Breaking News: Deep Depression Started a Year Ago

It really did. Bush drove the economy into a ditch and almost over a cliff.

But Obama grabbed hold of the wheel and averted disaster first by keeping the banking system from total collapse.

People would have made a mad dash for their money if Obama, et al, hadn't floated the banking system.

Tell me you weren't thinking about it, kids. Tell me that you didn't think all hell was gonna break loose.
Go ahead, tell me you weren't thinking about grabbing all your money and heading for the hills.

Well, it didn't, you didn't and so here we are. Buck up buckos. And thank your lucky stars Obama arrived in the nick of time.

on over the cliff when he was told the financial system was in melt down.

He actually DID call for gov't intervention against the conservative Ayn Rand mantra of free markets.

Of course, the biggest asses he saved were his buddies on Wall Street.

One of the few moments in 8 years when I have to give him credit for doing the right thing.

I think it was planned for a long time. In effect, it froze Obama with no money to work with. The banks took it all and had no plans to put any of it back into the economy. Starve the socialist beast! Obama is just a pawn in their game, in my opinion.

country who only care about their own immediate profit, not even worrying about killing the goose that is laying their golden eggs much less how they are screwing other people or the country or the world in general. They don't even think about the consequences, like a bunch of two year olds.

He said that part of the reason Bush was financing the Iraq War with deficit spending was so that the country would be broke by the time the Democrats got back into power and they would have no money to spend on health care and education.

You give the drunken slob way too much credit. Please, this is DU. Fuck George.

If you credit Obama with stopping the financial aspect of the meltdown and the credit "freeze", you have to credit Paulson even more. Geithner inherited, continued and reinforced Paulson's program. The programmatic differences are cosmetic. That Paulson might have stolen and laughed all the way to the bank is irrelevant.

You have to be consistent in order to have even a trace of logic to your argument. Either both Geitner and Paulson "saved the day", or what they did was ineffectual and no meltdown was going to occur. The stealing and bailing were just "side effects".

The timing of the two bailouts actually favors Paulson. The worst of the "freeze" was already moderating by the time Geithner came into office. It isn't about supporting the one or the other. In this case, crediting Obama also credits Bush... OR, neither deserves "credit".

I don't know what your problem is.
But my problem is any time I see any credit given to Bush, it sucks.

Bush was the biggest criminal ever, and I don't own anything he did.
He put us where we are today.

I do support Obama. Watching close, but giving support.
If that's a problem for you, then you do have a problem.

Logic matters. Consistency matters. Who you support doesn't matter. You can give Obama the dawn and Bush the dusk if you want to but you have done nothing but satisfied some personal need. Your needs are your own. They aren't politics and they aren't economics. Ignorance is not your friend.

Jose Gaspar was a pirate.

Who I support doesn't matter?
So if I support Bush, it's ok?
And don't support Obama, is ok?

History is to be denied and cast aside?

The sooner the Bush name is put in its proper place the better we all are.

Nothing new there

if the banking system hadn't been supported.

The same world you live in now, with bankrupt Wall Street firms.

or that the US Treasury or FED could buy commercial paper for a short period of time.

problems.

If a little (actually, rather large) privately held financial firm that you may have never heard of, that has a major hand in the movement of freight in this country had frozen solid, your grocery store and every other retailer would have been empty inside of two weeks.

http://www.comdata.com/comdata/index.jsp

If Comdata and their competitors had either frozen or failed, truck freight would grind to a halt.

Lehman failed, the world went on the next day, Bear failed the world went on. I swear the people who bought into the Financial Suicide bombers always make me chuckle a little bit.

Two planes crashed into the biggest building in New York and one into the Pentagon and the world didn't end. A hurricane drowned a major American city and the world functioned fine. Forgive me when I doubt that failure to save a few giant corporations from their excess would have resulted in doomsday.

Besides you say Comdata was in trouble, what evidence do you have of that and if they were so vital to the economy what was preventing the government from doing a targeted bailout to firms that were absolutely necessary to the health of the economy?

Sorry, this last minute rush into congress by the Sec. of Treasury Paulson with the threat of Marshall Law makes me think, the threat wasn't as big as it was made out to be.

We woulda had a crash, the debt would have been wiped out,
the cooked books would have been recognized.
Hard and painful, but not nearly as long and slow as what is happening now.

added:
But then we would not have had this:

they want instant jobs now.

If Obama's economic team had acted properly. Instead of telling us "nobody foresaw this", they could be accurate and say "several Nobel-Prize winning economists - who we've marginalized and ridiculed - said this is exactly what would happen, and told us how to prevent it."

