On The Road To Economic Recovery Or On The Eve Of A Great Depression

Remarkable similarities between where we stand today economically and where the Country stood in 1930, one year after the collapse of the Stock Market (DJIA) in 1929 …….
The Great Depression lasted from 1929 to World War II in 1942, 12 years in length. In nearly half of those years the DJIA recorded advances, in some years, subtantial advances. Did any of those advances signal an “economic recovery”? Of course not!

 

The following claims can be confirmed at these sites:

http://stockcharts.com/charts/historical/djia19201940.html                                                                                              http://seansrant.com/ive-said-it-before-and-ill-say-it-again-the-decline-still-isnt-over-and-heres-why-im-short-the-djia/

 

The DJIA high in 1929 was 381.17. After the 1929 “crash” the DJIA stood at 198.69, a 48% drop.

 

The DJIA “rebounded in 1930 to a high of  294.07, a gain of 95.38 points, a nearly 50% recovery, a recovery very similar to our current recovery in 2009.

 

The real “crash” of the Great Depression began in late 1930 when the DJIA began a decline to a level of 41.22 in 1933. Between 1930 and 1933 there were several sharp “spikes” upward, followed by precipitous drops of the DJIA.

 

Does our current “spike” indicate a recovery? Certainly not!

 

The toxic assets are still on the Bank’s books, yet the financial marklets are leading the recovery. Commercial real estate is on the brink of collapse, home mortgage foreclosures continue to climb – while the Obama mortgage assistance program has resulted in less than 2000 permanently modified mortgages - the President pledged to help 9,000,000. Credit card defaults and personal bankrupties continue to climb and the unemployment rate – incorrectly called a “lagging indicator” – continues to climb. Unemployment doesn’t lag – it is “current” – unemployment can only be said to “lag” other indicators which are actually “predicting” future activity. The DJIA current level is “predciting” that “profits” and associated dividends will be better six months from now -that ”prediction” is based on a set of “assumptions”, one of the assumptions is that unemployment will improve and not worsen. The unemployment rate predicts nothing – it is a number that “understates” a current condition.

 

The DJIA is not predicative of economic health.  

 

 

The following from: http://www.online-stock-trading-guide.com/great-depression-stock-chart.html

 

   

 

If you changed the dates from 1929 – 1930 to 2007 – 2009 you’d have an almost identical set of charts. http://seansrant.com/ive-said-it-before-and-ill-say-it-again-the-decline-still-isnt-over-and-heres-why-im-short-the-djia/

 

 

 

 

 

 

 

The DJIA has “zero” value in predicting whether our economic health has “turned” the corner.

 

To this mix we will now add a half trillion dollars in new taxes to pay for Health Care Reform ….. this is a recipe for disaster!

What is the truth about the underlying fundamentals is our economy ……

At foreclosure auctions, broken dreams on sale

• On 11:52 am EDT, Thursday October 15, 2009

CHICAGO (Reuters) – The seven-bedroom, three-bath house in this city’s West Garfield Park neighborhood had once been someone’s American Dream.

But at a recent auction of about 100 foreclosed houses and condos, it was just Property No. 20 — and drawing no bids from a roomful of buyers despite its bargain-basement price.

“Any interest in this home at $7,000?” fast-talking auctioneer Renee Jones asked the crowd. “If not, we’ll move on.”

 http://finance.yahoo.com/news/At-foreclosure-auctions-rb-853906128.html?x=0&.v=1

 Foreclosures rise 5 percent from summer to fall

US foreclosures keep soaring as unemployment remains main cause of housing woes

• By Alan Zibel, AP Real Estate Writer
• On 1:59 pm EDT, Thursday October 15, 2009

WASHINGTON (AP) — The number of U.S. households caught up in the foreclosure crisis rose more than 5 percent from summer to fall as a federal effort to assist struggling borrowers was overwhelmed by a flood of defaults among people who lost their jobs.

AP – CHANGES headline and intro text; graphic shows total foreclosure filings for past 13 months …

The foreclosure crisis affected nearly 938,000 properties in the July-September quarter, compared with about 890,000 in the prior three months, according to a report released Thursday by RealtyTrac Inc. That puts foreclosure-related filings on a pace to hit about 3.5 million this year, up from more than 2.3 million last year.

Unemployment is the main reason homeowners are falling into trouble. While the economy is likely out of recession, the unemployment rate — now at a 26-year high of 9.8 percent — isn’t expected to peak until the middle of next year.  

http://www.charter.net/news/read.php?id=15958748&ps=1011&srce=news_class&action=1&lang=en&_LT=HOME_USNWC00L1_UNEWS 

This is after an 81% increase in mortage foreclosures between 2007 and 2008. http://www.thestandard.com.hk/breaking_news_detail.asp?id=11900

Credit card defaults up at major lenders

09.16.09
By Nicholas Storie

Over the past few months, banks had been releasing some promising figures regarding credit card defaults – but new data suggests that any signs of improvement may not be lasting.

The latest figures from major lenders implies that previous progress could be more accurately credited to seasonal factors and Americans paying down credit card debt with their tax refunds, according to Bloomberg.

Banks including JPMogan Chase, Bank of America, Citigroup and Discover all reported an increase in credit card defaults – also known as charge-offs – during August. Charge-offs reflect credit card accounts that issuers deem uncollectable.

In particular, BofA reported that charge-offs climbed from 13.8 percent to 14.5 percent last month, while Citigroup saw a rise from 10 percent to 12.1 percent during the same period.

 

 

 

 

  

 

 

 

 

 

http//www.credit.com/news/credit-debt/2009-09-16/credit-card-defaults-up-at-major-lenders.html

 14.5%?  13.8%?   That is more than twice a normal or healthy default rate.

 Personal bankruptcies hits a 4-year high

Mounting unemployment and housing crisis push the filings to the highest level since 2005.

NEW YORK (CNNMoney.com) — Personal bankruptcies topped the 1 million mark in the first nine months of the year, the first time it has done so in four years, according to an industry research firm released Friday.

The personal bankruptcies were up 35% from the same period in 2008, according to the report from the American Bankruptcy Institute (ABI).

http://money.cnn.com/2009/10/02/news/economy/consumer_bankruptcy/index.htm?section=money_latest

 

 How can you report that over 500,000 filed for 1st time unemployment benefits again - and claim that is good news – the 514,000 is the smallest number in how long – Gee, to me the story is we have had at least 500,000 file for 1st time benefits 12 consecutive months in a row. In October 2008, 533,000 filed first time claims, so 19,000 fewer have filed this October, but the total number of employed persons has dropped considerably, in other words the total pool of people who could potentially become unemployed is much smaller so that the number of people filing claims is a higher percent of the employed than it was a year ago.

I remember the reports from this time last year – “the worse economy of our lifetime” – when we had an unemployment rate of 6.5%.

“The number of employed Americans has declined by 1.2 million over the first 10 months of 2008, with half of the loss taking place since August.¹ The result is that the October national unemployment rate of 6.5 percent represents the highest level of unemployment since March 1994.^{“  http://www.prb.org/Articles/2008/employmentinstability.aspx?p=1}

 We have lost almost 3 times that many jobs in the 1st 10 months of this year. A total of nearly, 3.6 million jobs lost this year (2009).

 

By Hibah Yousuf, CNNMoney.com contributing writer

Last Updated: October 2, 2009: 5:13 PM ET

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