Retired

White Star Line

www.white-star.org


Previous Entry Share Next Entry
Two Cents

Welcome to the second great depression

Stocks fell more in June 2008 then they have in any month since 1930.

Our government tells us it is debatable whether or not we are in a recession.

Actually, I agree. I suppose its possible this is still just a recession.


EDIT: Why is it when I spout some meaningless bit of random crap I get all the interesting comments?

  • 1
loiosh_de_talto July 1st, 2008
It's not government. It's fact. Until our GDP sees negative growth for two consecutive quarters we do not meet the technical definition of a recession. For the first quarter of 2008 it grew. We are not in a recession.

I find the DJI fund a terrible indicator of general economic health. I feel that a combination of core inflation, employment and GDP to be a better indication. Right now our core inflation is increasing at a stable rate and the index is still fluttering. In April the Employment index was down 0.4%, May it was down 0.2%.

What we're seeing is a heavy impact on the community-using market while tech companies continue to post fantastic growth. I would say we are going through an employment shift.

Worst June

ideaphile July 2nd, 2008
Not worst month. There have been many months worse than this June. See Table II:

http://schwert.ssb.rochester.edu/faj90.pdf

And don't assume that just because it's been a bad month for the market, that it's been a comparably bad month for the economy. A lot of the drop in stock prices can be attributed to money moving into the commodity markets, particularly oil.

. png


Are we talking dow jones points or actual value?

titanic July 2nd, 2008
I read your article - that 1987 drop was more points, but represented 6.9% of actual dollar value. The June 2008 drop was over 10%

Actually, none of those numbers mean anything to me. I'm physically watching the economy fall apart and seeing small businesses fail all around me. Now granted, 2008 may well be the only year I will ever work in the civilian economy, but I'm getting a real good first hand look at the effects of all this.

Percentages, not points or dollars

ideaphile July 2nd, 2008
Table II in that reference showed percentage drops for full months. Several months in the 1930s produced declines worse than 10%. May 1940 saw a 22% drop. October 1987 was almost as bad, at over 21.6%.

As bad as it may seem today, it's been much worse before. Our national economy is both broader and deeper; individuals have more accumulated wealth. We'll come out of this without much trouble, just as we did in 1987.

. png


caerdwyn July 2nd, 2008
"Recession" has a very specific meaning... but the media, and any candidate who is not an incumbent, won't let that get in the way. The way it's slopped around, "recession" has about as much accurate meaning when you encounter it as "assault rifle" or "theory" or any other such term.

It is, however, true that we are in an inflationary period, that we are in something of a bear market, that specific major sectors of the economy are hurting, and unemployment (though still low by historical standards) is rising. These are all problems. They, however, do not a recession make. A recession is two or more consecutive quarters of negative gross domestic product growth, and we haven't even had one yet.

Therefore, calling the current economic situation a "recession" is like calling someone with a broken leg a "cancer victim". The broken leg is serious and must be treated, but it's not cancer, even though both are serious medical conditions. Our economy is in serious pain, but it's no more a "recession" than our broke-legged friend is a "cancer patient". We absolutely need to deal with an unhealthy economy; doing so requires accurately describing the problem.

And we begin by slapping down every political candidate, self-appointed "pundit", and brain-defective talking-head reporter that knowingly (or, at least, "should know better") uses important terms incorrectly.

titanic July 2nd, 2008
Well I believe you know what you are talking about, even though I can't really follow it.

If its not a depression or a recession, I guess we need to coin a new third word to describe this.

c_eagle July 2nd, 2008
*nod* ... My mom has already lost around $40k of her savings just since March -_- .

  • 1
?

Log in

No account? Create an account