depression

A Depressing Recession

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We’re battling a recession and it’s getting depressing.

Analysts say our current economic situation cannot compare with the great depression. But MSN Money disagrees; and they’ve found ten reasons that prove otherwise. For example today anyone holding Greek bonds has a reason to be nervous. And our stock market rises and falls based on the news from Europe.

MSN says much like the great depression the causes and effects of today’s recession are global. When the treaty of Versailles ended World War I Germany was given a bill for reparations. And to pay back the victorious European countries they borrowed from U.S. banks then defaulted. Today if a Greek default can’t be prevented the problem could spread to Italy, then Spain and so on.  read more »

Beware the Dead Cat Bounce

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Perhaps you’ve been hearing this very graphic Wall Street trader term bandied about during these tumultuous times. It’s actually been used for decades as a warning to investors that buying into temporary rallies during bear markets can be wealth-threatening.

The other well-worn phrase is “Don’t catch a falling knife”. That refers to watching your favorite stock taking a plunge, and buying more in the often mistaken belief that the fall is temporary.

Actually I think these terms are perfect warning signs right now. After a brief four day rally some Wall Street pundits are predicting the bottom has been reached, and the markets will soon come roaring back. I am an insufferable optimist, and wish I could share their enthusiasm. It’s just that facts get in the way.  read more »

The Great Recession

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The pundits have finally found a name for our pain.

No one wants to call our troubles a depression because that is such a frightening thought. And in fact it is too big a leap. After all, unemployment may be pushing 10 percent, but not nearly as bad as the 20-30-40 percent out of work during the Great Depression. The Dow Jones may be off some 50 percent, but values were down 80 percent back in 1930. And government has a better handle on the problem than President Herbert Hoover ever did.  read more »