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As the economy drifts listlessly going into this holiday season, thoughts of sugar-plumbed call options and zombie companies (Fannie Mae (FNM), Freddie Mac (FRE), and Citibank (C)) are dancing in the heads of day traders, fund managers and CNBC. Hooray, hooray, everything is OK! Well, not quite. While Wall Street is feasting on the greatest secular bear market bounce in history, Main Street is experiencing persistent and formidable economic famine, the likes of which, have not been seen the Great Depression – which recorded the second greatest secular bear market bounce in history.

10 Reasons to Believe That We're in a Depression by: Marvin Clark November 19, 2009 As the economy drifts listlessly going into this holiday season, thoughts of sugar-plumbed call options and zombie companies (Fannie Mae (FNM), Freddie Mac (FRE), and Citibank (C)) are dancing in the heads of day traders, fund managers and CNBC. Hooray, hooray, everything is OK! Well, not quite. While Wall Street is feasting on the greatest secular bear market bounce in history, Main Street is experiencing persistent and formidable economic famine, the likes of which, have not been seen the Great Depression – which recorded the...

The Effectiveness Of Fiscal And Monetary Stimulus In Depressions Miguel Almunia Agustín S. Bénétrix Barry Eichengreen Kevin H. O’Rourke Gisela Rua 18 November 2009 There is one important source of information on the effectiveness of monetary and fiscal stimulus in an environment of near-zero interest rates, dysfunctional banking systems and heightened risk aversion that has not been fully exploited: the 1930s. This column gathers data on growth, budgets and central bank policy rates for 27 countries covering the period 1925-39 and shows that where fiscal policy was tried, it was effective. The debate over the effectiveness of stimulus rages on...

A study by researchers at the University of Bergen, Norway, and the Institute of Psychiatry (IoP) at King's College London has found that depression is as much of a risk factor for mortality as smoking. Utilising a unique link between a survey of over 60,000 people and a comprehensive mortality database, the researchers found that over the four years following the survey, the mortality risk was increased to a similar extent in people who were depressed as in people who were smokers...

Brad DeLong has long argued against the fears that we could head into something like the Great Depression. But now the UC Berkeley economist has turned a bit bearish on the economy. From DeLong: For 2 1/4 years now I have been saying that there is no chance of a repeat of the Great Depression or anything like it -- that we know what to do and how to do it and will do it if things turn south. I don't think I can say that anymore. In my estimation the chances of another big downward shock to the U.S....

1931 January -- Texas congressman Wright Patman introduces legislation authorizing immediate payment of "bonus" funds to veterans of World War I. The "bonus bill" had been passed in 1924. It allotted bonuses, in the form of "adjusted service certificates," equaling $1 a day for each day of service in the U.S., and $1.25 for each day overseas. President Hoover was against payment of these funds, saying it would cost the Treasury $4 billion. February -- "Food riots" begin to break out in parts of the U.S. In Minneapolis, several hundred men and women smashed the windows of a grocery market...

CNN) -- A goalkeeper for the German national soccer team apparently killed himself by stepping in front of a train, just months after he and his wife adopted a daughter, police said Wednesday. Robert Enke, 32, was captain of the German top-division soccer club Hannover 96 and had played in eight games for his national team. He was widely expected to be the German team's keeper in the 2010 World Cup. "Preliminary police investigations indicate a suicide," Hannover 96 spokesman Stefan Wittke said. Enke died about 6:25 p.m. Tuesday. His wife Teresa said he left a suicide note. She said...

Stock Market Investors Needn’t Fear A Double-Dip Economic Recession Nov 09, 2009 - 05:56 AM By: Money_Morning Jon D. Markman writes: A new report contains some very good news for investors: Double-dip recessions are very rare. That means that a drop back into recessionary conditions looks less and less likely even as unemployment creeps higher and has crossed the 10% threshold for the first time in a quarter century. After reviewing U.S. economic history all the way back to the 1850s, Deutsche Bank AG (NYSE: DB) economists found that double-dip recessions are exceedingly rare: There have only been three episodes...

Celente says we are going into a manufactured depression and in America we will call it obamageddon.

There were, once upon a time, usury laws that generally held any interest rate greater than 10% was illegal. The Federal Reserve under Paul Volcker believed that interest rates needed to be raised to insane levels to stop the runaway inflation, which was the first stone that hit the water sending the shock waves that we are having to pay for today. Once the usury laws were altered so the Fed could fight inflation, it set in motion the doubling of household debt, not to mention the national debt. At 8%, the principle is doubled through interest in less than...

