2008 Reccession means?

[pbrower2a]

The 2007-2008 downturn started out as like one of the two other nastiest and protracted recessions since 1950, but it got far worse in September 2008:



The duration has yet to match either the Oil Crisis of 1973 (20.7 months) or  the Tech Crash of 2000 (30.5 months), let alone the Great Meltdown of 1929-1933 (34.2 months); it has so far lasted 16 months. But it has gone suddenly in character from the comparatively from the comparatively tame bear markets to the severity of the 1929-1933 bear market at a similar stage. The huge decline in the DJIA in September 2008 reflected the recognition that much of what we Americans thought was wealth was illusion.

It also doomed the McCain/Palin campaign and probably a couple of Republican Senators to defeat.

It's hard to imagine any meltdown in America as severe as the 1929-1933 meltdown unless the United States were defeated in a major war or subjected to a nuclear exchange that destroys 70% of national wealth and a large part of the population. We have institutions to prevent a loss of 90% of the apparent valuation of stocks: bank deposit insurance, Social Security that ensures that the elderly will at least have disposable income,  Medicare that ensures a vibrant economy in medicine if nothing else, a welfare system (flawed as it is), and the recognition of the effectiveness of Keynesian stimulus as a response. Even so one must wonder how much of the wealth that we thought we had was created only on paper or stolen outright. Obama has tried to stop the decline before it reaches the destructive levels that it could. Does anyone expect a loss of nearly 89% of all commercial capital? We have lost about one half. 

We are down at least 53%, which is already more severer than the level of declines beginning in 1973 and 2000 -- and in a far shorter time. Nobody can predict when a bear market ends, and indeed many people had strong evidence that the worst of the 1929 Crash was over in November 1929.

As of February 27, 2009 the economic downturn that began in September 2007 is essentially indistinguishable (or the difference is "statistically insignificant") from that of 1929-1933 at the same time in the downturn. At at least two points, this downturn has been even more severe.

(I have one complaint about the graph: if I had my way it would be logarithmic.  The last five months of the 1929-1933 meltdown looks far flatter than it would in a logarithmic scale. Half the valuation of the stock market disappeared in four months,  which is a very sharp drop -- from about 22% to 11% of the 1929 level). 

[pbrower2a]

March 3... a new low, and this one is so close to the corresponding jagged sinking line (or is it the "jagged, sickening line"?)  of 1929-1933 that one can't tell whether it is higher or lower than the one for The Big Bear Market of shattered dreams and falling expectations -- and people with wrecked lives jumping out of tall buildings.

This time the windows of tall office buildings are sealed shut to prevent that. I just wonder how many hibachis are being purchased for one-time use, and not for cookouts.

The current bear market is catching up to one of those cruel upswings of the 1929-1933 meltdown, one of those that enticed people to believe that the worst was over, only to hit them with another downturn that wipes out even more assets. This one seems to have fooled nobody; there are no teases, so far, of a short-lived bull market.

Unless the bear market ends, or else we get one of those cruel teases, the blue line crosses the gray line.

 

[pbrower2a]

OK, I'll help break the tie.

510 day gap.

S&P 500:
Oct. 9 2007 close: 1,565.15
Mar. 2 2009 close: 700.82
Down 55.223461010126824904961185828834%

So the blue line (2007-??)  really did cross the gray line (1929-1933).

Not statistically significant, but still quite dreadful.


George W. Bush: Herbert Hoover without a moral compass.



Dow:
Sep. 3 1929 close: 381.17
Jan. 26 1931 close: 171.19
Down 55.088280819581813888816013852087%

[pbrower2a]

A more Liberitarian society, or a more Populist one?
I would say Populist, as we have had 28 years of Reganomics(even Clinton used them a little), and now we are having major problems and it looks like our government will finally increase programs to counter Reccession.

You are right, but why not... a more liberal society ? More welfare state and more social freedom, that's not necessarily incompatible.

Yeah, factories are closing, prices are going up, and the stock market is plummeting, so let's all have gay orgies in the street.

Get your head out of your ass, Antonio.

How old are you, Vander?

Irrelevant.  I just think it's stupid to assume that because the economy goes into a depression, that the U.S. is going to become more socially liberal.

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Huh? Jacobin bands do not form in healthy societies.

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No, the welfare state does not stifle entrepreneurship. It creates business activity that otherwise would not exist. It ensures that medical care is available in places in which it would otherwise be futile. Motivation? The acquisitive instinct never dies where it isn't suppressed with terror, as in the Soviet Union in which people got Marxist/Leninist/Stalinist homilies instead of those of the feudal order that remained intact in Russia until 1917. "Suffer for your landlords and your bosses so that you may get rewards in Heaven" became "Make sacrifices on behalf of Socialism".

Like many rightists you confuse Soviet-style "socialism" (a very nasty system) with the other repudiation of unbridled capitalism, social democracy.   

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Someone 35 living with his parents could be

(1) an incompetent. That's true everywhere.

(2) someone with responsibilities for  caring for crippled or diseased parents.

(3) someone who lives where housing is priced into the stratosphere and pay for ordinary work -- and most people do ordinary labor -- is itself ordinary.

(4) someone who expects to inherit the family business or store.

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Irreligion may reflect the emptiness of the predominant religion, or the fact that people have outgrown its rituals. Promiscuity? Blame the prophylactics if you wish. Abortion? The people who have abortions often come from places where sexuality is a taboo subject in life in what I figure is a moral world in collapse.

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Not quite. The real primitives in society live reptilian lives. They have few bonds to others and gravitate to the crudest pleasures -- acquisitiveness, gluttony, lust, power, and cheap thrills (including drugs).

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Enlightenment implies a rejection of the primitive.

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No. History already discredits the people who did well by treating others badly.