He didn't seem to have a problem shoveling our tax money out the door like gangbusters to bail out the banks -- but he's planned a *summit* for NEXT MONTH to *discuss* the job situation?

Give me a f*cking BREAK. People who voted his behind into the office are HURTING, while his corporate cronies are just starting THEIR Christmas shopping with bonuses paid out from the taxpayers.

And many of those unemployed will be going HUNGRY on Thanksgiving and Christmas just to keep a roof over their heads.

*instant jobs* -- yeah waiting a YEAR for him to actually acknowledge the problems of the dumb bastards who gave HIM his job..... :grr:

banks went under and caused an even worse recession? Why didn't we just let GM and Chrysler go under and loose another couple million jobs? A big part of the stimulus plan was helping the unemployed with an immediate $25 in weekly benefits, extending unemployment and expanding the HCTC to include people laid off. Think about it how many more people would have been hurting if not for that part of the Stimulus. I was laid off In April and just got my extension to next March from the first unemployment extension. In March next year I will be eligible for another extension from the one passed a few days ago. My next door neighbor was called to come in for a physical to return to work next week. The plant he worked in has been idled since May and will restart next week. That plant isn't restarting because of some government make work project, it is starting up because people are ordering their products. Those Stimulus projects are not jobs they are temporary work, it is not the governments job to make jobs. Now in the old USSR the government made jobs, they had ten people on every job just to keep people busy, but the USSR collapsed remember. Where I live people are actually complaining about all the traffic problems from the Stimulus projects.

Wow -- you sound just like the pukes.

Hey, as long as YOU don't have to see the folks who are slowly selling their belongings to keep a roof over their heads, why should anyone worry, right?

As long as those bankers get to do their shopping for their families who will vacation in the Hamptons, we needn't care about the poor bastards who voted in a presidential candidate who flat out LIED when he promised CHANGE.

Limousine liberals have much in common with the pukes -- they too like to toss change out the windows at the *common folk*, and plug into their ipods so they don't have to deal with REALITY of the middle class.

Those jackboots come in blue too. And yours fit rather snug, dontcha think? :sarcasm:

plant for 38 years nobody ever handed me anything. No I have enough intelligence to know we are in a recession and I have seen much worse. IMO the biggest obstacle to economic recovery is the staggering debt and you want to spend even more with feel good make-work projects. Change! How is he supposed to make all this change, the USA is not a dictatorship. We control the Congress and can't even get our own party to vote for change. Who would have done better? Lets have his or her name or shut up.

Who would have done better?
When you look around and see who's to blame, we see, it is us.
We let the republican dogs out. We, the people.

Finally, we are making progress.
The dogs are being rounded up.

based on the core economic indicators and projection of where they were going.

So yes you are correct

And right now we have a core indicator showing positive growth, GNP... no does not mean we are out of shit creek, but we are slowly moving out of it.

He should have nationalized the banks and sent the bankers packing.

Instead, he showered the bankers with huge cash gifts (from the taxpayers) and backed $13 trillion in junk assets. He made terrible deals for equity, set zero rules on what the bailed-out bankers could do, and let the bankers sodomize the rest of us at will.

He saved the bankers - the economy is far from saved.

in what you say.

:(

Meanwhile back in the real world...

Foreclosures are the highest since the Great Depression.

The Banking System is reporting record profits, not lending, and still having big financial troubles if you look at their balance sheets (changing the accounting rules for asset valuation helped that paradox)

Interest rates are rising for ordinary Americans and Small Businesses

Oh, and a majority of people that perpetrated the fraud not only are not in jail...they are still running the firms or involved in the industry they crashed.

There is also that developing commercial Real Estate crisis that stands to wipe out the regional banks.

Oh and the President's pick for Treasury Secretary just got a terrible review by the Federal Government's watchdog for giving a hand out to the industry during the AIG bailout.

THANK GAWD IT PASSED!!!!

...I guess I'm not a chicken little.

Doesn't mean Ted Bundy is really gonna give us a ride home.

I won't be thanking any of them any time soon.

...if you live by the banks, you die by the banks.
This country lives by the banks, and we had to put the banks on life support.

The key now is to put them in a nursing home.
Put them back on the Glass-Steagall health care program.

everyone is sniping at Obama and blaming him for the recession he inherited. I can go to the Freeper site to read the same crap. What a bunch of whiners, it's a f---g recession people loose jobs that's why we have unemployment insurance. I have been laid off since April and don't expect to get called back for at least 6 months, when I do get called back it will be because people are buying our product not because Washington is handing us more money. You aren't going to make one real job by spending us into bankruptcy with a few make-work projects. The financial bailouts saved us from total meltdown, now the economy has work itself out of this mess. One of the biggest roadblocks for the economy is the spending, dumping a few trillion more in make-work projects will bury us.

