by John Hawkins | November 21, 2008 9:56 am
Question: “What’s your guess for where the bottom is for the DJIA and S&P500? How long will this Obama recession last?” — RWNReader2
Answer: I don’t know the answer to that for sure, but I will tell you this: it could get “Jimmy Carter years” ugly out there. That’s particularly spooky to me since I make a living blogging and the first thing to usually get tossed in a recession is advertising money.
I’ve already started cutting expenses. I was going to buy a computer on Black Friday. Instead, I am going to wait another year. On Christmas gifts? I am cutting way, way back. CPAC? I think I am going to have to skip it this year. I’m even looking into ways to cut down on the amount I’m spending around the house on a monthly basis — and none of that is based on any revenue loss that has already happened; it’s based on what I think the next year — or two — or maybe 3 or 4 will look like.
In the end, we can’t know how long this will last because we don’t know how the government will react, but take a look at some of these 30 factors from a Market Watch piece predicting a depression (hopefully, that’s too glum of a forecast) and tell me that people shouldn’t start saving as much as possible,
* America’s credit rating may soon be downgraded below AAA
* Fed refusal to disclose $2 trillion loans, now the new “shadow banking system”
* American Express joins Goldman, Morgan as bank holding firms, looking for Fed money
* Treasury sneaks corporate tax credits into bailout giveaway, shifts costs to states
* State revenues down, taxes and debt up; hiring, spending, borrowing add even more debt
* State, municipal, corporate pensions lost hundreds of billions on derivative swaps
* Consumer debt way up, now at $2.5 trillion; next area for credit meltdowns
* Fed also plans to provide billions to $3.6 trillion money-market fund industry
* Freddie Mac and Fannie Mae are bleeding cash, want to tap taxpayer dollars
* Hidden costs of $700 billion bailout are likely $5 trillion; plus $1 trillion Street write-offs
* Commodities down, resource exporters and currencies dropping, triggering a global meltdown
* Big three automakers near bankruptcy; unions, workers, retirees will suffer
* Corporate bond market, both junk and top-rated, slumps more than 25%
* Retailers bankrupt: Circuit City, Sharper Image, Mervyns; mall sales in free fall
* Unemployment heading toward 8% plus; more 1930’s photos of soup lines
* China’s sees GDP growth drop, crates $586 billion stimulus; deflation is now global, hitting even Dubai
* The 800-pound gorillas: Social Security, Medicare with $60 trillion in unfunded liabilities
* Now 46 million uninsured as medical, drug costs explode
* New-New Deal: U.S. planning billions for infrastructure, adding to unsustainable debt
Here’s my advice: hope for the best, but prepare for the worst.
Source URL: https://rightwingnews.com/top-news/qa-friday-98-how-bad-will-the-recession-be/
Copyright ©2021 John Hawkins' Right Wing News unless otherwise noted.