Markets, be they stocks, emerging markets or commodities, have rallied too far, too fast because the global economy will experience an anemic recovery rather than the hoped-for V-shaped recovery, New York University economist Nouriel Roubini said on Wednesday. Roubini, who became famous for predicting the unraveling of the housing market and the credit crisis, said that the current "party" can continue for another six months. But it will eventually end badly, he warned, as much of the rise in asset prices since March is yet another bubble created by a huge pool of global liquidity. "I'd argue that rally has...

Scary Specter Of '30s-Style Economic Depression Commodities / Gold & Silver Stocks Nov 04, 2009 - 02:24 AM By: The_Gold_Report Jay Taylor, who publishes Gold, Energy & Technology Stocks and hosts his "Turning Hard Times into Good Times" radio program each week, is hoping and praying for deflation to help the U.S. heal its wounds and find its way back to prosperity. He has reasons to think the dollar might bounce back, too. Nevertheless, Jay reminds The Gold Report readers about frightening parallels to the 1930s and doesn't dismiss the possibility of a hyperinflation that renders the U.S. dollar about...

Is Debt-Deflation Economic Depression Just Beginning? Economics / Great Depression II Nov 02, 2009 - 03:12 AM By: Mike_Shedlock Last Thursday I received an email from David Meier, Associate Advisor at the MotleyFool concerning Debt-Deflation. David asked if I had any comments on his article Debt-deflation: Just the beginning? Here is a partial listing: The debate rages on. Is inflation or deflation the bigger threat? There are lots of people -- lots of smart people -- on both sides of the debate and they present lots of good arguments. One thing that I have not seen -- and maybe I...

Eighty years ago this week, the stock market crashed. Although it was more a symptom of the economy's underlying problems than a cause of the Great Depression, it is still considered the day the worst economic crisis in American history began. I've always been curious about the Great Depression. In fact, I think I decided to study economics because of it. As a child, I remember asking father about its causes, and he told me that there wasn't enough money for people to spend. I asked where the money went, thinking that vast amounts of currency and coin couldn't have...

The new economic statistics put growth at a healthy 3.5% for the third quarter. We should be dancing in the streets. No one is, because no one has any faith in these numbers. ... No one thinks we're entering a new age of abundance. No one thinks it will ever be the same as before 2008. * * * The biggest threat to America right now is not government spending, huge deficits, foreign ownership of our debt, world terrorism, two wars, potential epidemics or nuts with nukes. The biggest long-term threat is that people are becoming and have become disheartened,...

Green shoots are blossoming, Obama is smiling and somewhere Bernanke is patting himself on the back. Folks, I am pleased to announce that things are looking very rosy and judging by the crooks traders driving the stock market it would appear they agree. BEA's report confirms the speculation well at least the headline that so many idiots economists on TV have predicted, things are getting better; GDP increased at an annual rate of 3.5 percent. Time to put that 401K back to work and buy another house. Let's look at the report: Real federal government consumption expenditures and gross investment...

The Associated Press noted last week that the federal deficit reached a record $1.42 trillion for the fiscal year that ended September 30. Up until now, most of the mainstream media have either ignored the exploding deficits or declared them a good thing, since they were supposed to lift us out of the recession. But now that the full figures have come in even some Obama-friendly media stalwarts are struck by their enormity. This awakening is heartening. The AP report does a good job of putting the deficit number against some other figures to give a sense of scale. The...

Remember last spring, when many Republican governors balked at accepting Stimulus funds? Governors such as Rick Perry and Bobby Jindal sounded the alarm that these funds came with many unpalatable strings attached. Well, it hasn't taken long for the chickens to come home to roost, as Rev. Wright would say. The United States, thanks to the policies of the Obama Administration, officially is in the midst of the longest recession since 1933 according to the National Bureau of Economic Reserach. While the federal government can deficit spend in unheard of amounts, the states cannot. Because of the continuing high unemployment...

