The Bush Depression
In a few weeks we will make a choice that will decide our future.
I follow an economist named Bob Proctor. He has called the top and bottom of every market crash since the 70s correctly.
Also, he perfectly predicted the current real estate market meltdown and the picture he paints about what will happen in the next couple years
is terrifying.He thinks it will be worse then the great depression.
The banks in the U.S. are going under one after the other. Countrywide the largest morgage bank in the world,Bear Stearns, Lehman Brothers and Merrill Lynch which are 3 out of the top 5 wall street firms. Also, Fanny and Freddy Mae which hold 50 percent of the home loans in the United States.
The government took them over because they are essentially bankrupt.If they didn't the entire financially system would virtually shut down, the stock market would crash and we would suffer beyond what any of us have seen before.
McCain just like Bush " doesn't understand the economy".
That not just my opinion its his own words. Not only does he not understand how to fix it but he does not understand exactly what is broken.
It is no surprise that he doesn't. The people that make up these securities use complex mathematical models very few people understand.
Bush and McCain both can take the credit for this mess since they helped deregulate the laws that were protecting us.
Bush's economic advisor Phil Graham wrote the deregulation bill that allowed banks to take huge risks with all of our future.
Now, Phil Graham is the head of McCain's economic policy.He is also McCain's choice for the next secretary of the treasury.
No one in this country can afford for that to happen. The last time Bush met with his economic advisors was in March. He either didn't care or didn't realize that anything was wrong. Phil Graham had the guts to say that we are in a mental recession after he helped create the worst economy meltdown in our lifetime.
It will take the best and brightest minds in the world to get us out of this nightmare. As bad as Bush has done, McCain would be
even more destructive because things are in much worse shape. The next president will not inherit a surplus like Bush did but a tanking economy and a 11,600,000,000,000 (trillion) dollars deficit.Bush created a national debt larger then the first 42 presidents combined
If you do what you have always done then you will get what you have always got.
When it comes to policy Bush and McCain are the same 90 percent of the time.
So why isnt obama 25 points ahead
The chairman of McCains campaign recently said that people don't vote on issues they vote on a personality composite. Which means he is trying to sell you personality instead of results.
Let's teach him we are smarter than that .
31 states are voting now, dont wait
Elect Obama Biden 2008
Check out this video of sarah palins interview before you vote
http://www.youtube.com/watch?v=r36Xc0GG4i
Bernanke’s Balancing Act
Can you block a recession without creating inflation?
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Call it Ben's big gamble. Traditionally, the Federal Reserve has had two main goals: suppressing inflation and preventing financial panic. Since August the Fed has tried to juggle the two, providing enough new money and credit so that financial markets work smoothly without providing so much that inflation picks up. The Fed's straddling has subjected chairman Ben Bernanke to intense criticism. Some have charged that the Fed was behind the curve and that Bernanke, a former Princeton economist, was out of touch with the markets. Well, on Monday Bernanke capitulated. The Fed cut its key interest rate from 4.25 percent to 3.5 percent and hinted that further rate cuts might come as early as next week.
The Fed's surprise move didn't win Bernanke many fans during Wall Street's early hours of trading. At its worst, the Dow was down 3.8 percent today. The market rebounded, but the Dow ended the day at a 14-month low, the S&P at a 16-month low and the NASDAQ at its lowest level in 15 months. Today's turmoil comes on the heels of a massive sell-off in world stock markets on Monday. (U.S. exchanges were closed for the Martin Luther King Jr. holiday.) Germany's market was down 7.4 percent, Japan's 3.9 percent and Britain's 5.5 percent.
The Fed's 75 "basis point" cut was the largest since the Fed began explicitly targeting interest rates in the early 1990s. By making the adjustment the Fed is betting that monetary policy will stabilize the U.S. economy and, by extension, global markets. But the gamble is profound. It assumes that the slowing U.S. economy will automatically dampen price and wage pressures so that cheaper money won't trigger an inflationary spiral. Economist William Poole, president of the St. Louis Fed, dissented, indicating that some officials believe the Fed is making a bad bet.
Until last summer the Fed was concerned mostly with fighting inflation. Since June 2006 the overnight Fed funds rate had been at 5.25 percent, the highest level since March 2001. But then the rapid deterioration of the housing market increased the odds of a recession and resulted in large losses on "subprime" mortgage-backed securities. Citigroup, Merrill Lynch and Bear Stearns all suffered big losses, fanning fears of a "credit crunch" as lenders and investors cut back on new commitments. The subsequent cuts in the Fed funds rate aimed to ease those fears by lowering borrowing costs for banks and other financial institutions. Up to a point the medicine worked, but in the past few days confidence in global financial markets "deteriorated at electrifying speed," as economist Roger Kubarych of UniCredit puts it.
What's extraordinary about this is that, although most forecasts show a weakening economy, few yet suggest anything like a dramatic collapse. For example, in its latest forecast Deutsche Bank projects that the U.S. gross domestic product will grow 2.2 percent in 2008, the same as in 2007. To a large extent the Fed and Bernanke seem to be fighting a self-fulfilling loss of confidence that could turn an otherwise mild slowdown—or recession—into something worse. If consumers and investors lose confidence, they'll retreat from both shopping malls and stock markets. Former Fed governor Laurence Meyer of Macroeconomic Advisers thinks the Federal Open Market Committee will cut rates again next week at its regular January meeting.
Still, Bernanke's gamble isn't guaranteed to succeed. Since World War II the Fed's greatest blunder was to unleash double-digit inflation. In 1960 consumer prices rose 1.4 percent; in 1979 the increase was 13.3 percent. With hindsight it's clear that Fed policies were too loose, creating too much money chasing too few goods. But that was not so apparent at the time, when the Fed responded to public pressure to minimize recessions and keep unemployment down. It loosened money and credit, and the effects on inflation showed up a couple of years later. There was a steady upward creep; that is the risk Benanke is now running.
© 2008
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