hoover

Five Ways the Global Economy Is Rebounding

Your optimism is refreshing, but there are always occasional bursts of positive sentiment on the way down as a major bear maket unwinds. There is an incredible amount of leverage out there it isn't just going to go away. Company earnings are just beginning to fall, and unemployment is just beginning to rise in earnest. Farmers are going to get a lot less for their crops this year than they anticipated. And home prices are still dropping. I could mention twenty more things that are negative. But, I hope you are right.

Monetary Madness: Global Margin Call Underway

Depression II is trying to happen; many of the elements are in place. In the 1930's Depression I, home prices were dropping, there was too much debt, commoditiy prices were dropping, profits disappeared because people didn't have the money to buy products, the stock market was imploding, farmers couldn't sell their products at a profit because market prices were too low, unemployment was soaring, banks were failing, and the government didn't know what to do. This time around (as Toni suggests toxic levels are even worse) the situation is potentially worse. Can massive amounts of increased borrowed government money thrown at massive amounts of already shaky borrowed money fix the problem, which was caused by too much borrowed money and leverage in the first place? We are entering a new dimension.