is the usa economy the worst it's ever been?

[karyn]

Greenspan: This Is The Worst Economy I've Ever Seen

from huffington post

Former Federal Reserve Chairman Alan Greenspan offered a woeful outlook of America's economic situation on Sunday, saying the crisis with the country's financial institutions was as dire as he had ever seen in his long career, and predicting that one or more of those institutions would likely collapse in the near future.

"Oh, by far," Greenspan said, when asked if the situation was the worst he had seen in his career. "There's no question that this is in the process of outstripping anything I've seen and it still is not resolved and still has a way to go and, indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes. That will induce a series of events around the globe which will stabilize the system."

Appearing on ABC's This Week, Greenspan would not definitively say whether the government should come to the rescue of Lehman Brothers, which has been forced to consider a possible sale after its stock shares plunged drastically this past week. Instead he called the situation surrounding the investment bank -- and the bailout that occurred this past spring of Bear Stearns -- as a "once in a half century, probably once in a century type of event."

The circumstances for Lehman may, as Greenspan noted, be different. Bloomberg News reported on Friday: "Rising speculation that Lehman Brothers Holdings Inc. may fail is generating less concern among investors than when Bear Stearns Cos. imploded in March."

Much of the issue, Greenspan added, was the trouble in the housing market, which he predicted would become stabilized by next year. Pressed by host George Stephanopoulos as to whether another major financial institution -- such as the struggling Washington Mutual, American International Group, or Merrill Lynch -- would fail in the interim, the former Fed chair responded in the affirmative.

"I suspect we will [see one fail]," he said, "but in and of itself that does not need to be a problem. It depends on how it's handled and how the liquidations take place. And, indeed, we shouldn't try to protect every single institution. the ordinary cost of financial change has winners and losers."

In light of these dynamics, Greenspan noted that the government was left with tough decisions: which institutions are "so fundamental to the functioning" of society that they demanded a federal safety net? Earlier in the week, the former fed chairman noted that such choses extended to tax policy as well. In an interview with Bloomberg Television, Greenspan argued that the country couldn't afford the tax cuts being proposed by John McCain without an equally massive reduction in spending.

"I'm not in favor of financing tax cuts with borrowed money," he said. "I always have tied tax cuts to spending."

[Ajax Knucklebones]

Say what you want about Greenspan, but I always thought he was on the ball. I wish he was still in his government position....

And no....The worst economy ever was the great depression.

[Bacchus88]

Ajax, the great dumb masses of our nation not have had the chance the learn about that in public school system. Really think about how much the population has no real clue about how a economy works.

[Bikerpunk]

Neither do Republicans.

"Hey, McCain? How are you gonna fix this CLUSTERFUCK of an economy with 605 THOUSAND jobs lost this past half year alone? Three investment banks collapsed, and things are going to hell fast....."

"Well, the fundamentals of our economy are strong...."

"WHAT'S YOUR PLAN"

"Euh, tax breaks for the top half of one percent, you know people like me who forget how many houses they own. Up the price of oil to make me and the Saudis rich, stay the course.

Oh, and invade Iran. Given that we won in Afghanistan and Iraq, we have the experience to make THIS war work. It'll be over by Christmas."

[Mindgames]

Dow's down 4%, Nasdaq down 5%, and that's after the good news over AIG. Yes, the US is screwed, as is everyplace else. Yes, it's going to get worse. Worse even than when I was a boy, and we were paid one cent a year for working 26 hours a day in the steel mill, before crawling home to eat coal and sleep on a pile of broken glass. LUXURY.

Russia's markets have suspended all trading today, and Japan's top three investment banks are all looking about for places to throw themselves off of, so I get the feeling the next big hit will be over there. Still, look on the bright side. The Foo Fighters have said they're taking a looooooong break.

[OrganizedKhaos]

With all the info above....

what can be done about it....realistically?

If instantly EVERYONE became proactive....would it make a difference?

While pondering the world's situation and crisis... IF... everyone DID become proactive.... Like all the mega million/billionaires .... if they shared the wealth... WOULD THE WORLD HAVE EVERYTHING IT NEEDS TO TAKE CARE OF ITS OWN?