<p>When the nation's gross domestic product comes out Thursday morning, it'll show the first quarterly improvement since the April, May, June period of 2008.</p> <p>But I dare you to try telling your family or acquaintances that the recession is over.</p> <p>So, what's going on?</p>

Eighty years ago this Thursday, the Great Depression began. While the great stock market crash of 1929 actually began on Oct. 24, it was the fourth day of the crash, Oct. 29, 1929, now known as Black Tuesday, that confirmed the severity of the four-day decline and alerted the world to the fact that not all was well with the U.S. economy. Those who appreciate historical rhythm will probably be aware that the most intense part of the subsequent depression was the four years from 1930 through 1933 that Milton Friedman described as the Great Contraction. Although 1929 marked the...

Tent cities in Sacramento, CA.

It is well known that during the nation’s gale-force recession, many older Americans who dreamed of retirement continued to work, often because their 401(k)’s had plunged in value. In fact, there are more Americans 65 and older in the job market today than at any time in history, 6.6 million, compared with 4.1 million in 2001

Northwestern research finds drugs aim at wrong target CHICAGO --- More than half the people who take antidepressants for depression never get relief. Why? Because the cause of depression has been oversimplified and drugs designed to treat it aim at the wrong target, according to new research from the Northwestern University Feinberg School of Medicine. The medications are like arrows shot at the outer rings of a bull's eye instead of the center. A study from the laboratory of long-time depression researcher Eva Redei, presented at the Neuroscience 2009 conference in Chicago this week, appears to topple two strongly held...

Once in a while, a book comes along that shakes so many of your core beliefs that you are left questioning either the integrity of what you have read or your own knowledge. In this particular case, I had the privilege of a sneak peek at The Return of the Great Depression by Vox Day and with most certainly can state, it is the latter. RGD as it shall be referred to from now on, as can be inferred from its title makes a very compelling case as to the state of our economy and where this nation is potentially...

Good old Biden. Evil guy but damn if he can't give you a good laugh when you need one. Thanks for admitting the US is in a depression Joe. Damn right it is. And not just a I-regret-voting-for-Obama depression either. More like because you guys are moving us faster to socialism/fascim faster than you can say "Uncle Stalin". Here's the bill. Front side first. For the whole series of Zero dollar bills, go here: "Flickr Archive of Zero Bills"

Debt Spiral Financial Holocaust Fiat Currencies Zero Bound, The Next Down Leg Stock-Markets / Stocks Bear Market Oct 18, 2009 - 11:10 AM By: Ty Andros The demise of the G7 financial systems, currencies and economies continues to march along as incomes collapse. The social welfare states and their banking system’s Ponzi finance-based economies are BROKE, their obligations and promises irredeemable and unpayable. A debt spiral is in full view, irreversible with policymakers unable or unwilling and opposed to making the changes required to CREATE PRIVATE SECTOR INCOME GROWTH and control SPENDING, and which must be done to avert the...

The Greatest Depression Is Coming by: Mac Slavo October 17, 2009 Mac SlavoGood times will not be returning any time soon. We continue to lose jobs month over month. And, while the statistics being released are showing a slow down, this is basically a fabrication. There are thousands of people falling off of unemployment compensation each week — none of them are reflected in the official numbers. Shadowstats.com estimates unemployment is above 20%. Take it for what you will, but these numbers are rapidly approaching the unemployment rate during the last well known depression. Credit is contracting. The last decade...

This global recession will turn into a "full-blown depression," Nicu Harajchi, CEO of N1 Asset Management, said Friday, adding that global stimulus hasn't come down to Main Street. Wall Street is making money, while consumers aren't, Harajchi told CNBC. "We have seen the G20 coming out with cross border capital injections of $5 trillion this year… But a lot of this money hasn't really come down to Main Street," he said. "When it comes down to corporate America, corporate Europe or even in Asia, in Japan, we are not seeing Main Street making any money," he said. "Consumers are losing...

This global recession will turn into a "full-blown depression," Nicu Harajchi, CEO of N1 Asset Management, said Friday, adding that global stimulus hasn't come down to Main Street. Wall Street is making money, while consumers aren't, Harajchi told CNBC. "We have seen the G20 coming out with cross border capital injections of $5 trillion this year… But a lot of this money hasn't really come down to Main Street," he said. "When it comes down to corporate America, corporate Europe or even in Asia, in Japan, we are not seeing Main Street making any money," he said. "Consumers are losing...

It is a cliché that if we do not study the past we are condemned to repeat it. Almost equally certain, however, is that if there are lessons to be learned from an historical episode, the political class will draw all the wrong ones — and often deliberately so. Far from viewing the past as a potential source of wisdom and insight, political regimes have a habit of employing history as an ideological weapon, to be distorted and manipulated in the service of present-day ambitions. That’s what Winston Churchill meant when he described the history of the Soviet Union as...

