Possible worldwide depression

[Charles RB]

The news hasn't brought it up much, but idiot home loan practices, rammed into high gear during the boom housing bubble that popped over the last year, seem to be on the verge of triggering a new worldwide depression

Really? Been seeing it quite a bit in newspapers (and BBC News website, where it was on the frontpage) here. Dunno why we'd be reporting on it more than you.

[badMike]

Dunno why we'd be reporting on it more than you.Because our news stories fall into either one of two categories: The Super-Happy Fun News or The Tragically Depressing and Horrific News. If something falls into The This Might Be a Crisis Sometime in the Future So Now Might Be a Good Idea to Take a Hard Look at This Issue News, we're not going to hear much about it -- until it progresses up to the Tragically Depressing and Horrific.

[Sabrina_Fried]

It's been all over the Canadian news, only they are spinning it as a "temporary market adjustment" and leading viewers to believe that everything's going to be okay...in fact, in a few months the economy will be even HOTTER than it was before this "temporary market adjustment" started.

Interpreted by me as: Stock up on canned food, pad the "emergencey survival savings account" a bit more, and learn some practical skills that will translate well when the cube farm job goes south...like sewing or cutting hair.

Ain't I the optimist? ;)

I read TOD (http://www.theoildrum.com/)on a regular basis..and they have a tendencey to cast a wide net when they pull in their economic articles, which is probably why I'm not so optimistic about the state of the economy as the people who get paid to be optimistic about the state of the economy. Canada is about due for another recession anyway.

That's what we get for letting the banks loan scads of money to people they knew well in advance were never going to pay them back.

Sabrina

[Steven Grant]

Really? Been seeing it quite a bit in newspapers (and BBC News website, where it was on the frontpage) here. Dunno why we'd be reporting on it more than you.

I think because they don't want American homeowners or stockholders going into complete panic, at least not until the wealthy have managed to sell off their holdings. The selloffs have been going on steadily all week, but nobody wants a market run, and they're terrified they'll get one. A market run in France was what amped the critical situation into public view in the first place, but you can't say it caused the situation because this tinderbox has quietly been smoldering for a long time. France was just the first small flare-up...

- Grant

[Sabrina_Fried]

The most annoying thing is that while I am watching all this coverage of the market melting down (the TSE is apparently in the red for the YEAR as of today), what commercials should come on?

- Commercials for those wierd loans where you use the equity in your home.
- Commercials for "No credit, no problem!" mortgages
- Commercials for pre-paid credit cards endorsed by things like MuchMusic, clearly hoping to get the kids into debt while they are young and impressionable and have most of their working lives ahead of them
- Commercials for credit cards for adults, hoping to do the same.

And then, in the shortest available commercial spot, right before they switch back to the news, clearly shot on a shoestring budget with a buddy's camcorder:

- Commercials for debt management companies.

And people wonder why I have given up on TV.

Sabrina

[FunkyGreenJerusalem]

Yesterday on The Daily Telegraph (Murdoch's mouth piece) they had a picture of an American family (Black) and headline saying 'The American Family Putting Interest Rates Up', and went on to explain what Steven did in the column.

And I thought 1) The American press must be weird if Steven is revealing this info to Americans and 2) so Australia blames everything on Black Americans now too - it's taken us a while, but I'm glad we've finally joined the club.
(Why the headline didn't out right blame the loan companies, I don't know - the article did - but I guess fear of 'black' sells papers even in a country where there aren't that many black people*.)


*Laurence Fishburne, whilst down filming the Matrix, said Sydney siders were racist and kept staring at him in restaurants.
We all think he just didn't realise that it was probably a) he's a hollywood star and we don't see that many or b) he's a big huge African American and we don't see that many.

[Charles RB]

Front page of today's Independent, with the main graphic mentioning "value of UK plc falls £60 billion".

Is the American media still ignoring this? At some point they'll have to pick it up...

[cactusmaac]

ignore.........

[badMike]

At some point they'll have to pick it up...Oh yeah, says who?

[Charles RB]

Even I'm not cynical enough to believe the entirety of the United States mass media could ignore a global recession.

[mattx110]

Even I'm not cynical enough to believe the entirety of the United States mass media could ignore a global recession.

a little busy trying to figure out how to make the numbers look like our economy is on the upswing...

[Steven Grant]

They're not really ignoring it, it's more along the lines of "Well, problems have arisen, but steps are being taken, and in sports..."

Let Americans panic about idiot con games gone awry on a mass scale, and the terrorists win...

- Grant

[Dennis]

peak oil - check out:

http://jameshowardkunstler.typepad.com/clusterfuck_nation/
http://peakoil.com/
http://www.lifeaftertheoilcrash.net/

[mattx110]

saw some scary stuff on the local news today. they know.

didn't go into worldwide, but the stock market is doing crap, and basically "it's going to get worse before it gets better".

