GetSCORECash

Just posted on:
http://money.cnn.com/2008/09/17/news...ion=2008091713

Interesting article with a political twist in the end.

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Eriic

The depression is here for both cases of mental and financial stress....

saiyanknight87

it's definitely a recession whether they wanna believe it or not.

kane

Here is what I wonder though. I'm not an economist but I read that the base formula for the GDP is GDP = consumption + gross investment + government spending + (exports − imports)

So if this is accurate you could easily see how the GDP is a poor indicator of whether a recession was on us or not. The reason is our government is spending around 400 million a day in Iraq not to count Afghanistan and all the other spending the government is doing. Also oil alone is costing this country around 700 billion a year. Those two indicators alone could throw off the equation.

The unemployment rate has gone up every month but Feb of this year and is still rising. But exports have actually been on the slow rise this year. GDP Per Capita (meaning the average spending power per person) has risen slightly, but average hourly wage has dropped more than it has risen. Spending power per person can be a little misleading because these people could just be racking up a bunch of dept as they spend.

To me all this signals somewhat of a recession. People are spending money, but they are spending more on gas and food and essentials than ever before. It seems people making a decent, average, living are doing okay, but probably spending beyond their means and they are creating debt for themselves in the process and those making very little are having tough times.

kahell

still lots of people are shopping in malls and bar hopping

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mynameisjim

I forget the details, but I read an article in Scientific American about some economists using a modified version of GDP that includes different metrics to more accurately reflect the times we live in and what effects our economy. The results where that our economy has actually been shrinking for over a decade.

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Drake

I have a question for economists on GFY. Is it possible (within reason) for us to ever face a 1930 style depression ever again where people wait in lines for bread etc. within the next 100 years or so? Or is that basically a thing of the past that is virtually impossible to recur? The economy is much more complex today compared to 1930, globalized, different trade policies, and many more checks and balances in place, different technology infrastructure and so on. Just curious about more expert insight into it.

kane

Yes we could face that. It would be more difficult to have something like that happen now than in the 1930's but it could. There was a guy on Fox News a little while back that gave a doomsday scenario with oil that could easily be the start of something like this. He basically said that as we continue to be more and more dependent on foreign oil and the price of it continues to rise we buy exactly what we need and sometimes have trouble getting that much. Basically we are living hand to mouth on our oil supply. So what if one day something happens and the supply is cut off even if it is only for a week or ten days? What if they just decided to not sell to us? Everyone would panic and run out and fill their gas tanks. With that happening we would drain the gas supply we have on hand dry within 36-48 hours. People would also hit the stores and buy as much food as they could afford. Within 48 hours the stores would be empty and we would be out of food. With no gas we have no way of getting more food to the stores. As soon as people's personal food supply gets low they panic and when panic sets in we are in big trouble.

This may not lead us directly to a depression, but without gas people could not get to work, the companies would stop making money, the economy would come to a dead halt and if it wasn't jump started pretty quickly it could lead us down a very ugly path.

I don't think anything would happen that would last for years and years, but I could see something that could last several months and then take years to fully recover from.

spunkmaster

The main reasons for the depression were high interest rates (6%) and the larger banks stopped lending to the small town banks.

They learned this lesson and the Fed is pumping money in to the system (120 Billion $$ the last three days) and they are keeping interest rates at 2%.

The banks are also joining together and loaning each other money as well as overseas
banks are pumping money in to the system to protect their investments.

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WWC

Dont make me say the D word please..... yes we are in recession but will change back to maybe not the same decent....but there are also lots of changes in todays living.

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Bossman

Not an economist, but there are people today that go to bed hungry, however most of these are living in underdeveloped nations. The US might be in debt, but its still one of the most developed nations on the planet, which means that the tools are there to keep minimal civilized standard of living.

The current crisis might look bad, but it serves a purpose, and that is to get rid of bad debt, and hopefully the bad structures + decision makers who created it.

Just remember that there will be no creation, if there was no destruction. So embrace the changes, and prosper

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qxm

... We are in a financial shit hole.... just heard a huge bank in China wants to take over Bear Sterns .... now thats truly fucked .....

</lol>

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Biggy

No, not possible, its possible for things to get worst, harder for people to pay the bills, etc, but it wont be people in line waiting for bread simply due to quality of life improvements from 80 years ago - different world, different society, etc. Thats also not to say things can get bad and quality of life will come down, but with technology, we're able to be more productive.

Antonio

Nobody can give an answer for the next 100 years, for all I know we can be invaded by aliens with big cocks who will make us their bitches. But ala 1929 crisis is very unlikely, I've witnessed the collapse of the economy of BUlgaria more than a decade ago (one of the poorest countriesd in Europe) - banks were closing down, inflation skyrocketed, a sandwich was $0.50 one day and $4.00 the next, you get the picture.

Yeah, people were scared, lots of people left the country for greener pastures but lines for bread? Starving families en masse? Nope, nothing of that happened. And to happen to the richest country in the World you'll probably need:
idiot president
nuclear war
aliens with big dicks invading us
^^^ all at the same time

Right now you only have the idiot president ;)

sexxxydesign.com

this are the times where it pays off to be Argentinian.. we are sooo used to this kind of crisis that we know how to survive .. AMATEEEURRRSSS !!!!

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