1929 And Today - Sobering Parallels Abound By Simon Maierhofer On 1:14 pm EDT, Thursday October 15, 2009 When was the last time you saw stocks decline 54% followed by a 55% rally? When was the last time you saw stocks (NYSEArca: VTI - News), bonds (NYSEArca: AGG) and commodities (NYSEArca: DBC - News) move in sync for nearly two years? When was the last time asset allocation did not really provide the diversification and protection it was supposed to? When was the last time, a ten year investment in the stock market delivered negative returns? Investors that care to...

Another Great Depression Low, Beware Getting Your Salary Slashed By Rocky Vega 10/14/09 Stockholm, Sweden – According to the New York Times, “now pay cuts, sometimes the result of downgrades in rank or shortened workweeks, are occurring more frequently than at any time since the Great Depression.” What does this mean for you? Well, for Bryan Lawlor it has meant taking a 50 percent pay cut, down to $34,000 per year. The government holds up our weak “recovery” statistics and when it comes to the tragic realities facing the average American it’s just the same refrain… deny, deny, and deny...

Is the current recession the worst since the Great Depression? Even though the president, many members of Congress and many journalists keep saying we are in the worst recession since the 1930s, it is an assertion that is premature, to say the least. At the end of World War II, from 1945 to 1946, there was a very sharp drop in U.S. output (12.1 percent) as the war economy began its transition to a civilian economy. The deepest and longest-lasting recession the United States has experienced since then began in 1980, when Jimmy Carter was president (the gross domestic product...

{snip} Currently, dollars account for about 62 percent of the currency reserve at central banks -- the lowest on record, said the International Monetary Fund. Bernanke could go down in economic history as the man who killed the greenback on the operating table. After printing up trillions of new dollars and new bonds to stimulate the US economy, the Federal Reserve chief is now boxed into a corner battling two separate monsters that could devour the economy -- ravenous inflation on one hand, and a perilous recession on the other. "He's in a crisis worse than the meltdown ever was,"...

n this fascinating speech, economist Thomas Woods explains why you've never heard of the Depression of 1920. Because it was over within a year, as the government let it run its course. The first year of the 1920 Depression was worse than that of 1929. Conditions were horrible. Yet due to President Woodrow Wilson's stroke near the end of his term, very little was done by the government to stop the economic decline. By the summer of 1921, recovery was on the way. It's too bad we're scared into thinking that economic downturns automatically require bold government action. History shows...

At the FT, economist Thomas Palley goes metaphor crazy arguing that we're heading for a double dip, and that the possibility of a Second Great Depression should not be written off. Deleveraging can be understood through a metaphor in which a car symbolises the economy. Borrowing is like stepping on the gas and accelerates economic activity. When borrowing stops, the foot comes off the pedal and the car slows down. However, the car’s trunk is now weighed down by accumulated debt so economic activity slows below its initial level. With deleveraging, households increase saving and re-pay debt. This is the...

Chronic Depression By Bill Bonner 10/09/09 London, England This week, the Australian central bank became the first to declare victory. It raised its key lending rate 0.25% and gave a whoop…signaling an end to the slump. The European Central Bank fidgeted and vaguely threatened to raise rates too. But the Americans stayed in their trenches. New York Fed governor Bill Dudley said that even though the economy is recovering, any rate hikes in the United States would be over his dead body. Then, word came that even Alan Greenspan thinks a recovery is underway. “This is what a recovery looks...

A massive energy bill that has already passed the House, and is currently before the Senate, would create new government programs that would not only encourage the reduction of greenhouse gas emissions by utilities and energy companies, but set limits over time as to the quantity of that reduction over the next several years. The US Chamber of Commerce (USCC), a private business federation that is not affiliated with the federal government, went on record last August as being skeptical of any legislative or regulatory effort that assumes greenhouse gasses truly endanger human health. Late last month, the Chamber voiced...

The evidence is mounting that the President is suffering from depression or worse. Here is a summary of the observable evidence: a. Anger is a classic symptom of depression. Remember the terribly angry speech on health care President Obama gave in September? b. Distancing oneself from reality is another symptom. Is not this clearly going on with the President and his apparent inability to address the serious issues in the war in Afghanistan? How is it otherwise conceivable that the Commander-in-Chief doesn’t even speak to his general in 70 days? Perhaps if things were going well in the war, we...