...unemployment won't go above 9% if you pass my trillion dollar stimulus - you begin to take some ownership in the minds of the public. Finacial Bailouts (TARP) were started under Bush and modified under Obama (TARP II). As you said it will take time to work itself out, but don't expect patience from the public that has been conditioned to expect instant results.

it was a projection, when you project the future you are sometimes wrong. I am sure you can find someone that predicted 10% or even 50%, even a broken clock is correct twice a day. There are economists types that have made a career of predicting gloom and doom. I remember one Ravi Batra that predicted total economic collapse would happen way back in 1989. He was never seen or heard from for twenty years now he comes out of the woodwork claiming he predicted it.

The Bankers have owned this country for a long time - had Obama let them go down - they would have taken all the pension plans with them. At this soon in the game - he didn't have much of a choice but to go along with the bailout that had started under Bush (which I believe was planned all along). He wasn't able to give Social Security to Wall Street - so he just gave them the money he had promised.

It's odd that in the space of a few months, our team of Dems is being blamed for all the ills of our society.

While it is cool that we are free to say Obama should have steered more to the left
the back seat drivers who are pissing and moaning are actually detrimental to our well being.

"blamed on the Dems" - Freakin Rush Limpalls was calling it Obama's recession before he was even sworn into office.

How many Rush acolytes do we have here?

Or are they just being duped?

I can forgive those being duped.
The M$M has mastered duping people.

But the one's dittoing Rush need their heads examined.

The lines are very blurred thanks to 30 years of corporate rule, but much of the money spent and nearly all the money guaranteed (~$13T) simply went to finance the winner's (picked by the usual suspects) takeover of their competition.

We handed more billions to billionaires and paid to consolidate Wall Street, thus eliminating the last vestiges of "competition".

This was simply the greatest heist in the history of the world.

You saying that there was and is a deep conspiracy?

but when Timmeh Geithner and Hank Paulson stick the greediest mother fuckers in the world in a room to come up with a solution, generally speaking, their solution will somehow directly benefit them.

So it all just happened by accident?

Are you for real? Probably not.

or the ability of men in power to use their power to cover their mistakes. Everyone knew the housing sector was a bubble, but the problem is if you pull out too soon before the bubble bursting you are leaving some serious profits on the table. What eventually happened was one firm went down in March of 2008, and everyone realized the bubble was about to pop, so over the next 6 months you had firms looking for ways to dump their bubble assets on some other sucker. As that process was unwinding two more big firms went Kaput (AIG and Lehman). Without the government stepping in, in October more firms were about to blow up. You also had people outside these firms realizing they could push the firms into failure using naked shorts, so if the firm was in moderate trouble, a few hedge funds could push it into a shit load of trouble by shorting it's stock into oblivion. Ironically enough settling their trades with other firms that were having the same thing done to them.

Basically when the Government finally decided to step in, they brought the players in the room and Paulson decided to shoot a Bazooka at the system with a capital infusion. The problem is, that since the players were in the room, no agreement was made as to what that capital infusion would be used for. Meanwhile at the NY Fed, Geithner was doing his own capital infusion in the form of the AIG derivative contracts. Normally when a firm goes bankrupt such contracts would be negotiated down....Geithner saw it as an opportunity for a second capital shot that wouldn't face Congressional approval. What he did was un-ethical in the least, possibly illegal.

Read Too Big to Fail if you want a good look at what happened.

There was no conspiracy, just greedy men who had access to the right people.

But to think that the greedy men didn't conspire to take advantage....

Ever hear of Madoff?
Creating bubbles?
You really think they didn't know the final outcome of all their actions?
And they didn't plan it out?

If it was all just an accident, what is your problem?

When you have lax regulation, one firm will realize they can do something and after other firms see their quarter profits for doing it, they will follow suit. All of these firms have substantial Competitor Intelligence units. That and the incestuous nature of Wall Street. Say Bank of America comes up with a scam that is on the borders of legality but they haven't been prosecuted for it and start to profit off it. Wachovia will quickly see what they are up to and start running a similar scam, sometimes by hiring a person who worked on the Bank of America scam at the lower level and bringing them on to run their scam.
Citigroup will follow suit and than JPMorgan will have to get involved. The Lehman Brothers, Goldman Sachs, and Bear Stearns of the world will see what is going on and try to find a way to service the scam and take some of the profits over it. Moodys and the rating firms will want to collect fees on rating the scam so they will get involved.

