homebuyers who purchased homes they had no business buying (aka sub-prime) and are now being bailed out (by me)? What about all the stupid home buyers who bought homes with ARM's that are being reset, and are now saying "they had no idea" their mortgage payment was going to increase this much, so their mortgages are being modified? I am sick & tired of all this "bailout" talk. Whether it's a big bank, auto mfr, airline, AIG, or a irresponsible home buyer. We have now opened up a pandoras box that will be hard to close. Stupidity and arrogance are being rewarded, while the rest of us sit and wonder why we're being punished for being responsible. In the meantime, where the heck is my reward (aka bailout) for being a responsible home buyer, choosing a fixed-rate mtg, buying within my financial means, and making my mortgage payment every month?????

The only reason we are comparing anything to the Great Depression, (which by the way lasted longer and started because Government got involved) is because the Obama Mwedia is following Obama's orders and pushing the idea to help Obama because he is the only one that gains from it, because for some reason people think that an inexpereirence parade organizer (which id what community organizers by me do) can do something about the economy, by his plans he will lead us into the greatest Depression!!

In 2002-2005 period, we overcame the recession relatively quickly because we had the "equity loans" party economy. This allowed consumers to keep buying to bring us out of the recession. Now, 1 our of every 6 homeowners are upside down in their mortgage. The party of equity loans has now stopped. What is going to get us out of this recession? I know the fed is trying to inflate our way out of that, but we all know this is not sustainable. The govt needs to get back to fundlementals: 1. Allow the market prices to correct itself without any bailout. 2. No capital gains tax 3. Caps on punitive damanges 4. Lower taxes (for business and individuals) 5. Cut WAY back on govt spending Go back to creating an environment where business actually wants to be in the US. Business has been slowly heading on out for years. We have to create a strong business environment, which in turns gives people jobs, which in turns helps the consumer buy more stuff, which in turns helps the economy. Sadly, the rest of the world is looking at us as one big extremely poor debt/asset ratio; no wonder they are losing confidence in our stock market. We have been killing the consumer for years with inflation and higher taxes, and also allowing businesses to be run off (ya know, where the consumer gets its money in the first place). This has got to change, or it will get worse. Creating more govt programs and make work stuff will only make it worse.

Correct not a deflationary depression, instead this time we will get Weimer Germany style hyperinflation, because the Central Banks stand prepared (and already to the tune of $trillions) to expand the monetary base as necessary to prevent every default. The Fed is coaxing investors from the stock to slaughterhouse, to the upcoming Tbond slaughterhouse, and it only takes a little bit of this common sense to see what is coming and why.

In our town, the homeless shelters are full, they are turning people away left and right. The food pantrys can't keep enough food stocked, and the humane society's shelters are overflowing with pets that their owners can no longer care for. Not soup lines in the same sense as we seen during the great depression, but more people are hurting than anyone knows. The mainstream media certainly doesn't report these stories, but have you read your local newspaper lately? Anyone who was around during the 70's, early 80's, or any other financial crisis in recent memory, certainly can see that things are different this time around. I don't know if it will be called a depression, or if they will come up with another word to explain it, but it will be worse than anything we have experienced in our lifetimes and it will be with us for a lot longer than anyone wants it to be. Jerry, I have no interest in bashing McCain (I am an independent, and in my opinion neither candidate is worthy of the job) and I certainly don't hate my country.. but for those of you that say our country is fundamentally strong enough to weather this downturn, you cannot deny the fact that 70% of our GDP is based on consumption. Just how much longer can we continue to consume? Government and consumers alike cannot continue to borrow money to keep consuming things we don't need and all the while pushing ourselves deeper in debt. Sooner or later the rest of the world will catch on that the USA is not a good investment. And sooner or later all debt has to be paid back. Throwing trillions of dollars at a problem so that we can continue "business as usual" is not the answer. Depression or not, the pain of this downturn is going to be felt not just for years, but for generations to come if we continue down the same path we are on.

While I would have to agree that in many ways we are in a far better position now than 1929 I have not seen one difference mentioned at all, and am surprised that it hasn't. In 1929 our currency was backed by gold. While we may succeed in kicking this can down the proverbial road a bit further yet again, there is a reckoning coming at some point.

Everyone keeps pointing the finger at greedy Wall Street. What about personal responsibility? Banks aren’t just throwing money at people…people have to come and ask for it. Why do people treat equity in their homes (mind you, equity on the MARKET VALUE, not current principal vs. what they paid for their house) like an ATM? I don’t understand why people get excited to hear their homes appraised at $100,000 more than what they paid and think this means they can re-finance and pay off a car loan – hello…you will need a new car in 5 years so tack on another car loan to that higher mortgage payment. What happened to refinancing so you can LOWER your payment? I also had a neighbor that foreclosed they took out 2 home equity loans to cash out on their rising equity, despite knowing they were moving in a year….they moved and said “bye-bye” – Literally, I saw no remorse in these people. No, Banks are not excused for issuing bad paper, but we need to look at both sides.

