We all look forward to laugh Top Ten List David Letterman.
Sorry to say that the following list of our economy is not sad that you will be much of a chuckle, though.
Evidence is mounting that things are in fact always fear out there, and what is worse, we are all more or less in denial about it. It's like we're sitting around a campfire trying to scare away a large grizzly that wandered into our camp. Sorry to say, "scare" or "slip" or just "away" is as good as nothingup to 800 pounds of hungry, grumpy bear not to speak English.
So while many analysts and talking heads believe that the idea of a severe recession or even depression is ridiculous is the case that this building economic days that we live now, can always be as bad as Hoover's first year in office.
That said (drum roll, please), here is ...
THE TOP TEN LIST, why the prospect of another depression is not funny
Okay ... Number ten ...
# 10 /According to Nouriel Roubini, former senior advisor to the U.S. Treasury, the FDIC has already depleted 10 percent of its resources rescue IndyMac alone. He believes it will quickly run out of funding the rescue of other troubled banks now set up around the block and will be rehabilitated by Congress (ie, American taxpayers) in the near future.
This brings the question, many banks did not during the Great Depression? Is Tiger Woods in golf right? There were about 60 banksOutages in the month through most of 1930, then 254 in November and 344 in December of that year. In fact, from 1929 to 1933, 10,000 Bank simply disappeared (there were only 25,000 to start). If something like that happening today, Washington would be frantically printing increasingly worthless dollar afloat only by the banking sector. In any case, an amusing prospect.
# 9 / Roubini also had a great observation on the next Fannie Mae and Freddie Mac bailout, another intolerableBurden on taxpayers. He said that the Treasury rescue plan is "socialism for the rich, the well connected and Wall Street, it is the continuation of a corrupt system in which privatized profits and socialized losses." Nothing funny about that.
OPTIMISTIC - or quite UNINFORMED - PROSPECTS
# 8 / "I see nothing in the current situation, which had either menacing or warrants pessimism. I am fully confident that there is a revival of activity in the spring and willthat in this coming year, the country is progressing well. "Andrew W. Mellon, the former U.S. treasury secretary, said that delays on 31 December 1929, two months after Black Tuesday. The Great Depression his cheery prediction by about ten years. Unfortunately, as blind experts are out there at this moment to the economic downturn is not of great importance.
And do it with straight faces.
# 7 / early October 1929, taxiDrivers, hairdressers and many ordinary people felt stock-market range. "The first day in October 1929 made me feel like I was rich," wrote the Greek immigrant and restaurant owner, George Mehal. After a few weeks, was extinguished, the man. "I had nothing left." That is because they stock just two days was during the Great Crash to shed 20 percent of its value is. But that was not the worst: Three years later, stocks decreased astonishing 90 percent.
Ancient history? Maybe ... until youto recognize that we are in something of a free fall itself. From July 07 until July 08, stocks were also 20%. Have we reached bottom yet? Not according to the Royal Bank of Scotland, the bank that these funny commercials produced. Bob Janjuah, is Senior Credit Analyst, warned of a stock market crash in Autumn. Not exactly something to conjure up a smile on your face.
The dreaded "Hobson's Choice" THIS FALL
# 6 / Speaking of Bob Janjuah, he referenced in Hobson's ChoiceDiscussion about the probability of a stock market crash in Autumn. Hobson's Choice is one of the paradoxes be damned "if you will be doomed to do, if you are not related" type of thing that freedom of choice where only one option makes sense to ... But no one wants to even think about taking that one.
In this case, the choice between raging inflation and higher interest rates. The obvious choice would be to raise interest rates ... Although the Fed does not want to be caught doing the dead. The result is quite possiblea contracting Janjuah stock market collapse. In truth, he may be some credibility in these matters, and accurately predicted the start of the current mess, credit crisis last year.
# 5 / The world can no longer find our debt amusing, and that our debt-devouring pal, China included. Merrill Lynch recently warned that the U.S. can deal with a foreign "financing crisis" spreading like the "full consequence of Fannie Mae and Freddie Mac mortgage debacle through the world." Unfortunately,America still needs some $ 2 billion per day in foreign capital, one way or another, in order to service its current account deficit.
So what happens if we end up in default? Will the world foreclose on us?
DOLLAR AT THE WORLD'S deposed currency?
# 4 / The price of gas is the wild card in this 2008 version of the recession / depression. In the 1930s, energy prices, a non-factor-a gallon of gasoline had cost about 10 ¢. This time, however, the cost of getting to work would be deeply incisedin the cost of the meal and the cost of the stay from the weather. Thus, during recessions, even depressions, and (possibly go), today's one-of-a-kind energy costs can also prolong the economic misery and to recover any delay. And that some pretty serious stuff.
# 3 / The aforementioned Nouriel Roubini had this alarming prognosis on our tanking dollar: "The Bretton Woods 2 regime of fixed exchange rates against the U.S. dollar ... will unravel as the first Bretton Woods regime in the early1970s as U.S. twin deficits, recession, financial crisis and rising commodity and goods inflation in emerging economies will destroy the basis for their existence. "Not exactly laugh.
If # 2 / The dollar go the way of the dodo, as horrible as it sounds, the investors would have to be pretty agile fairly quickly in the use of their assets in cash-proof investment. The 1930 was deflationary depression, the smart investor then found the antidote by liquidto anticipate. This time, we should face another depression, it will probably come in the form of diabolical hyper-stagflation and a collapse of confidence ... which are both successfully treated with gold.
And number one on the list ...
# 1 / We still have to deal with financial "experts" as famous economist John Maynard Keynes said in 1927: "We will no longer crashes in our time."
Come on, remember to ... that iskind of funny. *
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