recession fears

NEW -> Contingent Buyer Assistance Program
i read that the the 70s and early 90s were bad but less so on a national level. supposedly, the last time a national house decline of more than 20% occurred only in the great depression. i think we might see 20%+ loss this time so great depression?
 
Before you start to panic, you may want to look at other depression era statistics.





Here are a few stats for you. Fromhttp://useconomy.about.com/od/grossdomesticproduct/f/Depression.htm :





A depression is a severe economic downturn that lasts several years. Fortunately, the U.S. economy has not experienced a depression since <a href="http://useconomy.about.com/od/grossdomesticproduct/p/1929_Depression.htm">The Great Depression of 1929</a>, which lasted ten years. The GDP growth rates were of a magnitude not seen since:

<ol>

1930 -8.6%

1931 -6.4%

1932 -13%

1933 -1.3%.

</ol>

During the Depression, unemployment was 25% and wages (for those who still had jobs) fell 42%. Total U.S. economic output fell from $103 to $55 billion and world trade plummeted 65% as measured in dollars.
 
This will probably be a very bad recession, but nothing of the magnitude of the Great Depression -- except perhaps for housing which is going to drop significantly.
 
I agree that this would be a very bad recession. Probably more like the 1970s situation than the early 90s or early 2000s. It will not be as as bad as the Great Depression given the monetary and fiscal policies put into place currently. The new TAF and TSLF initiatives to control 28-days term rates will help the situation.
 
Recession? Depression? I dunno. What I do know is that there are $40 trillion of credit default swaps marked to who knows what on corporate balance sheets and the counterparties can not pay on even 2%, <p>


Well, I don't know, but it is real bad.<p>


My guess is that when it is all over, 20% of the counterparites will not be able to pay. Just a guess.
 
<i>"The new TAF and TSLF initiatives to control 28-days term rates will help the situation."</i><p>


It will help like giving crack to an addict.<p>


<i>"given the monetary and fiscal policies put into place currently"</i><p>


Doesn't anybody ask what got us here? How does more of the same help the situation? The answer to insolvency is to extend more credit? Everybody seems to understand that easy credit has caused many problems? What is $200B for mortgage paper? Tightening? Am I the only one who sees this as lunacy? And they are going to exchange the paper for treasuries, which the banks will immediately put on the open market. What do you think will happen to interest rates when $200B of treasuries hit the open market?<p>


It reminds me of that old saying, "The definition of insanity is repeating the same behavior and expecting different results."<p>


God help us
 
<p>Who cares.</p>

<p>After the election, the Federal Government needs to raise taxes and cut expenses to balance the budget.</p>

<p>The State Government needs to raise taxes and cut expenses to balance the budget.</p>

<p>The county government needs to raise taxes and cut expenses to balance the budget.</p>

<p> </p>

<p>Do you see a pattern? Meanwhile, the economy slowing because... people aren't spending what they used to.</p>
 
Something is wrong for sure... It's getting easier to get into restaurants. I used to wait 1-3 hours for certain places and now 1/2 the time if not less.
 
I am in the high tech industry and have customers all over the country. Almost all of them have seen significant slow down in their businesses and they span many verticals so its not just 1 type of business.



Personally, I think we are heading into a serious recession. Just check out the stores and parking lots at the malls...
 
Depression is coming. It doesn't have to mean a 25% unemployment rate though. We just need an actual contraction in GDP. IMO that seems easily attainable.





I can't remember where I was reading it, but a major depression happens every 75 years. This is ample time for the generation that experienced the previous one to pass away.





<em>Here comes another headache for banks suffering from the mortgage downturn: Losses on home-equity loans are soaring ...





"These losses are well beyond what we would have modeled...and continue to get worse," said Charles Scharf, head of J.P. Morgan's retail business.





</em>How the hell can the end be pretty when banks couldn't even imagine these things would happen? They all got caught with their pants down. Awgee is right about all the outstanding CDS out there. Terrifying. I can only imagine that this will end with some sort of massive world wide debt forgiveness plan. Fight Club anyone?
 
Awgee



Stop taking only certain sentences and make them seem out of context. Again, I think we have a recession but the new TAF and TSLF is needed to avoid a disaster of massive job lost and total carnarge. The Japanese stood around and did nothing when their housing market collapse and are where they are at today?



You need to provide tools to ride thru the rough patch not just stand there. That would be irreponsible. The question is how big of a hole do we want to climb out of as a nation. One where we see 25 percent unemployment or a minor one. We can always reign in lending standards after we get thru the next few years.
 
We are in a housing depression RIGHT NOW. A depression with a d. In other areas, recession only, and not too bad so far. But with the cascading cross defaults (Roubini does have a way with words.), who knows what will happen?
 
> The Japanese stood around and did nothing when their housing market collapse and are where they are at today?



They stopped the rampant inflation, learned not to trust banks, saved their money, and are now poised to become a major exporter to China.
 
>They stopped the rampant inflation, learned not to trust banks, saved their money, and are now poised to become a major exporter to China.





Ummm, they entered a decade and a half deflationary spiral. Could you spin it any more?
 
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