BLACK THURSDAY REMEMBERED Weekend Economists October 22-24, 2010

[Demeter]

It was 81 years ago Sunday when the bottom fell out of the US economy. The DOW JONES Industrials crashed, thunderously, in a spasm that would circle the globe.

From PBS, a series of videos on the decade:

http://www.pbs.org/wgbh/americanexperience/films/crash/

"By 1929, Charles Mitchell, President of the National City Bank (which would become Citibank), had popularized the idea of selling stock and high yield bonds directly to smaller investors. Mitchell and a very small group of bankers, brokers, and speculators manipulated the stock market, grew wealthy and helped create the economic boom of that fabulous decade. Their successes made them folk heroes of the day. The Crash of 1929 chronicles a fateful year through the words and experiences of the descendants of these titans of finance.

In 1929, while the market was rising, seemingly without limits, there were few critics. Based on eight years of continued prosperity, presidents and economists alike confidently predicted that America would soon enter a time when there would be no more poverty, no more depressions — a “New Era” when everyone could be rich.

Instead it was the rich who became richer. Jesse Livermore, a Wall Street insider, drove around town in one of six yellow Rolls Royces. His daughter-in-law describes his two yachts, private railway car and five homes, including an apartment on Fifth Avenue he bought to have a place where he could change clothes for the theater.

Michael Meehan was the stock specialist who manipulated the glamour stock of the day, RCA, from $2.50 a share up to a peak of over $500 a share, making millions for the few who were in on the deal. William Durant, founder of General Motors, was called “King of the Bulls.” In October of 1929, he would lose millions in a desperate, single-handed effort to stop the stock market crash.

Before the crash, the success of these men convinced small investors that the stock market was a sure thing, that Wall Street was the smart place to put one’s money. The film features the recollections of people whose families experienced the crash. Groucho Marx’s son, Arthur, remembers how his famous father detested gambling, yet put his entire life savings in stocks.

The Crash of 1929 captures the unbounded optimism of the age, a time when the stock market epitomized the false promise of permanent prosperity."

It was a time that will live in infamy--and a pattern upon which the fraudsters have shaped our present time. May we be smarter, and shorten the time lost and the pain endured by people without the cushion of the fraudsters.

[Demeter]

1. 3 BANKS ALREADY DOWN

First Bank of Jacksonville, Jacksonville, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Ameris Bank, Moultrie, Georgia, to assume all of the deposits of First Bank of Jacksonville.

The sole branch of First Bank of Jacksonville will reopen on Monday as a branch of Ameris Bank...As of June 30, 2010, First Bank of Jacksonville had approximately $81.0 million in total assets and $77.3 million in total deposits. Ameris Bank did not pay the FDIC a premium for the deposits of First Bank of Jacksonville. In addition to assuming all of the deposits, Ameris Bank agreed to purchase essentially all of the failed bank's assets.

The FDIC and Ameris Bank entered into a loss-share transaction on $60.0 million of First Bank of Jacksonville's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $16.2 million. Compared to other alternatives, Ameris Bank's acquisition was the least costly resolution for the FDIC's DIF. First Bank of Jacksonville is the 133rd FDIC-insured institution to fail in the nation this year, and the 26th in Florida. The last FDIC-insured institution closed in the state was Wakulla Bank, Crawfordville, on October 1, 2010.

Progress Bank of Florida, Tampa, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bay Cities Bank, Tampa, Florida, to assume all of the deposits of Progress Bank of Florida.

The two branches of Progress Bank of Florida will reopen on Monday as branches of Bay Cities Bank...As of June 30, 2010, Progress Bank of Florida had approximately $110.7 million in total assets and $101.3 million in total deposits. Bay Cities Bank did not pay the FDIC a premium for the deposits of Progress Bank of Florida. In addition to assuming all of the deposits, Bay Cities Bank agreed to purchase essentially all of the failed bank's assets.