It is the flip side of capitalism. We like to think that firms only pick up on the ethical business practices that benefit the consumer or society. Capitalism has no morals. If something will make money and there is nothing to prevent the activity, someone will engage in it. The driving force is always the bottom line. Ethics never come into question.

Bernie Madoff never let anyone outside a close circle of people know what he was truly up to and what he did was blatantly illegal. What the banks did was on the fringe of legality and no regulator put a stop to it, so as long as the music is playing...you dance.

And why is that?

There was a conspiracy to stop regulations so that profits could be made.
Why are you refusing to recognize the truth and dance this dance?

And what solutions have you?

My solution would be many jail cells.
First Bush, then the bankers and Wall Streeters.
Leave Obama to be free. For now.

Your solutions are....?

My solution would be re-instating the new Deal regulations, and prosecuting regulators for negligence when shit like this happens...amazing how much more competent they would be if they faced penalties for gross negligence.

You would hamstring Obama, let the bankers go free, and bust Bushco regulators?

That's a start. Except for blaming Obama like you do, it's a start.
But think closely about letting the bankers go free.

and please the President has no desire to arrest bankers right now.

...if Obama were to jail the bankers?

You do realize that you seem to be making excuses for the bankers behaviors, don't you?

So, where would we be if the bankers were all sitting on the dock?
Would there be any backlash?

You do realize that banking paid for the President's education (his Grandmother was a banking executive). The man doesn't have a personal hatred of this industry that I suspect he may have of insurance companies.

The President is purely a political animal. He's a nice guy personally and morally, but the guy could out triangulate Bill Clinton. He's the best there ever was in trying to find the perfect policy that keeps him popular, doesn't make his base revolt, and keep the ability to fund raise by saying to the business interest you are lucky I'm here someone else might have taken your heads. In the current political system he is the purest of political animals and one of the most intelligent people ever to play the game.

What would happen if the President jailed all the banking executives, there would be a fresh group of sociopaths that were one level below them looking to take their place and not repeat the mistake of their former bosses. The President isn't stupid, he knows that.

The nature of the banking problem is a regulation and enforcement issue. My issue with the President, is the guys he chose to sit in the room with him to advise him on the policy are the regulatory builders of what just happened.

The president got where he is because he knows how to play the game?
And knows who the players are?

So, you say don't jail the bankers because they'd just spawn anew?

You wail away without any solutions, except... well, what are your solutions?

and Tim Geithner, Larry Summers, Ben Bernake and Mary Shapiro are not people you want crafting legislation or implementing them.

The President has the wrong people in the room ideologically...the solution is not going to be one that solves the problem.

You won't even admit to a conspiracy.
So your wisdom is equally questionable.

The reality to this point has been that the conspiracy has us bent over the table.
Short of jailing the bastards for the conspiracy, Obama has decided to let them try to right the wrongs.
So far depression is on hold.

Congress can pass meaningful reform and Obama can sign it.
Meanwhile Obama is left with playing the game with the players.

When you surround yourself with the players in the government that were part 1 of what in your view is a conspiracy, what do you think the chances are that the legislation you will sign will address the conspiracy.

To end the conspiracy.

That is the first step.
Next step is to keep it from happening again.

All we can hope is that some level of ethics and patriotism arises amongst the players.
Obama has the capability of arousing those feelings, and I support him.

Of course a major revamping of the system must occur.
Congress has that power to do that.
Will they, or won't they?

So there is a big conspiracy by the bankers to rob the American people and they have been working on it for years. The President has hired some people who were part of the conspiracy in the 90s, one who was involved as recently as 2008, but the President has turned these men to do good deeds and is about to achieve a stunning victory.

Here is what I believe, the bankers lobby for regulations that are good for them and bad for consumers and taxpayers or society in general. Every industry does it. Automotive, Energy, Airline, Agriculture, Technology, Health Care, etc... The bankers by the nature of their business have access to huge sums of capital which allows them to have some of the most robust lobbying and campaign funding efforts that coupled by the fact they don't have a physical product or service that they deliver, the nature of their product is all wrapped up in contract law. So lobbying the law makers is very important to their bottom line. In addition they lobby for regulators that are friendly to their interest. They tend to get their way, and judging by the appointments by this administration they got their way again.

Now I guess I could buy into your theory, that there are a bunch of bankers sitting in a room somewhere thinking of and organized way to thwart the President, or I can stick with my theory that the same activity that has been going on for 30 years under both Democratic and Republican administrations and congresses is going on in this new administration.

We are doomed.
So you say.

Yet, you don't rail against the bankers who've screwed us over?
Just rail at Obama?

