This is getting weird

[Randy Cresap]

Well looks like we could be entering a depression now.

http://www.iht.com/articles/2008/03/17/business/markets.php

This is so absurd. One man -- elected TWICE -- potentially will be
able to add the following to his resume:

1) Started $1.3 trillion war, occupation, and nation-building police
exercise based upon an erroneous assumption, and misrepresented this
to the American public and the UN. Woops. now bogged down in two
simultaneous wars. Could lose one or both.

2) Obliterated the nominal surplus and oversaw the greatest national
deficit and debt growth in human history.

3) Oversaw the freefall of the dollar and the removal of the dollar as
the world's reserve currency.

4) Achieved diplomatic isolation.

5) Housing crash.

6) Global credit crisis.

7) Global warming crisis, Katrina, etc.

8) Energy crisis with up to $5 gasoline. So far.

9) Biggest erosion of civil rights in our country's history.

10) So many scandals (Gonzales, Libby, Bolton/Miers, Abu Ghraib,
torture, Spygate, destroyed e-mails) that there's no longer any sense
of outrage, only amusement

11) And now, the potential collapse of the global banking system and
accompanying depression.

12) Oh yeah, 9/11

13) Inflation and deflation AT THE SAME FREAKIN' TIME-- HOW IS THAT
EVEN POSSIBLE??????

That's just comical. That's Monty Python absurd. It's like that Kids
in the Hall episode where he comes in and apologizes for that whole
cancer thing. Sure, some of it isn't really the guy's fault, but holy
cow. I mean, holy cow.

What's next? Accidentally causes the zombie holocaust?

I am laughing as I type this. This is hilarious. And people are
worried about Obama's middle name? I want to kill myself.

[Louis Jeansonne]

Depression?  You've got to be kidding me.  We haven't even met criteria to be called a recession yet.  (Note: that last sentence is not an invitation for you to throw a plethora of negative statistics at me.  I know there are negative statistics and that bad shit is happening.  All I'm saying is that it is not known for sure that we are in a recession right now.  If you go by GDP criteria, we cannot possibly be in one.  I know there are other criteria, but as far as I know there is no one who had objective criteria for recession developed IN ADVANCE who is now saying "yes, according to my criteria, this is definitely a recession."  Correct me if I'm wrong.)

[Brandon Downey]

Actual story:

http://www.reuters.com/article/ousiv/idUSL1758265520080317?rpc=92

"AMSTERDAM (Reuters) - The U.S. dollar's value is dropping so fast
against the euro that small currency outlets in Amsterdam are turning
away tourists seeking to sell their dollars for local money while on
vacation in the Netherlands.

"Our dollar is worth maybe zero over here," said Mary Kelly, an
American tourist from Indianapolis, Indiana, in front of the Anne
Frank house. "It's hard to find a place to exchange. We have to go
downtown, to the central station or post office."

That's because the smaller currency exchanges -- despite buy/sell
spreads that make it easier for them to make money by exchanging small
amounts of currency -- don't want to be caught holding dollars that
could be worth less by the time they can sell them."

I understand the technical definition of a recession, but everything I
see indicates we are careening towards one, or worse. There are real
reasons why this appears to be worse than a big hedge fund exploding,
a financial crisis like portfolio insurance in 1987, or even the dot
com collapse.

In all those cases, lots of people (sometimes 'real' people) took a
bath, but the fundamental economy was fine, and after investor
confidence was restored, the economy continued growing.

In this case, the investment banks, who provide much of capital for
future ventures and growth in the US, are running out of money, or
teetering on the verge of bankruptcy. There is also a panic, since the
financial instruments which brought them to this place are poorly
understand *and* have potentially much greater losses as the
foreclosure rate rises. So, it's hard to get people to give the
investment banks more capital (even if you trusted their management,
how can you be sure that you know more than they do about their
obligations), and it's hard for investment banks to disburse any
capital.

This is a recipe for a financial disaster. I hope that the outcome of
this is only a recession -- we have a few quarters of retracting as
the banks get their houses in order, and the foreclosure rate levels
off at a predictable level, and cooler heads rule.

- Brandon

[Randy Cresap]

I didn't say we're in, or even that there's going to be, a depression.
I said there's the potential for a depression due to problems in the
worldwide banking system, i.e., a liquidity crisis.

That's why it has been called by the ex-chairman the greatest
financial crisis "since WWII" -- i.e., since the Great Depression.
The economy's fine right now, it's the banking system / currency
that's shaky.