[badMike]

Even I'm not cynical enough to believe the entirety of the United States mass media could ignore a global recession.I am. The degenerate depths that the American media have fallen to the last couple of years have been quite extraordinary. Just look at the reaction since your post. We all know what the storyline is and will be: "Things may look bad right now (and you can't really blame any of it on any particular person or policy), but it will all correct itself soon enough so not to worry -- this is just how economies function."

And if there's a global recession, the news will be "Look at those poor bastards all over the planet having a problem. Here's our special 'Pick American of the Week,' Joe Bloe who's sending his loose change jar to an orphanage on the other side of the planet to do his part in helping out. We're seeing some effects of the recession here, now here's a funny joke by David Letterman about it."

[Charles RB]

I am. The degenerate depths that the American media have fallen to the last couple of years have been quite extraordinary.

Yay for the BBC World Service then, I guess.

[Steven Grant]

This morning we were greeting by newspaper headlines about how the market has "calmed" now that the Fed has taken "decisive action"... by lowering the prime a half point. Which is kind of like putting a bandaid on an oil spill, but hey... no one's going to care until it washes onshore...

Which, even if they sneak past at this particular juncture, will be in around five months, when all the adjustable rate mortgages get their rates adjusted... way up... and an estimated 40% of ARM holders - which I'm told is a conservative estimate - will be forced to default...

Wasn't the future wonderful?

- Grant

[Dennis]

I'll post this link again- zeitgeist movie
http://video.google.com/videoplay?docid=497251819335380093&total=32&start=0&num=100&so=0&type=search&plindex=1
the final part is about the fed

[mattx110]

This morning we were greeting by newspaper headlines about how the market has "calmed" now that the Fed has taken "decisive action"... by lowering the prime a half point. Which is kind of like putting a bandaid on an oil spill, but hey... no one's going to care until it washes onshore...

Which, even if they sneak past at this particular juncture, will be in around five months, when all the adjustable rate mortgages get their rates adjusted... way up... and an estimated 40% of ARM holders - which I'm told is a conservative estimate - will be forced to default...

Wasn't the future wonderful?

- Grant

in the newscast that i saw they said "this is basically a symbolic move with a temporary stabilizing effect". didn't sound like they were hiding how bad things can get.

[Sabrina_Fried]

This morning we were greeting by newspaper headlines about how the market has "calmed" now that the Fed has taken "decisive action"... by lowering the prime a half point. Which is kind of like putting a bandaid on an oil spill, but hey... no one's going to care until it washes onshore...

Which, even if they sneak past at this particular juncture, will be in around five months, when all the adjustable rate mortgages get their rates adjusted... way up... and an estimated 40% of ARM holders - which I'm told is a conservative estimate - will be forced to default...

Wasn't the future wonderful?

- Grant

This is going to sound uber-pessimistic, but I am actually worried that all these bailouts are actually going to make the problem WORSE when everything finally hits the fan, because if the banks know the Central banks are going to bail them out, they have little incentive to clean house and start being more....well, fiscally responsible. Never mind the fact that what the banks are being given are essentially loans that they are expected to pay back eventually, which means that they are going farther and farther into a debt they may not be able to pay back because the money may not actually exist except in someone's imagination.

At the same time, they can't do nothing, because to simply let the markets crash would kill the consumer economy (more than high debt and fuel prices are already killing it...and much faster too).

And CharlesRB, I can't say much about the American TV networks, because I try to avoid them like the plague, but I can guarantee you that in about a month's time, the Canadian networks will be doing anything and everything they can to stop talking about this. Mainly because if they don't, the investment firms that are buying up all their adspace may start having second thoughs. Assuming those firms will still have enough money to be buying adspace by then of course.

Sabrina

[Steven Grant]

The main purpose of the bailouts is to convince investors that something's being done and weaken any desire they might have to protect themselves by cashing out of the market, because there's nowhere near as much actual wealth in the market as it reads on paper, the same way banks don't actually have as much cash on hand as it reads their depositors have in the bank. As long as not too many people withdraw money from a bank at any given time, everything's okay and banks can handle it. If everyone tries to withdraw all their money at the same time, banks simply don't have the resources to cover it, crash, and people, usually the ones who aren't in the front of the line, find out that all that money they thought they had really doesn't exist after all.

The stock market kind of likes slides. This gives wealthier investors more capable of surviving them the chance to get good stocks under value, and then watch their portfolio increase as the prices swing upwards again. Crashes tend to take everything with them. But the main function of the stock market, particularly as it has been run for the past couple decades (worse now because this administration has pretty much done away with any sort of regulation except the most cosmetic) is the transfer of wealth from a lot of poorer investors to a very few wealthy ones. Bailouts can also be seen that way, as it's the transfer of public (taxpayer) funds to private moneyed entities whose own fortunes would otherwise be at risk.

- Grant