Is a Great Depression Looming?
I don’t consider myself an expert on the economy by any means, but over the past several months, a number of things have happened that have alarmed at least some people and common sense told me that a long term recession was taking shape. Those items include house prices going down significantly nationwide for the first time in history, the price of oil – something our entire economy and way of life is built on – rising to the highest it has been in history, and the fact that it seems much of the nation’s (and world’s) money is tied up in so-called hedge funds, a fund that nobody can give a definition of (which tells me the fund is “vapor,” like calling software that doesn’t exist but is being sold “vaporware”).
In recent days, a number of other significant developments occurred. The investment firm Bear Stearns was valued at $70 a share a week ago and on Wednesday the CEO came out and said the firm was fine after it started showing signs of losing large amounts of money on the hedge funds it was invested in. Then late in the week it was announced that emergency action was taking place by the feds to save Bear Stearns and on Sunday, JP Morgan purchased Bear Stearns for the shocking price of $2 a share, or 236 million dollars when Bear Stearns was worth 20 billion in January. So, in less than a week, one of the largest investment firms in the world has essentially gone under. Then there was another emergency rate cut that occurred on Sunday, which is unprecedented to occur on a weekend.
This is the type of stuff that happened before the Great Depression, but I wasn’t that worried about it that much. I considered it all a continuing correction to the way over-the-top housing market of recent years that was bound to burst and did. That is until I read the news today. Today our fearless President, George W. Bush, stated that the feds are “on top of the situation.” Like I said, I’m not an expert on the economy, but I do consider myself to be an expert on detecting certain behavior patterns in people. What this statement from Bush tells me is that:
A) The economy is indeed in a crisis.
B) The economy is going to get much worse.
I say this because, like him or not (most people do not at this point), he has exhibited the need to make statements prior to bad times and has exhibited the need to lie about the reality of what faces us. There are several notable occurrences of this behavior that we all should know – insisting that everything is fine in New Orleans after pictures of massive flooding occur on the television in the wake of Hurricane Katrina, stating that Iraq unequivocally had weapons of mass destruction prior to going to war with Iraq, and insisting that the war in Iraq would be a quick one, even stating that major combat had ended at one point. The reality was that the flooding from Katrina was going to kill over a thousand people, Iraq did not have weapons of mass destruction and our credibility worldwide faltered as a result of this lie, and the war in Iraq has not been quick with the current realistic debate being between four and twenty years of us being in Iraq.
I personally think Bush is lying now and I am spooked now that Bush has spoken up. I also personally think that the top economic advisers probably muttered the words “a great depression is probably coming” to Bush over the weekend. There’s the additional fact that the video and pictures of him today speaking have him looking like crap. While this could indicate a long weekend of trying to do crisis management and damage control with our economy, I’m less convinced the economy is the reason he looks so bad. It could simply be that he spent the weekend doing hookers and blow.