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Is the US in an economic Depression?

post #1 of 32
Thread Starter 
Well,
the economy is not looking good in the US and elsewhere. The loss of public trust in US financial markets which were supposed to be the bedrock of them all, is shot. That, compiled with the advent to terrorist attacks an its implication on the economy, bad analysts, the enrons, increasing debt, a declining dollar, and increasing unemployment leads one to ask:

Are we in a depression?

I don't think the US govenerment is going to say so. This is beyond "a few bad apples" and Bush's speech tomorrow will probably not do much. And Harvey Pitt, SEC Chairman. Can it get worse?

[ 07-08-2002: Message edited by: eat@me ]</p>
post #2 of 32
Well at least we still have the strong Euro...
post #3 of 32
i think there are certain quantitative metrics that have to be passed before its actually a depression. A year or so ago it there was a slow-down, and it wasn't called a `recession` until the markets are lost a certain percent over a certain period of time.
post #4 of 32
We are not in a depression, our economy isn't shrinking. But we are in a lingering recseeion no matter what the bulls say. A lot of corrupt book cooking is being exposed, but unless everyone panics, this is unlikely to turn into a depression.
post #5 of 32
[quote]Originally posted by Outsider:
<strong>Well at least we still have the strong Euro...</strong><hr></blockquote>

..that soon will bring me a much cheaper Powerbook

This is the relation between the Dollar and the danish Krone (which follows the euro in a very narrow band).


I say "buy" when the dollar is at seven Kroner. Buy Powerbook that is

The 667 PB is 27.500 Kroner right now. If I go to US when the Dollar is at 7 kroner I would save 27.500-7*2500 = 10.000 or over 1.400 minus the ticket. I don´t hate you guys so much that I wouldn´t do that
"I reject your reality and substitute it with my own" - President Bush
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post #6 of 32
Yeah let's see that graph for the last three years instead of the last week.
post #7 of 32
Last week? Its the last 6 month.
"I reject your reality and substitute it with my own" - President Bush
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post #8 of 32
[quote]Are we in a depression?<hr></blockquote>

No.

Next question.
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post #9 of 32
OK I see. I looked at the first date and last date and thought it was for a week. For us Americans we list the month, then day, then year. So 07-02-02 is July 2nd 2002 and 07-06-02 is July 6th 2002. Had I looked at the dates in between or bothered to see that it was a European source I would have realized my mistake.

Still, a 3 or 4 year graph please.
post #10 of 32
Oh it could be the date code that is confusing. We use dd-mm-yy instead of mm-dd-yy

Here is for a year:



and two years:

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post #11 of 32
I don't hope that US is in depression. Because each time US is in depression Europe and most of the rest of the world enter also in a depression.
Even if it was not the case, i will not hope that US enter in depression.

[ 07-08-2002: Message edited by: powerdoc ]</p>
post #12 of 32
[quote]Originally posted by powerdoc:
<strong>I don't hope that US is in depression. Because each time US is in depression Europe and most of the rest of the world enter also in a depression.</strong><hr></blockquote>

We are better shielded now than we have been before. Last time we had real problems it was factors external to both Europe and US that caused it (oil prices in Middle East). During the "burst of the IT bubble" we actually lowered our unemployment rate and bettered our foreign trade accounts.
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post #13 of 32
any capitalism economy will fluctuate back and forth, but the problem is that in September we were on the way down, and it would have been nothing hadn't the arab terrorists flown planes into New York. Now, I suspect, would be the bottom of the slump, made worse and elongated by the fact that people are edgy about terrorist attacks. Investors (read spenders) will soon realize the lucrative (low) market and will likely start buying up stocks. I think they're just waiting right now for a little bit more stability. Once that happens, things will start going back up.

But by definition a depression is a recession that lasts some specific amount of time. I forget exactly, but I don't really care either. The economy will rise again. Unless something tragic occurs, we should be on the up fairly soon.

