hoover

How High Will Unemployment Go?

I was born in the middle of the depression. Some people in the town I'm from NEVER had a job, and got by only by doing a few side jobs. They had families to support. Farmers were wiped out; their crops were worth little IF they could even sell what they produced, and the proceeds wouldn't pay for the cost of the previous year's crops. The current recession seems more ominous than ANY of the cyclical recessions we have had since the thirties. The asset price drops, enormous U.S. debt, and the government that doesn't have a clue what to do, are all parallels with the thirties. A change in administrations in 1932 (Hoover out, Roosevelt in) didn't really change much except Roosevelt created more optimism which helped a little. WWII began to change everything because the government in effect nationalized most industry to produce war goods, men were taken out of the unemployment lines to serve in the army, and good paying civilian jobs became available. One difference between today and the thirties is that government already sends out trainloads of money each month for social security, medicare, unemployment, defense contracts and payments to other entities too numerous to mention. That may help this time around.

S&P Set for 50%+ Gains? Not So Fast, UBS

True. All you have to do is look at the several major bear market rallies from 1929 through 1932. These were big rallies on the Dow lasting months. Prosperity was "right around the corner" acording to the politicians of the era, but they never found the right corner. When the first cycle was over the Dow had lost a "mere" 89%. Then the market rose for a few years, before collapsing again slowly in the late thirties. Finally WW-II began, millions of young were pulled from the work force to fight the war (reducing unemployment), government took over production to produce war equipment, the equipment was destroyed in the war reducing supply, consumers products were rationed further reducing supply, and pay was pumped into workers pockets that couldn't spend the money because goods were unavailable, Result after the war: people had money to spend for the first time in 15 years, high demand existed from a goods-starved population, and companies were converting back to consumer goods to increase supply. Demand was high, U.S. was victorious, and people had money to spend -- the thirties depression in 1946 was finally over. Today, like 1930, we have too many goods (supply) and too little money to buy the goods. Obama and his financial team are going to have many sleepless nights.


On Dec 06 04:12 PM the_feds_corrupt wrote:

> The banks right now are "flush" with cash from the fed.The banks
> are begining to buy each others stocks .Look for the financials to
> lead the way in the next bear rally.They will attempt to "jump start
> the markets" and then sell their positions before the average investor
> is just getting fully invested.In that way the banks will reap handsome
> profits.
> They will also do the same thing with the chinese market.
> All depressions and recessions have large bear market rallies -we
> will have one as well.
> Watch for the following to determine when a rally begins
> 1) investor sentiment seems hopeless
> 2)the market shakes off "bad news" or becomes immune to bad news.
>
> 3)the Russell 2000 leads the way up.
> 4)The financial sectors garner strength.
> Once these forces become apparent we will have a rally. It will not
> sustain itself -but we will have it !
> It could take us from 11k to 13k somewhere in that range.
> It happens in ALL bear markets it will happen here as well.
> g/l to all cheers...;}

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.