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Is it finally time to use the dreaded D-word? depression !@!!

 
NIBIRU2012
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User ID: 624570
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03/02/2009 07:31 PM
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Is it finally time to use the dreaded D-word? depression !@!!
History repeats? Job hunters mass for $4 a day work in 1935 and the line unwinds outside a New York City job fair last week. Unlike recessions, there are no firm rules for what makes a depression [link to www.msnbc.msn.com]
Nibiru is coming are you ready? :eq:
Anonymous Coward
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03/02/2009 08:03 PM
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Re: Is it finally time to use the dreaded D-word? depression !@!!
Human cattle......too many of them......time to cull the herd
Anonymous Coward
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03/02/2009 08:19 PM
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Re: Is it finally time to use the dreaded D-word? depression !@!!
The Great Depression of the 1930's did not happen the day after the stock crash in 1929.

It was a progression over years.

We haven't seen the bottom yet.
Anonymous Coward
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03/02/2009 08:27 PM
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Re: Is it finally time to use the dreaded D-word? depression !@!!
Declaring a depression is much trickier.

By one definition, it's a downturn of three years or more with a 10 percent drop in economic output and unemployment above 10 percent. The current downturn doesn't qualify yet: 15 months old and 7.6 percent unemployment. But both unemployment and the 6.2 percent contraction for late last year could easily worsen.

Another definition says a depression is a sustained recession during which the populace has to dispose of tangible assets to pay for everyday living. For some families, that's happening now.

Morici says a depression is a recession that "does not self-correct" because of fundamental structural problems in the economy, such as broken banks or a huge trade deficit.

Or maybe a depression is whatever corporate America says it is. Tony James, president of private equity firm Blackstone, called this downturn a depression during an earnings conference call last week.

The Great Depression retains the heavyweight crown. Unemployment peaked at more than 25 percent. From 1929 to 1933, the economy shrank 27 percent. The stock market lost 90 percent of its value from boom to bust.

And while last year in the stock market was the worst since 1931, the Dow Jones industrials would have to fall about 5,000 more points to approach what happened in the Depression.

Few economists expect this downturn will be the sequel. But nobody knows for sure, and nobody can say when or whether the downturn may deepen from a recession to a depression.

In his prime-time address to Congress last week, President Barack Obama acknowledged "difficult and trying times" but sought to rally the nation with an upbeat vow that "we will rebuild, we will recover."

The next day, Federal Reserve Chairman Ben Bernanke told the House Financial Services Committee that the "recession is serious, financial conditions remain difficult." He held out a best-case hope that it might end later this year, with "full recovery" in two to three years.

Despite the tempered optimism, the economic outlook remains grim. Consumer confidence has fallen off the table, stocks are at 12-year lows, layoffs come by the tens of thousands, and credit remains tight.

The current downturn has many of the 1930s characteristics, including being primed by big stock market and real estate booms that turned to busts, said Allen Sinai, founder of Boston-area consulting firm Decision Economics.

Policymakers and economists note there are safeguards in place that weren't there in the 1930s: deposit insurance, unemployment insurance and an ability by the government to hurl trillions of dollars at the problem, even if it means printing money.

Before the 1930s, any serious economic downturn was called a depression. The term "recession" didn't come into common use until "depression" became burdened by memories of the 1930s, said Robert McElvaine, a history professor at Millsaps College in Jackson, Miss.

"When the economy collapsed again in 1937, they didn't want to call that a new depression, and that's when recession was first used," he said. "People also use 'downward blip.' Alan Greenspan once called it a 'sideways waffle.'"

Most postwar U.S. recessions have come after the Fed has increased interest rates to cool down rapid economic growth and inflation. Later, the Fed lowers rates and helps restart the economy, with the housing and auto sectors -- both sensitive to interest rates -- leading the way.

This time is different: As Senate Banking Committee Chairman Chris Dodd, D-Conn., said, "Our housing and auto sectors are leading us not out of recession, but into it."

What's more, the Fed no longer has the ability to kick-start recovery by lowering interest rates. The central bank has already effectively lowered the short-term rates it controls to zero.

And there are no guarantees the massive economic stimulus package and series of bank bailouts will stave off a nightmare recession, or worse.

"It is certainly plausible that the kinds of policy measures that have been good enough to tame the business cycle are no longer adequate in a fast-moving, highly leveraged, highly networked economy," said Anirvan Banerji of the Economic Cycle Research Institute.


[link to biz.yahoo.com]
Anonymous Coward
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03/02/2009 08:27 PM
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Re: Is it finally time to use the dreaded D-word? depression !@!!
Yes OP, I think we're on our way.
Anonymous Coward
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03/02/2009 08:30 PM
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Re: Is it finally time to use the dreaded D-word? depression !@!!
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