Wall Street looking forward to close out 2008 with numbers close to 1931

[Rich Parsons]

From: http://news.yahoo.com/s/ap/20081228/ap_on_bi_st_ma_re/wall_street_week_ahead

Wall St. faces record losses in last week of 2008

By JOE BEL BRUNO, AP Business Write



NEW YORK – Investors are preparing to close out the last three trading days of 2008 with Wall Street's worst performance since Herbert Hoover was president.
The ongoing recession and global economic shock pummeled stocks this year, with the Dow Jones industrial average slumping 36.2 percent. That's the biggest drop since 1931 when the Great Depression sent stocks reeling 40.6 percent.

...

If the market is down 36.2 percent for the year and it down even more if you go back to 2007 when it was higher yet, and a 40.6 percent was the biggest drop during the depression of the 30's, is 4% all that separates us from a depression?

Or are our double digit unemployment not higher enough to be called a Depression?


I remember during the Gulf War in the early 90's the media inducing a recession with comments like "We have never exited a war without a recession." Is the government and the media looking to avoid this influence by denying the current state?


I mean that if we are barely now into a recession, and not everyone agrees with that, what does that really mean?

What is a recession or a depression?

 

[stickarts]

Different economists seem to give different responses as to exact meaning of each term. Generally I have heard a depression is any economic downturn where real GDP declines by more than 10 percent. A recession is an economic downturn that is less severe. The numbers game can sure get confusing. All I know for sure is that my company had layoffs not long ago and there are more on the way!

 

[Ray]

Definition from a by-gone era: A recession is when your neighbor is out of work. A depression is when you're out of work.

The Dow Jones Industrial Avg was 71.56 on July 1, 1932. It was 8468.4805 on 12/24/08. What was unemployment at that time compared
to now? (then it was about 25%)

If we look at GDP, we have to remember that gov't spending figures in the calculation.

 

[Bob Hubbard]

Great Depression wasn't caused by the market crash, but by a lack of cash in the economy. Jobs were lost because employers had nothing to pay them with. If people are spending, and they are, we'll be ok.

What could cause us to go over the edge is if all that bailout money gets stuck out of the market, while credit continues to dry up, and consumers continue to spend less and less, causing an escalating spiral of cash shortages in the market. If the FR floods the market with more cash, it will short term cause a pause, with the risk of hyper deflation, leading to a truck load of hundred dollar bills not being able to buy lunch at McD.

If we crash, blame the financial market experts, and our moronic government for it all.

 

[Rich Parsons]

Great Depression wasn't caused by the market crash, but by a lack of cash in the economy. Jobs were lost because employers had nothing to pay them with. If people are spending, and they are, we'll be ok.

What could cause us to go over the edge is if all that bailout money gets stuck out of the market, while credit continues to dry up, and consumers continue to spend less and less, causing an escalating spiral of cash shortages in the market. If the FR floods the market with more cash, it will short term cause a pause, with the risk of hyper deflation, leading to a truck load of hundred dollar bills not being able to buy lunch at McD.

If we crash, blame the financial market experts, and our moronic government for it all.

So what is happening to the money provided to the finance community for loans and to help the economy?

My thoughts and I do not have the proof as no one has forced them to report, or at least report where I can find easily:

1) They are spending the money over seas to:
a) Free up their debt issues there
b) To buy up "deals"

2) Buying up smaller banks and Credit Unions that are more secure, to change their bad debt to good debt ratio

3) Spending money on national and international private flights to locations to see "new investors", in locations that are warm and seem to have lots of party like events.

4) Increasing the bonuses for those one top, while putting more on the street without a job.

5) More ...

6) All of the above

7) None of the above as I am way off base, and I just do not know what is going on due to lack of information. (* Information that Finance Community refuses to provide to the Government. *)

 

[Bob Hubbard]

Good question Rich.

Seems when you ask them they say "Not gonna tell you".

Seems Congress ****ed up, in not including something as logical and obvious as "accountability" eh?

 

[Rich Parsons]

Good question Rich.

Seems when you ask them they say "Not gonna tell you".

Seems Congress ****ed up, in not including something as logical and obvious as "accountability" eh?

The second half of the TARP monies, $700 Billion ($350 Billion) still has not been given out. Since they were able to put stipulations on the $17.4 Billion for the Auto Industry, that means if enough people call and write their legislatures they could put the same requirments on the Finance Companies.

I agree with $1 in come until paid back.

I agree with no special bonuses or stock options to off set the $1 pay.


But, until more people than just me complain and blog about it, Congress will tihnk they got away with it and so will the Finance companies.

 

[BrandonLucas]

I would love to write in to my congressman, but I really don't know what to write. I'm still very much a noob to all of this stuff, but I know enough about it to say that it sucks.

When I try to research some of this stuff, I stll get into things that are just way above my head, no matter how much I want to understand or try to understand it.