The FDIC and Bay Cities Bank entered into a loss-share transaction on $82.6 million of Progress Bank of Florida's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $25.0 million. Compared to other alternatives, Bay Cities Bank's acquisition was the least costly resolution for the FDIC's DIF. Progress Bank of Florida is the 134th FDIC-insured institution to fail in the nation this year, and the 27th in Florida. The last FDIC-insured institution closed in the state was First Bank of Jacksonville, Jacksonville, earlier today.

The Gordon Bank, Gordon, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Morris Bank, Dublin, Georgia, to assume all of the deposits of The Gordon Bank.

The sole branch of The Gordon Bank will reopen on Monday as a branch of Morris Bank...As of June 30, 2010, The Gordon Bank had approximately $29.4 million in total assets and $26.7 million in total deposits. Morris Bank paid the FDIC a premium of 0.05 percent for the deposits of The Gordon Bank. In addition, Morris Bank will purchase approximately $11.5 million of The Gordon Bank's assets, consisting of cash and cash equivalents. The FDIC will retain the remaining assets for later disposition...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $9.0 million. Compared to other alternatives, Morris Bank's acquisition was the least costly resolution for the FDIC's DIF. The Gordon Bank is the 135th FDIC-insured institution to fail in the nation this year, and the 15th in Georgia. The last FDIC-insured institution closed in the state was The Peoples Bank, Winder, on September 17, 2010.

I WONDER IF SHEILA IS SERVING CHAMPAGNE?

[jotsy]

5. Add another in Georgia

First National Bank of Barnesville, Barnesville Georgia.

I'm surprised there are banks left here to go down.

[Demeter]

8. AND 4 MORE MAKES A TOTAL OF SEVEN FOR THE NIGHT

The First National Bank of Barnesville, Barnesville, Georgia, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with United Bank, Zebulon, Georgia, to assume all of the deposits of The First National Bank of Barnesville.

The two branches of The First National Bank of Barnesville will reopen on Saturday as branches of United Bank...As of June 30, 2010, The First National Bank of Barnesville had approximately $131.4 million in total assets and $127.1 million in total deposits. United Bank did not pay the FDIC a premium for the deposits of The First National Bank of Barnesville. In addition to assuming all of the deposits, United Bank agreed to purchase essentially all of the failed bank's assets.

The FDIC and United Bank entered into a loss-share transaction on $107.3 million of The First National Bank of Barnesville's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $33.9 million. Compared to other alternatives, United Bank's acquisition was the least costly resolution for the FDIC's DIF. The First National Bank of Barnesville is the 136th FDIC-insured institution to fail in the nation this year, and the 16th in Georgia. The last FDIC-insured institution closed in the state was The Gordon Bank, Gordon, earlier today.

First Suburban National Bank, Maywood, Illinois, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Seaway Bank and Trust Company, Chicago, Illinois, to assume all of the deposits of First Suburban National Bank.

The four branches of First Suburban National Bank will reopen on Saturday as branches of Seaway Bank and Trust Company...As of June 30, 2010, First Suburban National Bank had approximately $148.7 million in total assets and $140.0 million in total deposits. Seaway Bank and Trust Company did not pay the FDIC a premium for the deposits of First Suburban National Bank. In addition to assuming all of the deposits, Seaway Bank and Trust Company agreed to purchase essentially all of the failed bank's assets.

The FDIC and Seaway Bank and Trust Company entered into a loss-share transaction on $116.6 million of First Suburban National Bank's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $31.4 million. Compared to other alternatives, Seaway Bank and Trust Company's acquisition was the least costly resolution for the FDIC's DIF. First Suburban National Bank is the 137th FDIC-insured institution to fail in the nation this year, and the 16th in Illinois. The last FDIC-insured institution closed in the state was ShoreBank, Chicago, on August, 20, 2010.

Hillcrest Bank, Overland Park, Kansas, was closed today by the Kansas Office of the State Bank Commissioner, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Hillcrest Bank, National Association, Overland Park, Kansas, a newly-chartered bank subsidiary of NBH Holdings Corp., Boston, Massachusetts, to assume all of the deposits of Hillcrest Bank.