[One Eyed Cat]

I see the systemic failings of of our financial institutions as the true culprits here. They were leveraged at insane margins. We need clear cut rules of the game. Banks need to be properly capitalized and people need direct access to what happens to their money when they make deposits and investments.

Members of my own family are shuffling bank accounts to keep all of them under the FDIC guarantee. Everyone with savings at that rate is doing it. This amounts to a run on banks. More will fail.

Asia will certainly take a hit. Russia will to some extent. That is offset by oil revenue and the fact that they can basically do as they please now with little to no opposition from the west.

OEC

[Mindgames]

Nope - we're only here because we keep 99% of the population neck-deep in their own excrement. If it was in any way possible to share the money and food equally across every human, you'd just find you had a planet of broke, starving people. 10 seconds later they'd all be trying to kill each other until they got back to how it is now.

I feel like Grandpa Simpson, but I was only half-joking in my last post - most of you are too young to remember the last time the place was really screwed (mainly by some fool putting an actor in the Oval Office). Lock yourself into your bunker, buy as little as you need and wait for it all to blow over. It'll be at least 2010 before the markets realign.

[One Eyed Cat]

Nope - we're only here because we keep 99% of the population neck-deep in their own excrement. If it was in any way possible to share the money and food equally across every human, you'd just find you had a planet of broke, starving people. 10 seconds later they'd all be trying to kill each other until they got back to how it is now.

I feel like Grandpa Simpson, but I was only half-joking in my last post - most of you are too young to remember the last time the place was really screwed (mainly by some fool putting an actor in the Oval Office). Lock yourself into your bunker, buy as little as you need and wait for it all to blow over. It'll be at least 2010 before the markets realign.

Yeah, I'm hoping for 2010. I read what needs to happen. Some institutions will have to be allowed to fail and their assets liquidated. All these nutcase derivative investments will be deleveraged. Most likely, new (but God helps us not more) regulations will have to be implemented. 2010 is optimistic but doable if we are willing to take a smaller hit now rather than a huge one later.

OEC

[Mindgames]

The 'willing to take a hit' thing is what bothers me - with all respect to the babies amongst us, some of whom have rather nice b00bs, they're the first generation to have never experienced a true depression. Go back one and we had the 50s and 70s.. back another and it was the war, then the 20s.. These days there's an overwhelming assumption that "bad stuff isn't allowed to happen to me", and that prevents people accepting a bit of enforced suffering for the long-term good.

Yes, there's a very real chance some of us will be on the streets in a year or two, but trying to save everyone simply means we all go down together. I'm not saying we have to kill every third born, but major companies, banks, etc. will have to fall if the economy's ever going to recover, and promises by politicians or fights by unions just won't help this time.

[One Eyed Cat]

The 'willing to take a hit' thing is what bothers me - with all respect to the babies amongst us, some of whom have rather nice b00bs, they're the first generation to have never experienced a true depression. Go back one and we had the 50s and 70s.. back another and it was the war, then the 20s.. These days there's an overwhelming assumption that "bad stuff isn't allowed to happen to me", and that prevents people accepting a bit of enforced suffering for the long-term good.

Yes, there's a very real chance some of us will be on the streets in a year or two, but trying to save everyone simply means we all go down together. I'm not saying we have to kill every third born, but major companies, banks, etc. will have to fall if the economy's ever going to recover, and promises by politicians or fights by unions just won't help this time.

Agree. How would an unwillingness to take hit play out though? It's going to happen. The fed is running out of options to even forestall it. The plans I'm seeing out of both political candidates will only make it worse. We can't restructure the health care system beyond making an attempt to control costs.

OEC

[Ajax Knucklebones]

I see the systemic failings of of our financial institutions as the true culprits here. They were leveraged at insane margins. We need clear cut rules of the game. Banks need to be properly capitalized and people need direct access to what happens to their money when they make deposits and investments.

Members of my own family are shuffling bank accounts to keep all of them under the FDIC guarantee. Everyone with savings at that rate is doing it. This amounts to a run on banks. More will fail.

Asia will certainly take a hit. Russia will to some extent. That is offset by oil revenue and the fact that they can basically do as they please now with little to no opposition from the west.

