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IT'S GOING TO GET WORSE, MUCH WORSE / BEFORE IT GETS BETTER
We are in a deepening Depression which will get worse, much worse before it gets better and that may not be until mid 2010 at the earliest and remember, that's a mid-term election year: Allen L Roland
On March 18th, 2008 ~ I wrote that Wall street is a giant casino and Bear Stearn's demise is just the tip of the iceberg of a potential complete financial meltdown. http://blogs.salon.com/0002255/2008/03/18.html
On July 29th, 2008 ~ I wrote BANK FAILURES GAIN MOMENTUM AS BUSH STAYS IN DENIAL http://blogs.salon.com/0002255/2008/07/29.html
On September 16th, 2008 ~ I wrote DOW PLUNGES / MORE LOWS AHEAD WHEN DERIVATIVES DEFAULT http://blogs.salon.com/0002255/2008/09/16.html
On October 9th, 2008 ~ I wrote BUSH RECESSION WILL SOON BECOME A DEPRESSION http://blogs.salon.com/0002255/2008/10/09.html
And now we are in perhaps the mother of all Depressions and mainly because the rest of the world has been infected by our unregulated greed and financial irresponsibility ~ and is economically going down with us.
Martin Weiss and his Money and Markets team have been spot on for the past three years but his team has just made seven ominous forecasts for 2009 ~ which he calls The Year of the Great Financial Dustbowl.
Here are some excerpts ~
Here's our first forecast: AT LEAST 10% unemployment. If you include discouraged and part-time workers, it will be at least 16%.
A depression is a very severe, multi-year decline in the economy, bringing mass unemployment to every industry and massive financial losses to the majority of the population.
That's what's beginning now ~ a depression. When historians look back at this era, they will probably pinpoint the fourth quarter of 2008 or the first quarter of 2009 as the beginning of America's Second Great Depression.
Here's our second forecast: An unstoppable chain reaction of bankruptcies.
In the third quarter of 2008, personal bankruptcies shot up 30%. Business bankruptcies shot up 49%. And that was before the economy crashed in the fourth quarter. You're talking about potentially hundreds of thousands of companies. The government can't bail them all out. It can't even bail out some of the larger companies filing for Chapter 11.
Here's our third forecast: In 2009, the U.S. government will have to give up saving most of these companies !
You'll be able to count on your fingers the members of Congress willing to vote for big company bailouts while millions of unemployed Americans are not getting the help they demand. They voted for the TARP package by holding their nose, and now most regret their vote. Later this year, every Congressman alive will begin to realize that the faster they throw money at bankrupt companies, the faster they'll be thrown out of office.
Here's our fourth forecast: The federal deficit will balloon to at least $2 trillion.
The Congressional Budget Office (CBO) says it's going to be $1.2 trillion, which is already about triple last year's deficit and is already shattering the record for every deficit since World War II. But we're saying it could go to at least $2 trillion because their $1.2 trillion deficit projection doesn't factor in the cost of the Obama stimulus package which could reach $1 trillion.
Here's our fifth forecast: The Dow is headed to 5500
Here's why ~ All the things we just talked about ~ surging unemployment, which is making consumers slam their pocketbooks shut ... surging corporate bankruptcies, which wipes out the stock values of failed companies ... and the ballooning federal deficit, which drives out corporate borrowers. There's one more critical factor: Deflation ! Deflation is a killer for stock prices. Every time you pay less for gasoline, apparel, toys or computers, the companies selling those products suffer a direct hit to their bottom line. That, in turn, sends shock waves up the food chain ~ to manufacturers, wholesalers, shippers and suppliers. Sales plunge everywhere.
Here's our sixth forecast: Expect a new, more advanced phase in the real estate collapse.
The declines in home values are not ending. The delinquencies are not going to stop. What's changing now is that, with unemployment surging and the economy sinking, you're going to see real estate income drying up.
You're going to see surging personal bankruptcies driving some of the best tenants to do things they rarely did in the past: Bounce rent checks, walk away from their leases, abandon deposits.
Here's our seventh forecast: 2009 will be the year of the Great Financial Dustbowl
When you add everything up, it all boils down to falling income ~ millions of paychecks gone with the wind; interest income slashed to virtually nil; dividend income delayed, reduced or cancelled; capital losses from stocks; home equity, gone.
For many Americans, the scene is ugly: Bills piling up; homes, cars ~ everything they've worked a lifetime for ~ repossessed; a giant wave of personal bankruptcies; the shame of becoming a charity case, dependent on their families or government handouts. http://www.moneyandmarkets.com/7-startling-forecasts-for-2009-29518
Right now, transparency and the truth are all important as to the extent and depth of this current Depression ~ which Obama and congress still have not provided the American people.
When the street riots, strikes and protests begin here as they are currently in Europe ~ this economic crisis will turn into an ugly political crisis as Chris Hedges predicted yesterday.
It’s Not Going to Be OK
By Chris Hedges
The daily bleeding of thousands of jobs will soon turn our economic crisis into a political crisis. The street protests, strikes and riots that have rattled France, Turkey, Greece, Ukraine, Russia, Latvia, Lithuania, Bulgaria and Iceland will descend on us. http://www.informationclearinghouse.info/article21889.htm
Obama's most important task now is to tell the truth ~ Stop wishful thinking, there is no easy way out of this Bush Depression, we need fundamental structural change before confidence in our markets can be restored. It's going to get worse, much worse before it gets better.
Batten down the hatches ~ we're in for some tough days and months ahead !
Allen L Roland http://blogs.salon.com/0002255/2009/02/03.html
Freelance Alternative Press Online columnist and psychotherapist Allen L Roland is available for comments, interviews, speaking engagements and private consultations ( allen@allenroland.com )
Allen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his weblog and website allenroland.com He also guest hosts a monthly national radio show TRUTHTALK on www.conscioustalk.net
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