And you question my logic?

Meanwhile your logic is we are doomed?

What is your agenda?
What is your desired outcome?

As far as the administration goes, are we "doomed" really defines how you define the word "doomed" even the greatest fraud eventually unravels.

I'll give you an analogy I like to use. In the Garden of Eden, God places something man shouldn't eat in the middle of the Garden. A snake tells Eve to eat the apple, Eve eats the apple, Eve gives the apple to Adam to eat, he eats it, God gets angry and kicks them out.

Now here is how my mind works...who is to blame for this situation and what should be done in the future.

At the end of the day, God probably shouldn't have been leaving around forbidden fruit in his garden if he didn't want man to eat it. If God doesn't want to repeat this story the best idea is not to leave forbidden fruit lying around. I guess you can punish the snake for being a snake, but he was just following his nature of being a snake, you can blame Adam and Eve, but than again, they were just buying into lies told to them by the snake.

Solution to the problem, God shouldn't leave fruit lying around people aren't supposed to eat when he knows there are snakes roaming the garden.

Am I comparing Obama to God, no, I'm comparing the government to God because it is the one who sets the rules. You allow bad things to sit in the Garden, some snake is going to sell it to someone sooner or later.

Stooping to bible talk, now?

Its all God's fault?

No conspiracy. Its just business.
The government is to blame for the fraud?

Not logical. Not at all.

The fraud is based on contract law and the only way to enforce contract law is in the civil courts. 30 years ago the contract law was written that these types of contracts were illegal. When that law was lifted the contracts became legal and business people do, what business people will do. Would I engage in their behavior, no, but their behavior is something that has been going on since the first farmer traded a pig.

What do you think derivatives, mortgages, 401(k)s, or any other financial product is? It is a contract based on something that is legal.

You honestly think this would have happened if the contracts were unenforceable?

What TARP and other actions have done is bypassed another section of the law and that is bankruptcy law.

You are blind if you don't see the governments role in causing the circumstances for this to exist, and than for creating the circumstances where the legal remedy for this behavior was avoided.

to steal the banking industry's license to create money, yes.

It's not secret or even disputed, the financial publications have documented both the plans and their implementation over the last 2- 3 decades.

You not only are wise enough to see, but brave enough to admit it.

We can rail hardily against the designers and lean on the system.
It is democracy in action.

The system is the real problem.
The only way to fix it is we all lean together.
Teamwork.
Obama is the driver, so lets all focus on the road ahead.

GDP declined <4% and negative growth lasted for <1 year.

Depression would be roughly twice as bad and long.
Negative GDP growth of 10% or more and negative growth for 2+ years.

And if Obama (and Dems) hadn't taken over we'd be in deep right now.

We are still at a precarious point.
Only the massive debt undertaken has halted the depression's progress.

A depression is or isn't. It is like saying someone is kinda pregnant.

Most of the stimulus was simply wasted. It produced a negligble benefit for a massive cost.
Stabalizing the financial system was necessary however TARP was about the worst (for taxpayers) and most expensive way possible.

The too big too fail banks should have been nationalized and the smaller ones allowed to fail.
Under federal receivership the toxic assets strip from the books and bondholders and shareholders wiped out in BK court.
The toxic assets spun off and sold for pennies on the dollar to those willing to take the risk.
The restored banks could have been split up aka baby bells and govt stake sold off to recoup substantial portion of the cost.

Legilsation should then have passed making "too big to fail" impossible. Giant banks don't get too big to fail by growing (law of large numbers). They get that big by buying other banks.
Govt could simply prohibit any sale that would result in an asset concentration that would cause a too big to fail scenario.

You too want the bankers to remain free?
Just slap their hands?

A depression has its start in a recession.
It started.
The recession was leading into depression and a lot of people far smarter than you have claimed as much.
Obama and the Dems put the brakes on the depression.

For now.

No wait they didn't TARP, auto bailouts, and (most of the) stimulus are all crap.

There was no depression. Some people said we were headed TOWARDS a depression. Some disagree. Maybe we avoided one. Maybe we didn't.

However you statement is wrong.

One thing you might want to consider are the economies of Japan, China, Korea, Australia, New Zealand, Germany, and France.

All of them are much further in recovery and unemployment has already peaked. Why? Because their stimulus was actually targeted and had a stimulative effect.

Sorry a turd is a turd even if it is Obama's. Keep shining but you aren't going to turn that turd into a bar of gold.

I don't HAVE money to take out of the system. I bet there are millions in the same boat.

It wouldn't have mattered one way or the other to me if they'd let Wall Street sink or swim.