OEC

Just keep in mind (Although I don't know how true) it was stated in the newspaper today that 98% of the banks are working at an O.K. level and only 11 out of 1500 banks have been shut down this year. Out of this 11, only IndyMac was truly "taken over" by the FDIC because it was a medium sized bank. All the other banks where the FDIC moved in on, were sold to the highest bidder...The same day that FDIC moved in. I think the REAL big problem to be honest is the media hyping up the problem. Not to say the economy doesn't suck...It does, but the media makes it sound like all banks are going down the shitter, which that I know is not true. I live in Florida. So far Florida, California, and Arizona is the real hot spots because that's where housing prices had increased the most before this debacle and where so many people invested in housing, yet, still, only one bank in Florida has since shut down. That bank had 8 branches which, in the banking world, equates to a small fucking bank. Yet, the local newspaper makes it sound like all the banks in Florida are troubled. Also not true. I have no problem with people moving their money around to different institutions to be covered by the FDIC. Shit...They should have been doing that all along...Way before this mess. The problem I have is the media making it sound like it's better to keep your money under a mattress. THAT is what put's people in a panic and sorry, but banks are just not at that level yet. Not even close yet.

[Raza]

Lol, it's sortof sad to realise that what we've seen up until this point was capitalism working. I'm morbidly curious about how much damage it can do when it fails.

[One Eyed Cat]

Just keep in mind (Although I don't know how true) it was stated in the newspaper today that 98% of the banks are working at an O.K. level and only 11 out of 1500 banks have been shut down this year. Out of this 11, only IndyMac was truly "taken over" by the FDIC because it was a medium sized bank. All the other banks where the FDIC moved in on, were sold to the highest bidder...The same day that FDIC moved in. I think the REAL big problem to be honest is the media hyping up the problem. Not to say the economy doesn't suck...It does, but the media makes it sound like all banks are going down the shitter, which that I know is not true. I live in Florida. So far Florida, California, and Arizona is the real hot spots because that's where housing prices had increased the most before this debacle and where so many people invested in housing, yet, still, only one bank in Florida has since shut down. That bank had 8 branches which, in the banking world, equates to a small fucking bank. Yet, the local newspaper makes it sound like all the banks in Florida are troubled. Also not true. I have no problem with people moving their money around to different institutions to be covered by the FDIC. Shit...They should have been doing that all along...Way before this mess. The problem I have is the media making it sound like it's better to keep your money under a mattress. THAT is what put's people in a panic and sorry, but banks are just not at that level yet. Not even close yet.

I see no reason for panic. It's more the size and specifics of the financial institutions that are failing which concern me. My family lives in California. That is a precautionary measure a lot of people are taking out there. They aren't panicking though. It's just common sense to have the FDIC insurance when there is uncertainty. I don't doubt the media is creating a psychological element which just makes matters worse.

OEC

[a_small_death]

That was all that could be heard today on the new that even with the AIG takeover the market still took a nose dive. The war is now coming back into the for front in this clusterfuck as one of the leading factors for the current crisis. This is were I hope we see the market begin to bottom out rather than continue the perverbiel downward spiral into economic hell. At least with the the market bottoming out we can begin to rebuild before this gets into someplace I don't anyone will be willing to go. In an odd way this plays out about the sceamers. You introduce a little anarchy into the equation and soon everything becomes chaos. Thing is how much chaos before it all settles?

[Bikerpunk]

The problem is: noone knows how extensive the cancer is.

Here's some interesting tidbit: but not for Bush policies, we'd be running a surplus:

"Put another way, even though the economy has performed less well since 2001 than CBO expected, the federal budget would still be running a projected $465 billion surplus in 2009 if policymakers had enacted no tax cuts or program increases.

Does this mean increased domestic spending is mostly to blame? That's a common claim by those seeking to shrink domestic programs, but the numbers don't support it.

It's true that Congress has expanded several entitlement programs since 2001 -- most notably by adding prescription drug coverage to Medicare. Yet these cost increases amount to only 12 percent of the $1 trillion deterioration.

And funding increases for domestic "discretionary" programs -- the programs Congress funds each year through the appropriations process, such as education, medical and scientific research, and law enforcement -- account for just 6 percent of the deterioration. Over the past six years, funding for this part of the budget has hardly grown at all in real per-capita terms.