So buy stocks now, when they're low.
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post #14 of 32
When United States people don't complain about the prices that Apple priced on their Macintosh computers, that's when the United States is out of depression. In the mean time, figure out by yourself if the United States is in a depression or not.
post #15 of 32
While there is a percise definition for a recession, there is no real critiria for a depression.

I guess since people still can't decide if the black thurs(sp?)in thr 80s was a depression there is only 1 recorded depression in the US. So it's which yardstick one wants to measure with.

I think we're a long way off from my idea of a 'depression'. The US then was really Depressing. Back in that time President R. borrowed heavily to create jobs and even 'lied' to the people at one point about the status of US banks among other things.

We are far from needing to do anything close to that. IMO the 80s crash was a bunch of pampered suits screaming "the sky is falling". Not that it wasn't serious, but nowhere near the level of the recorded depression.

~Kuku
post #16 of 32
Thread Starter 
I went back to San Francisco recently and SF and technology are in a depression. Many people either out of work for months or moved out. This is beyond the dot com bubble burst but one that has expanded to most of high tech, telecoms, and media called TMT here in London.

London TMT is definately down alot. being here for over a year, I have seen a lag about 6 months. You know the old saying "when US sneezes, Europe catches a cold". Well, the US has a cold in TMT.

So, maybe not a depression in all of US but certain sectors and certain areas like SF are very hard hit and this has repercussions around the world.

US doesn't like to use the R word let alone the D word (Depression) but this is worse than '91.

US will pull out of it, just a matter of time....and confidence building measures
post #17 of 32
I hate to say this, but...the economy in the 90s had soared to great heights, and the elastic is streched too far (I think this is the metaphor) and it must contract eventually. When will the US hit a depression? 1810, 1870, 1930, when will the next be?
post #18 of 32
Not having a job for 6 month is nothing compared to the 4-8yrs of the real depression.

A recession is 3 fiscal quarters of a downslope curve. So a depression must be much worse then that.

~Kuku
post #19 of 32
[quote]Originally posted by digix:
<strong>When United States people don't complain about the prices that Apple priced on their Macintosh computers, that's when the United States is out of depression. In the mean time, figure out by yourself if the United States is in a depression or not.</strong><hr></blockquote>

You do hit on a salient point.
In 1980, the average CEO at a major corporation made as much as 97 minimum wage workers. In 2000, they made as much as 1,223 minimum wage workers.

The minimum wage has not kept pace with inflation, or productivity. Accounting for inflation, the minimum wage should be around $8. If the minimum wage kept up with productivity, it would be almost $25. Once I find the book I got the numbers from, I'll post more. The disparities are sickening.

Here's a great page (lots of juicy numbers) that talks about the minimum wage and the proposals for a "living wage" (considering the current salary for a full-time minimum wage worker is well under the already ridiculously low poverty line):

<a href="http://www.adaction.org/mwbook.html" target="_blank">http://www.adaction.org/mwbook.html</a>
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post #20 of 32
We are not even close to depression. We were never even technically in a recession. Actually, the definition of a recession is TWO cosecutive quarters of negative growth. That never happened.

There are sectors of the economy that are doing very well, such as real estate. The stock market is doing well, but that doesn't represent the entire economy. Unemployment is still under 6%, which is phenomenal. In 1991 we were near 7%.
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post #21 of 32
Fact: To be in a depression, you first must be in a recession.

Stop watching exaggerated reports on the news and look at the facts. It's people like the first poster that help weaken our economy because they don't know what is ACTUALLY going on and are panicked over nothing.
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post #22 of 32
Panics have always pushed common recessions (recessions hit about once every 5-10 years on average) into depressions. As another poster pointed out, the US has not actually seen a shrinking economy, simply an economy that isn't growing as fast. Some people consider that as part of a recession, but a depression definitely has to stay in "negative growth" (i.e., shrinking) territory. That's not happening, and if we could just keep our heads and make the bad guys play straight, we'll have little to worry about in terms of economic growth. Things are hard right now, but it's not that bad. You won't have to ask the question if it's that bad.

