Is the US in an economic Depression?

eat@me

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>

outsider

Well at least we still have the strong Euro...

thuh freak

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.

buonrotto

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.

anders

[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

colanderofdeath

Yeah let's see that graph for the last three years instead of the last week.

anders

Last week? Its the last 6 month.

groverat

[quote]Are we in a depression?<hr></blockquote>



No.



Next question.

colanderofdeath

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.

anders

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:

powerdoc

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>

anders

[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.

splinemodel

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.

digix

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.

kuku

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

eat@me

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

majormatt

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?

kuku

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

mozillaman

[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>;

sdw2001

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%.

g4dude

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.