Great Depression coming

[bat1]

Wall Street fears for next Great Depression

By Margareta Pagano, Business Editor
Sunday, 16 March 2008


Wall Street is bracing itself for another week of roller-coaster trading after more than $300bn (£150m) was wiped off the US equity markets on Friday following the emergency funding package put together by the Federal Reserve and JPMorgan Chase to rescue Bear Stearns.

One UK economist warned that the world is now close to a 1930s-like Great Depression, while New York traders said they had never experienced such fear. The Fed's emergency funding procedure was first used in the Depression and has rarely been used since.

A Goldman Sachs trader in New York said: "Everyone is in a total state of shock, aghast at what is happening. No one wants to talk, let alone deal; we're just standing by waiting. Everyone is nervous about what is going to emerge when trading starts tomorrow."

In the UK, Michael Taylor, a senior market strategist at Lombard, the economics consultancy, said on Friday night: "We have all been talking about a 1970s-style crisis but as each day goes by this looks more like the 1930s. No one has any clue as to where this is going to end; it's a self-feeding disaster." Mr Taylor, who had been relatively optimistic, has turned bearish: "It really does look as though the UK is now heading for a recession. The credit-crunch means that even if the Bank of England cuts rates again, the banks are in such a bad way they are unlikely to pass cuts on."

Mr Taylor added that he expects a sharp downturn in the real UK economy as the public and companies stop borrowing. "We have never seen anything like this before. This is new territory for us. Liquidity is being pumped into the system but the banks are not taking any notice. This is all about confidence. The more the central banks do, the more the banks seem to ignore what's going on."

Mr Taylor added that the problems unravelling at Bear Stearns are just the beginning: "There will be more banks and hedge funds heading for collapse."

One of the problems facing the markets is that, despite the Fed's move last week to feed them another $200bn, the banks are still not lending to each other.

"This crisis is one of faith. We are going to see even more problems in the hedge funds as they face margin calls," said Mark O'Sullivan, director of dealing at Currencies Direct in London. "What we are waiting for now is for the Fed to cut interest rates again this week. But that's already been discounted by the market and is unlikely to help restore confidence."

Mr O'Sullivan added that the dollar's free-fall is set to continue and may need cuts in European interest rates to trim the euro's recent strength against the dollar. "But the ECB doesn't like cutting rates," he said.

On Europe, Mr Taylor said that while the German economy remains strong, others such as Italy's and Spain's are weakening. "You could see a scenario where the eurozone breaks up if economies continue to be so worried about inflation."

European financial markets were relatively unscathed by Wall Street's crisis but traders expect there to be a backlash when stock markets open tomorrow.

The Fed's plan will give 28 days of secured funding to Bear Stearns, which saw its value slashed over the week by more than a half to $3.7bn. JP Morgan will provide the funding, but the Fed will bear the risk if the loan is not repaid. Fed chairman, Ben Bernanke, who pumped $200bn of loans to cash-strapped institutions last week, said more would be available to help others in distress.

[thx1138]

and it's not going to get any better until/unless bush and cheney are history. The people who lose their jobs and homes are the one who are going to suffer the most. I don't give a damn if a Wall st. fat cat's income goes down from $50 million a year to $10 million a year.

[south ov da border]

OK-DON'T THINK THAT I'M GETTING CONSPIRACY THEORY ON EVERYONE.

The problems we have financially as a nation goes way deeper than who's president or what a government can do for us.

The whole system of finance as it is was set up to fail.

Right now in America we are in a situation similar to Germany before the Hitler regime.
Between 1914-1918 during WWI, German deficit reached 1.5 billion, around 15% of their total budget. By 1921 their interest rate was about 5% and inflation doubled. Instead of admitting to a recession, especially because war was draining all resources, they manage to keep printing money. The foreigners were starting to get blamed for their mark’s woes. The government did not allow foreign currency to be purchased to protect assets. Foreign companies had currency gains because of the falling mark. In 1922 their Fed kept the interest rate at 5%. By November it swelled to 7%. Now take into consideration their markets from 1914 until then rose 900%. That was BEFORE HYPERINFLATION. Foreign companies were getting richer, the haves got fatter, the nots NOT.

By January’23 interest rates rose to 19%. By April 30%. By September it swelled to 90%. Their market rose SO high that the foreign companies were raking it in like harvesters. November 23rd of that year, marks were deemed worthless.

Marks got replaced by the Rentenmark, a rate of 1 billion marks to 1 Rentenmark. Not too many years after that HITLER showed up.

I’d point out how all of this is relevant to the situation in the US, but I think that there are OBVIOUS similarities to what we have going on now.