[ 07-08-2002: Message edited by: BuonRotto ]</p>
post #23 of 32
We're not in a Depression, but in my opinion stocks are still seriously overpriced and should go down even more. You can only defy reality for so long.
post #24 of 32
[quote]Originally posted by trick fall:
<strong>We're not in a Depression, but in my opinion stocks are still seriously overpriced and should go down even more. You can only defy reality for so long.</strong><hr></blockquote>

This is the honest truth many are afraid to hear. Good post! In the mid 90's, so many stocks and really the whole market rose at a rediculous rate because of new tech related innovations. Hell, it wasn't that long ago that the dow was between 2000-3000. We are just in a period of reality and stocks are coming back down to realistic levels and those companies that took advantage of the high priced stocks *cough* Worldcom */cough*and all those tech startups that had no real product *cough* Transmeta */cough* are now having trouble.

[ 07-08-2002: Message edited by: G4Dude ]</p>
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post #25 of 32
I too think stocks are extremely overpriced.

I remember after the tech burst some business magazine (sorry my memory is bad) posted a graph on The Dow Jones.

It showed that during the late 20th century, the Dow started to soar at a much higher angle than before, and only after the tech crash did the Dow Jones start to grow at more realistic levels.
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post #26 of 32
Noooo. We are not in a drepression. Only because my parents lived through it and from what they told me, this ain't it now. Imagine homeless people wandering your cities, towns and neighborhoods and begging for scraps every day and night. Imagine absolutely no jobs at all. Businesses crumbling left and right and their CEOs, CFO's and investors leaping from buildings. My parents skimmed by pretty well during the original one. They had hard times but many of their rich friends lost everything and either committed suicide or died in obscurity. Even through all this, most people helped each other through those times. I think that if an economic depression of the that magnitude occured today there would be utter chaos.

Do a search on the web or go to a library and find the facts. I'm checking this <a href="http://econ161.berkeley.edu/TCEH/Slouch_Crash14.html" target="_blank">one site</a> myself now. Look at this graph. When we repeat this, then you can call it a depression...

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post #27 of 32
I already answered the question!
Keep moving people, onto other threads.
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post #28 of 32
[quote]Originally posted by groverat:
<strong>I already answered the question!
Keep moving people, onto other threads.</strong><hr></blockquote>

Groverat, super genius, wannabe moderator eats topic and moves on.

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post #29 of 32
" Are we in a depression "?

No, not even remotely close.

" Can it get worse? "

Yes. It was worse in parts of the mid 70's and late 80's what we had then was serial recession. We'd just get out and slide back into another after a few years. And of course the real thing in the early 30's which I don't think most people today understand how austere things are during that kind of slump.

[ 07-09-2002: Message edited by: jimmac ]</p>
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post #30 of 32
i tell you what's depression is the weather in athens today!
post #31 of 32
[quote]Originally posted by jimmac:
<strong>
" Can it get worse? "

Yes. It was worse in parts of the mid 70's...</strong><hr></blockquote>

To illustrate: the Dow closed lower on December 31, 1979 than it did on December 31, 1969. The 70's were brutal.

[ 07-09-2002: Message edited by: spaceman_spiff ]</p>
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post #32 of 32
[quote]Originally posted by Artman @_@:
<strong>

Groverat, super genius, wannabe moderator eats topic and moves on.

</strong><hr></blockquote>


<img src="graemlins/lol.gif" border="0" alt="[Laughing]" /> <img src="graemlins/lol.gif" border="0" alt="[Laughing]" />
<img src="graemlins/lol.gif" border="0" alt="[Laughing]" /> <img src="graemlins/lol.gif" border="0" alt="[Laughing]" />

I was joking, but I love that picture and the caption. <img src="graemlins/lol.gif" border="0" alt="[Laughing]" />
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