In reality, the two main reasons why the 2009 budget will be so much worse than CBO had predicted are tax cuts and increases in military and other security-related spending. "

[Morning Glory]

I wish the economy would just collapse. that's Ok, I can deal with that. I'll live in a mud hut in the woods and eat raccoon. Right now, instead, the economy is just shitty which means I'm poor and can't get a job, but I still have to pay for rent and groceries.

[Bikerpunk]

Actually, you don't wish that. Last time that happened people starved to death.

[Wickedanima]

Panic is a silly thing to do. There isn't much at this point but to hope YOUR bank dosen't go down, or take your job with it, and just hope things will get better after they fall apart.

Huzzah! Another new American Depression.

Also, did you guys see the Guardian yesterday? Apparently some of the financial institutions in the UK are sliding down as well.

[One Eyed Cat]

Panic is a silly thing to do. There isn't much at this point but to hope YOUR bank dosen't go down, or take your job with it, and just hope things will get better after they fall apart.

Huzzah! Another new American Depression.

Also, did you guys see the Guardian yesterday? Apparently some of the financial institutions in the UK are sliding down as well.

FDIC insures up to 100K in any one account. No worries here. My parents sold at 80% of market (that was definitely a relief) and bought at 50-60. Everything is set as long as the US government itself doesn't collapse. In which case, I don't think having cash matters. I feel sorry for people out of work or those who lose their retirement cash.

I know the UK is in deep. The banks are failing and New Labour fucked up their government something fierce. Scotland will be declaring independence in less than 9 years time.

OEC

[Raza]

Actually, you don't wish that. Last time that happened people starved to death.

People are starving to death right now, partially thanks to existing global economic structures; just not in your close vicinity.

[Bikerpunk]

FDIC insures up to 100K in any one account. No worries here. My parents sold at 80% of market (that was definitely a relief) and bought at 50-60. Everything is set as long as the US government itself doesn't collapse. In which case, I don't think having cash matters. I feel sorry for people out of work or those who lose their retirement cash.

The FDIC have already spent half their available money on the pre-existing bailouts. If a couple more banks fail there won't be money to protect your savings.

The US government won't collapse. The economy might, though. Especially if that fuck up McSame takes over.

[Bikerpunk]

We've most certainly established socialism for the rich, though.

We've effectively privatized profit, and socialized risk, but only for the same half of one percent too rich to know how many houses they own.

And the poor dears are paying too much tax on that money, which McSame seeks to address TOUTE SUITE.

[Bikerpunk]

By the way, just to give people an idea of why shitting bricks is the order of the day:

Here's the top 10 bankruptcies. Notice the latest is a half a trillion more than the second place.

Strange, these also happened during the tenure of Republicans.


10. United Airlines
Assets: $25.2 billion
Date Filed: Dec. 9, 2002

9. Pacific Gas and Electric
Assets: $29.8 billion
Date Filed: April 6, 2001

8. Global Crossing
Assets: $30.2 billion
Date Filed: Jan. 28, 2002

7. Refco
Assets: $33.3 billion
Date Filed: Oct. 17, 2005

6. Financial Corp. of America
Assets: $33.9 billion
Date Filed: Sept. 9, 1988

5. Texaco
Assets: $35.9 billion
Date Filed: April 12, 1987

4. Conseco
Assets: $61.4 billion
Date Filed: Dec. 18, 2002

3. Enron
Assets: $63.4 billion
Date Filed: Dec. 2, 2001

2. Worldcom
Assets: $103.9 billion
Date Filed: July 21, 2002

1. Lehman Brothers
Pre-Bankruptcy Assets: $639 billion
Date Filed: Sept. 15, 2008

[Pull~My~Hair]

i lost my retirement yesterday,
They also laid off 10 people last week..which is 1/8 of our staff..

a regular of mine is supposed to retire in 6 months and he just lost 55% of his retirement, over $100,000.

Bryans little company he works for is going bankrupt, they told him 3 days ago they couldn't afford him anymore.

My parents just got approved for a home loan, and while they were in the house they wanted to buy viewing it, the lender called and said they couldn't offer any loans right now, and they had to revoke it.