Ron Paul for Treasury secretary....!!

Here we go again, blaming Wall Street. The reason so many loans were made to un qualified recipients is because the democrats forced them to make the loans. Started by Carter and mandated by Clinton Freddie and Fannie made ridiculous loans to mostly minorities and now the democrats have them where they want them. Poor and broke, voting away for the messiah. Anything to get into power. What's so ingenious about there idea is that they have convinced everyone the republicans screwed the economy all up. It wasn't free markets that collapsed the system it was the quasi socialist/capitalistic venture called Freddie and Fannie. These organizations were put smack dab in the middle of a free market economy right where it counts, with housing, and the result is sure disaster. You can't socialize losses and privatize profits without greed setting in. OBAMA looked the other way as he pocketed the second largest amount of money in the Senate from Franklin Raines. Who left with 91 million. Please OBAMANONS listen up. Your going to get screwed even more with OBama. May God help us all.

Welcome to the Socialist States of America!

I can't believe the number of people who continue to blame the Republican's for this and John McCain. Clinton was the first to push for loans to insolvent individuals. Now the government is going to bail out everyone who overextended themselves or made bad choices and the purpetrators or perp-it-traitors who have already absconded with their loan fees and ill gotten gains will walk scott free. While home ownership is a good thing; some people are not responsible enough to own thier own home. Don't forget that the Democratic congress would not back McCain in his 2005 attempt to stop this insanity. Barney Frank and Chris Dodd got their Goodies and lied to the American Taxpayers. Then when called on the carpet about it cry foul. The inflated assetts are there and if instead of bailing out those who made bad decisions those assetts could be siezed and auctioned off to restore some of the taxpayer's trillion dollars. If you think things are bad now because people ran on the stock market instead of holding on just wait. In '29 the same thing happened only there was no FDIC. Just elect all Democrats and see what happens we will have a Socialist government, open borders, and every hard working American will be screwed. We will have English as a second language and if you can't speak Spanish you won't be elligible for a job. Obama has been smart by voting present he has managed to hide or mask any record and the economy and ignorant voters who aren't looking beyond their hatered of Bush aren't looking into the real Causes. Bush has to bear some of the blame but this reaches back years and has it's real roots in the other party. God help us. Look at the socialized Medicine in Britain and Canada. If we go that route here where will people go for medical care: India or China? If they can afford it? Will they put an age cap on ByPass surgery or just deny treatments if they are too expensive. Obama isn't for Nuclear or Coal or Offshore drilling, our easy relatively quick fixes to sending money to our enemy's but talks about future "Pie in the Sky" maybe solutions years down the line. Let Pelosi, Dodd, Frank and their friends run this economy into the toilet and pull the lever or wake up and keep the house divided and put a man at the helm with a proven honest bipartisan record or see william Ayers as a presidential advisor on Education.

One should look at the simularity. The Great Depression dealt with stocks being leveraged. Today we have converted a hard asset, real estate, into a commodity and have leveraged it. The underlying derivative values of some of these investments are strikingly simular!

The Resolution Trust Corporation did have a negative effect on "We The Taxpayer" because the assets were bulked and sold for pennies on the dollar(many to politicains blind trust) our local property values had a negative market value which caused a negative tax base value that had to be compensated for with higher taxes.We Paid! Once the bill was paid did our tax rate go down? NO, in walks the good intention politicians to spend the surplus. Nothing for Joe six pack once again. This time we must ensure that our voice is on the table and that those asset auctions get more bang for the buck by implementing a housing lottery that gives access to debt free capital assets to "We The People" - we work hard and have paid for those assets, we demand access to them! Grace be with you all....

"...as the government has created a $700 bn mega-dumpster to buy at auction rotting paper that was crafted by habitually self-deceiving, hubristic hustlers on Wall Street, who, unburdened by conscience, felt entitled to follow their own codes of conduct as they went berserk enriching themselves." Absolutely fantastic writing. Sent shivers up my spine. I agree with the main point. For now. If we can contain this crisis and keep people from panicking, we should buy enough time for the rescue plan to work. Somebody has to get these banks lending money. At rates that resemble their cost of borrowing. At a fairly low cost, if the loan packages are competitive and fair, Americans could refinance their mortgages and lessen the strain on their finances. We'd lower the foreclosure rate, create some sense of fairness and confidence with the main street crowd who are financing this bailout, and perhaps open the spigot of consumer spending to keep the economy from tanking. As potential part owners of these banks, the public deserves a sweetheart deal like Chris Dodd's, no?

BRING ON THE DEPRESSION! PREPARE NOW FOR MARTIAL LAW! WATER, FOOD, GUNS, AMMO!

No, you're right it probably won't be like the Great Depressiion. Instead it looks more like we're turning into Japan circa 1990. 'Lost Decade' 2.0 here we come.

