Ben Bernanke, 2009: "We'll see the recession coming to an end probably this year."
Ben Bernanke, 2007: "The subprime mess is grave but largely contained."
Ben Benanke, 2005: "There is no housing bubble."
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Well, doesn't that sterling predictive track record fill you with confidence.
Meanwhile, out here in reality:
--The U.S. is gunning up. According to the Wall Street Journal,
The FBI's criminal background check system showed a 23% increase in February over the previous year, a 29% increase in January, a 24% increase in December and a 42% increase in November, when a record 1.5 million background checks were performed. Yes, people fear President Obama will take away the guns he thinks they cling to, but a likely equal contributor to what The Wall Street Journal's MarketWatch called a "gun-buying binge" is captured in the slogan on one firearms maker's Web site: "Smith & Wesson stands for protection." People are scared.
The FBI's criminal background check system showed a 23% increase in February over the previous year, a 29% increase in January, a 24% increase in December and a 42% increase in November, when a record 1.5 million background checks were performed. Yes, people fear President Obama will take away the guns he thinks they cling to, but a likely equal contributor to what The Wall Street Journal's MarketWatch called a "gun-buying binge" is captured in the slogan on one firearms maker's Web site: "Smith & Wesson stands for protection." People are scared.
From the same article we learn that the demand for gold is also rising...so fast, in fact, that the U.S. Mint has "temporarily suspended production" of American Eagles "because of unprecedented demand".
No less an authority than the New York Times is counselling people on how to walk away from their mortgages. Entire neighbourhoods in many cities are all but vacant. The enduring image from this piece by Neil MacDonald is a late-model car sitting in the driveway of an abandoned house in Fort Myers, Florida. A sign affixed to the car threatens it will be towed in three days if it isn't moved: the sign has been there for nine months...the city can't afford to follow through.
The Telegraph in the UK warns that Britain is headed for "a 1930s-style depression". Those at most risk are families with high levels of debt, as deflation will cause service costs to rise relative to everything else.
The Telegraph in the UK warns that Britain is headed for "a 1930s-style depression". Those at most risk are families with high levels of debt, as deflation will cause service costs to rise relative to everything else.
So Ben, ole buddy ole pal, are ya feelin lucky? Or are ya just full of shit?
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When the fit first hit the shan back in September, my wife asked me where I thought the war would be. I wasn't tracking her. "What war?"
"The war that will end the depression we're about to have. There always is one, right? So where will this one be?"
I didn't have an answer for her then. I do now.
Somebody's going to pull something. Actually, I believe a few somebodies are going to pull a few somethings.
A lot of people are worried about China. I'm not. They own a trillion dollars of American debt and thus have the U.S. by the short and curlies. They know it, the U.S. knows it, and any military action they undertake on this side of the world is just pointless overkill. Now, they could well decide to put an end to all this Taiwanese/Tibetan independence talk that's been grating on them for years, and what are we going to do? Stop them? Pshaw.
I think Pakistan is a definite possibility to go pear-shaped. It's already simmering on two fronts, and Karzai's widely viewed as a puppet controlled by the U.S.
But my money's on Russia: Putin's a crafty sonovabitch and I fear he'll keep trying little pinpricks to see what he can get away with. The uproar was such with Georgia he was forced to withdraw; even at that, he did so insolently and at his leisure. With American attention diverted into so many areas at once, I think Putin will seize the opportunity to augment the Motherland.
Those expecting war beyond the borders of the United States should be reminded that in many ways, they are facing a Weimar moment. (I hesitate to post this from commondreams.org, a site that brands itself nonpartisan and is anything but...however, there are some valid points here amongst the kick-'em-when-they're-down bashing of the right.) It bears watching: if the Republicans really do try to foment resentment and rage rather than help solve the problem...well, then we're in for far scarier times than a mere Depression. And it does seem, at least to this outsider's eyes, that some of them want nothing more than for Obama to fail. Both sides of the political spectrum distrust and fear each other. It wouldn't take much for that volatility to ignite....
4 comments:
Hard to say, but an interesting article.
TSX gained 9.5% last week, 4 straight days in the plus side. Pundits watched closely as it opened today, and guess what ... make er 5 in a row!!
Housing starts are down, but pricing remains somewhat stable. Where I live, there has been no decrease in value ... in fact, two units are up for sale in the $170's, $5K higher than the last sale ... and will probably get it.
I say if you are renting and can afford to do so (downpayment and good credit), get into a house now. The rates are fantastic! Better than when I got in (I'm so jealous)
Senior Canadian economists agree with Bernake, and the market is showing it.
Time--and not much of it--will tell. Bernanke, Paulsen et al still have enough influence that when they break wind, the market blows. I think this is a bear market rally and we'll see the Dow plummet again, probably within two weeks.
That said, I agree with you about home ownership...provided, of course, your job is recession-proof.
I think Ben was using a little of both.
What's missing from all these forecasts of when we'll end this recession is the "how" we'll end it.
I'd love someone to say "how" its going to happen.
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