So I don't know about everyone else, but we're feeling it right now

[Bikerpunk]

You'll be happy to know the people that did this are getting a big bailout.

Whereas you get hosed.

[Morning Glory]

People are starving to death right now, partially thanks to existing global economic structures; just not in your close vicinity.

exactly. where do you think that all this affluence came from in the first place? (not you, I know you know. that was the rhetorical you.)

and they did this shit to themselves, who else is to blame for it? The American people deserve what they have coming to them by allowing themselves to be duped by these sharky businessmen and politicians. Oh, Bush wants to spend 7 trillion dollars that we don't have to secure oil and weapons contracts for his buddies? Good idea, let's vote him in again! fuck em.

I mean, don't get me wrong, I feel sorry for the people that didn't ask for this shit and don't deserve it, they always get screwed over.

and besides when the shit hits the fan what are these ivory tower folks gonna do? they must not have a very good memory of history when societies fail. their asses are going to be the first ones on the chopping block.

[One Eyed Cat]

The FDIC have already spent half their available money on the pre-existing bailouts. If a couple more banks fail there won't be money to protect your savings.

The US government won't collapse. The economy might, though. Especially if that fuck up McSame takes over.

Government is tax money coming and paid out. They will reappropriate if something this dire happened. They'll cough it up (not that we won't make a run on any bank even rumored to be in trouble anyways)

OEC

[Bikerpunk]

I withdrew my cash

[One Eyed Cat]

I withdrew my cash

I can respect that. You have to understand though: If the scenarios you mention were to play out, the fed starts printing dollars. Your dollars would be worth nothing. It won't happen, but would not even be at the discretion of the fed. It's bad, yes. We aren't to the point of Russia in the 90s though. We need to relax and take the hit. It is going to suck but there is nothing left to do until after we hit bottom now.

OEC

[Raza]

I withdrew my cash

I can respect that. You have to understand though: If the scenarios you mention were to play out, the fed starts printing dollars. Your dollars would be worth nothing.

Right, so invest in stuff that won't lose its value in a time of lage-scale economic despair. Like drugs, or potatoes.

[One Eyed Cat]

Right, so invest in stuff that won't lose its value in a time of lage-scale economic despair. Like drugs, or potatoes.

Gold is generally the default.

[Raza]

Yeah, but in being the obvious golden standard, I imagine a lot of people will be looking for it right now, and any sellers left available will be using that in their favor.

'Sides, drugs are more fun, potatoes more edible. Gold's value is still symbolic rather than practical, and therefore relative to the state of society, if more stable than other valuta.

[One Eyed Cat]

Yeah, but in being the obvious golden standard, I imagine a lot of people will be looking for it right now, and any sellers left available will be using that in their favor.

'Sides, drugs are more fun, potatoes more edible. Gold's value is still symbolic rather than practical, and therefore relative to the state of society, if more stable than other valuta.

It's crazy how much our an entire economic structure is psychological.

OEC

[Raza]

Our entire social structure, even. There's no dictator in history that would not have been rendered powerless if everyone had merely forgotten who he was.

That's why anarchy is a state of mind more than one of political affairs. It's always there, always has been - all that's needed is to cease acknowledging the roles and divisions that are currently believed to prescribe the functioning of society.

[Ajax Knucklebones]

It's crazy how much our an entire economic structure is psychological.

OEC

Damn straight! All smoke and mirrors...Especially the stock market.

[Mr Karl]

It's crazy how much our an entire economic structure is psychological.

OEC

all part of the plan..........................heh heh

[Morning Glory]

all part of the plan..........................heh heh

they did it! the planet of the apes is earth! you bastards!

[Wickedanima]

FDIC insures up to 100K in any one account. No worries here. My parents sold at 80% of market (that was definitely a relief) and bought at 50-60. Everything is set as long as the US government itself doesn't collapse. In which case, I don't think having cash matters. I feel sorry for people out of work or those who lose their retirement cash.

I know the UK is in deep. The banks are failing and New Labour fucked up their government something fierce. Scotland will be declaring independence in less than 9 years time.

OEC

Lets hope 9 years will be enough. ^_^

[Wickedanima]

'Sides, drugs are more fun, potatoes more edible.

I'm not sure, but I think I love you a little.