Oh and 1 more thing, the same people who were in charge of instituting our Fed Reserve system were German speculators and businessmen like Paul Warburg, who sold the idea to Nelson Aldrich, father of the illegal and never legally passed INCOME TAX. The idea for the FED was for private bankers backing the currency for a whole country, with nobody knowing who these “bankers” were. Around 1920 quotes like this appeared in the NY TIMES, “The Federal Reserve is a fount of credit, not of capital." SO by that language in itself the system is designed off credit and speculation, not anything of actual worth or value. TO have worth, dollars need to be backed by something tangible. NOT in the Fed Reserve where they are not backed by anything but interest. Warburg helped America’s war profiteering in dealing with Germany during WW2, after helping sell Germany into the failing mark, while also earning a lot of foreign cash for himself and other companies at the expense of his German people. Prescott Bush, Dubya's grandfather was part of the profiteering team also. This system was the same for Germany as it is for the US now. -I'm not going to get into who the Bush's really are now, because then I'd have to go into project paperclip, nikoli tesla and a whole bunch of other things that might sound more science fiction than anything.

SO IT WILL BE LIKE IT ALWAYS HAS BEEN-THE HAVE’S vs HAVENOTS. THE REAL WORTH IS BEING KEPT IN FAMILY SO TO SPEAK.

OK I’m done, going back to what I’m really here on this board for, admiring the beautiful ladies…

[envivision]

and it's not going to get any better until/unless bush and cheney are history.

Sure, then vote Obama in 2008.

He'll fix the economy..... by MAKING A SPEECH!

Seriously now, to fix the economy, you need to:
1) LOWER the taxes
2) Compete internationally (China-Inda-Brazil have been kicking our butts the last 5 years). To achieve that we must flex our muscles in the middle east, asia, south america and everywhere else.

Singing Kumbaya ain't gonna do crap.

[Aunt Kay]

1. You don't have enough fingers to point to who is at fault, including all the people who live beyond their means.

2. Neither political party will cure this mess. And it started decades ago, it's just that the boil is getting ready to burst.

3. If you look at economic history, there is a depression every 70 yo 80 years. And politicians tend to make the depressions worse by trying to help (like taxing us to death).

4. The problems are worldwide, not just our system.

5. Face it, things are going to get a lot worse no matter who is elected.

[trish]

and it's not going to get any better until/unless bush and cheney are history.

Sure, then vote Obama in 2008.

He'll fix the economy..... by MAKING A SPEECH!

Seriously now, to fix the economy, you need to:
1) LOWER the taxes
2) Compete internationally (China-Inda-Brazil have been kicking our butts the last 5 years). To achieve that we must flex our muscles in the middle east, asia, south america and everywhere else.

Singing Kumbaya ain't gonna do crap.

1) Lower which taxes? All of them? Schools are in deficit spending. Bridges, dams and roads are in need of maintenance. We've run up three trillion dollars worth of debt thanks to our military incursion in the Middle East. Our asses are going to be owned if we don't start collecting some revenue from the rich son-o-bitches who've gotten off easy for the last 7 years making record profits and not paying anything back to the country which shelters them. Eliminate taxes for the poor. Lower taxes on the middle class. But let's finally collect some revenue from the wealthy and from corporations like Exxon which seems to be in no particular difficulty. How about we initiate a WAR TAX. I'd like to see congress legislate that all wars should be taxed on a pay as you go basis. That includes the war in Iraq, the war in Afghanistan, the war on terror and the war on drugs.

2) Yes, our businesses should compete. But what does that entail? Who should flex their muscles, business, government or the military? Just what do you mean by flexing our muscles and how would it help the economic situation. Do you mean our businesses should just compete better than they have? (If so I agree) Do you mean we should send in our military and force other countries to trade with us on our terms or else? (We've seen that solution can be damn expensive) Or do you mean we should endeavor to negotiate tougher trade treaties? (Negotiation is what singing Kumbaya is all about).

(edited to include a left out preposition)

[Bunzee]

anyone know a good way to invest in Euros for a US resident?

[bat1]

Just do what you can control, save money, anyway you can!
if your BF loves to spend money make him pay the bills or
kick his ass out!

We have no control in what is going on in the world
just do what ever it takes to keep your job, and your savings
things look to get much worse here...so brace yourself
and be strong, it's survival that counts.

[Ecstatic]

I don't know about the Great Depression, but this recession (call it what you will) is the worst since WWII. It isn't Bush's fault, exactly, as many of the problems as pointed out go back years and even decades, but his administration has most certainly exacerbated the situation.

[OnefortheAges]

Interesting that there are so many apologists for George W. Bush, who committed the U.S. to its worst foreign policy disaster in its history, and which eventually led to it being a bankrupt nation.

Oh well.