Anyone who is saying that we are headed to another depression is making that statement premature. However, anyone saying we are not is doing the same. To say you know or understand where we are going to be in 3 years is ridiculous. Remember, unemployment didn't hit 25% until 1932. The "crash" started to decline in 29. I would advise not to jump your guns either way.

The Liberals are just loving this Depression comparison. They want to be the saviors. Well Obama, you're not my savior. Is there any information out there that talks about how consumers buying everything on credit and not paying it back is having a backlash? We talk about the greed on Wallstreet, but there are thousands of people out there who charge everything to look successful and feel good about themselves. Isn't this a huge problem as well?

Thus volitile market activity is interesting for a variety of reasons. I'm not one of those whose who crys like chicken little. I try to understand the market envoriment which is a constant shift from one sector to another. This isn't the late '20s when President Hoover increased taxes nor the early '30s when FDR was in office and his own ideas prolonged the great depression. That was then. This is now. Since the Black Monday of '87 the market has circuit safeguards in play. It isn't post 9/11 stock market neither for the market is in fluz. It's constant flux has us guessing with a point drop or a point rise. A bank feeling the squeeze of a credit crunch in Asia,Europe and Russia? When this new market shakes things out and the dusts settles new safeguards are going to come in play. Right now--there is no need to cry depression panic right now. Overall the constant market volitity makes business news intreresting. Why? U don't what the next day is going to bring. Or what Central Bank is going lower/cut rates. Wait and See.

The underlying cause of all of this is excessive debt at all levels of society and government. How is the government's consumption of even more billions of dollars going to resolve this? It won't. The whole world has overextended itself and there is a limit. We are at that limit.

This situation is, overall, worse than the first Great Depression. In the first one, society moved forward out of the Depression by strongly committing itself to developing a true, strong middle class. This recession or depression has come about partly because the middle class over the last quarter century or so has been overwhelmed by debt and by forces making the rich richer and the not rich less richer run amok. But will there be huge new government programs for developing a stronger middle class as a result of this recession/depression? No, and everyone knows it. The federal government is already essentially bankrupt, so obviously there will be no post recession or depression big improvements for the roughly 2/3 of the population that became middle class at it's peak in the 1960's and 1970's. So even if it's true that this recession/depression is not as bad as that of the 1930's, the overall situation is worse, because there will be no golden, high growth 1950's-1960's coming out of this. In fact, there will most likely be nothing much whatsoever coming out of this other than a more or less permanent reduction of economic growth and living standards which, actually, would only be a big intensification of trends that were already happening before the crisis. The future lies with countries that respect ordinary people in general and the middle class in particular. The United States is not one of those countries anymore.

EcoMom and Ralph Harrison are spot on! Is it too late to add someone on the ballot? They'd make a better ticket than either of the two major parties' current choices.

Could it be Paulson is trying to find himself a new crony job---He should know where all the "Bailout-Rescue" loop holes are since he is making them for his next Wall Street job....

The goverment took the lid off a jar that they will never get back on. We were told that there was not a recession but the people have known it for a year. Next they will tell us there is no depression but the people will know it first and they will admit it later. There will be a depression!

First point: I see no evidence as yet that the bottom is near. In fact, it seems that everything that is tried to stop the bleeding has failed. They tried dropping the interest rate by .5 %, and even got major European national banks to follow suit. That didn't stop the bleeding. The interest rate is now 1.5 %. They can't drop it much farther. What will stop this? Only one thing, as far as I can see: investors have to believe the market is at the bottom, or near it, and decide that it's time to start buying bargains- a LOT of investors. That and only that, will stop the free fall. So, how do we get investors to believe that? One possibility is to eliminate the capital gains tax. If people believe they can make profits without paying inordinately high taxes (they'd still have to pay taxes on the profits as regular income), they are much more like to take a chance that the bottom really is near, and it would likely become a self-fulfilling prophecy. Second point: There is much more to this crisis than a falling Dow. The government just passed a bill that will allow them to borrow (in essence, create) 700 billion dollars (some say it is more, but let's be conservative). That will devalue the dollar, and cause inflation- high inflation. Runaway inflation will most likely be the catalyst that finally sparks off the total economic collapse when and if it comes. Third point: the FDIC. Ok so, our money is insured for up to $250,000. That's great! But what happens when these banks fail, and people want their money? The FDIC doesn't have enough cash on hand to pay out for any single major bank's deposits. How would they pay out for several of them? Answer: they will again have to borrow (create) it. How many 100s of billions for that? Again, more inflation. Look, I'm not going to say that the economy is going to collapse (because I for one can't see into the future), but we should all consider the possibility that it might, and stop trying to blow sunshine up our nether-regions. Even without a total collapse, things are going to get worse- far worse. This is going to be BAD, folks. Don't fall into the trap of believing it's all going to come out ok in the end.