“I can make the payments. That’s not the issue. It’s a business decision,” Watts said. “I tried to work with the lender. The lender didn’t help. They said, go ahead, do a short sale. It’s strictly business.”

For the last few months I have been casting around looking for bullish data points as counterfactuals to my more bearish long-term outlook. I have found some, but not enough. If you recall, early this year, I stated that we are in depression, making the case for the ongoing downturn as a depression with a small ‘d.’ Nevertheless, I was quite optimistic about the ability of policymakers to engineer a fake recovery predicated on stimulus and asset price reflation and I certainly saw this as bullish for financial shares if not the broader stock market. But, I saw these events...

The Telegraph's lead economic writer, Ambrose Evans-Pritchard, has an interesting article arguing that we are in 1931-like conditions: * A big crash has already happened * Things are very gloomy * But we haven't been hit by the biggest crash, the "second leg down" which didn't end for a couple of years What's he talking about? Well, look at this chart: As you can see, the 1929 crash was actually very small compared to the "second leg down" crash which didn't end until 1932 or 1933. According to Elliot Wave and other chartists, a second - bigger - crash is...

I don't agree with Dr. Manning that this government will deliberately create a lasting depression so as to create a Socialist country. We are already there. I also want to say that Economies are . . . .

Japan is sliding into the deepest deflation since the Second World War, forcing the new-broom Democrats to abandon their strong yen policy within weeks of taking office. BY AMBROSE EVANS-PRITCHARD Core inflation fell a record 2.4pc in September, a steeper drop than at any time during the country's Lost Decade. A surging yen is twisting the knife further. The currency has risen 22pc against the euro, 27pc against the dollar, and 43pc against sterling since mid-2007. Hirohisa Fujii, finance minister, ditched his non-intervention policy yesterday, saying Tokyo would "take necessary steps" to prevent disorderly currency moves. Yen strength is asphyxiating...

US Recession Nearing An End As Speed Of Contraction SlowsThe contraction in the US economy slowed dramatically last quarter in the strongest sign yet that America is on the verge of pulling out of its worst recession in decades. By James Quinn Published: 2:55PM BST 30 Sep 2009 US gross domestic product (GDP) shrank at an annual pace 0.7pc in the three months to June compared with 6.4pc in the first quarter of the year, fresh figures from the US Commerce Department showed on Wednesday. It was the US Commerce Department’s final revision to its GDP figure for the second...

The Coffin Shaped Economic Recovery Sep 29, 2009 - 04:37 AM By: Darryl_R_Schoon While often wrong, Bernanke is right about the recession. It’s almost over. But a depression is about to replace it. There has been much discussion about this recovery, whether it will be a “U”, “V” or a “W” shaped recovery. The answer is none of the above. It is going to be “C -shaped” recovery, but not as in the letter “C” but as in coffin.[snip] The current contraction is more than sufficient to do so as it is more severe than any downturn since the 1930s;...

Spain is sliding into a full-blown economic depression with unemployment approaching levels not seen since the Second Republic of the 1930s and little chance of recovery until well into the next decade, according to a clutch of reports over recent days The Madrid research group RR de Acuña & Asociados said the collapse of Spain's building industry will cause the economy to contract for the next three years, with a peak to trough loss of over 11pc of GDP. The grim forecast is starkly at odds with claims by premier Jose Luis Zapatero, who still says Spain's recession will be...

US debt contracts for first time in decades GARETH COSTA, The West Australian September 26, 2009, 4:08 pm A number like $US122 billion ($140 billion) appears insignificant when related to the trillion dollar problems in the US economy, but when it represents the first contraction of gross US debt in decades the implication for global recovery is daunting. Total US debt, that includes bond debt issued for the bailout packages, fell in the second quarter of this year after continuing to expand right through the global financial crisis, according to data released by the US Federal Reserve Board. US federal,...

Americans have tamed their wanderlust during this recession, according to the latest data released by the U.S. Census Bureau. Only about 2.4% of Americans moved from state to state in 2008, down from 2.5% the previous year. "The mobility rate is lower than it has been in years," said Robert Lang, a demographer with Virginia Tech University. "There's a recession and a housing bust. People can't sell their homes in California and move to Las Vegas or sell their condo in Florida and move to North Carolina." "People are hunkering down, trying to hold on to what they have," added...