The 41 branches of Hillcrest Bank will reopen during normal business hours beginning Saturday as branches of Hillcrest Bank, N.A...As of June 30, 2010, Hillcrest Bank had approximately $1.65 billion in total assets and $1.54 billion in total deposits. Hillcrest Bank, N.A. did not pay the FDIC a premium for the deposits of Hillcrest Bank. In addition to assuming all of the deposits of the failed bank, Hillcrest Bank, N.A. agreed to purchase essentially all of the assets.

The FDIC and Hillcrest Bank, N.A. entered into a loss-share transaction on $1.15 billion of Hillcrest Bank's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $329.7 million. Compared to other alternatives, Hillcrest Bank, N.A.'s acquisition was the least costly resolution for the FDIC's DIF. Hillcrest Bank is the 138th FDIC-insured institution to fail in the nation this year, and the third in Kansas. The last FDIC-insured institution closed in the state was Security Savings Bank, F.S.B, on October 15, 2010.

The Federal Deposit Insurance Corporation (FDIC) approved the payout of the insured deposits of First Arizona Savings, A FSB, Scottsdale, Arizona. The bank was closed today by the Office of Thrift Supervision, which appointed the FDIC as receiver.

The FDIC was unable to find another financial institution to take over the banking operations of First Arizona Savings, A FSB. As a result, checks to depositors for their insured funds will be mailed on Monday, October 25...
As of June 30, 2010, First Arizona Savings, A FSB had approximately $272.2 million in total assets and $198.8 million in total deposits. At the time of closing, the bank had an estimated $5.8 million in uninsured funds. This amount is an estimate that is likely to change once the FDIC obtains additional information from the bank's customers...

The FDIC estimates the cost of the failure to its Deposit Insurance Fund to be approximately $32.8 million. First Arizona Savings, A FSB is the 139th FDIC-insured institution to fail this year, and the third in Arizona. The last institution closed in the state was Towne Bank of Arizona, Mesa, on May 7, 2010.

A BIG ONE IN KANSAS, AND ONE IN ARIZONA SO CRIPPLED, NOBODY WANTED IT.....

[Demeter]

9. MINIMUM COST FOR THE NIGHT: $415.2 MILLION.

[Demeter]

2. EUROPA

American Economic Policy with Europe

As businesses began failing, the government created the Smoot-Hawley Tariff in 1930 to help protect American companies. This charged a high tax for imports thereby leading to less trade between America and foreign countries along with some economic retaliation...

The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s.<1> It was the longest, most widespread, and deepest depression of the 20th century...

The Great Depression had devastating effects in virtually every country, rich and poor. Personal income, tax revenue, profits and prices dropped while international trade plunged by ½ to ⅔. Unemployment in the U.S. rose to 25%, and in some countries rose as high as 33%.

http://en.wikipedia.org/wiki/Great_Depression

[Demeter]

3. FRANCE

The Depression began to affect France around 1931. France's relatively high degree of self-sufficiency meant the damage was considerably less than in nations like Germany. However, hardship and unemployment were high enough to lead to rioting and the rise of the socialist Popular Front....

The Great Depression affected France from about 1931 through the remainder of the decade. The depression had drastic effects on the local economy, which can partly explain the 6 February 1934 crisis and even more the formation of the Popular Front, led by SFIO socialist leader Léon Blum, who won the election of 1936.

Economic crisis of the 1920s

Like the United Kingdom, France had initially struggled to recover from the devastation of World War I, trying without much success to recover war reparations from Germany. Unlike Britain, though, France had a more self-sufficient economy. In 1929, France seemed an island of prosperity, for three reasons. First, it was a country traditionally wary of trusts and big companies. The economy of France was above all founded in small and medium-sized businesses not financed by shares. Unlike the Anglosphere and particularly Americans, the French invested little on the stock exchange and put their confidence into gold, which in the crisis of 1929 was a currency of refuge. Gold had played the same role in the first world war, which explained French attachment to it. Finally, France had had a positive balance of payments<1> for some years thanks mainly to invisible exports such as tourism. French investments abroad were numerous.

The German reparations decided by the Treaty of Versailles in 1919 brought in large amounts of money which served principally to repay war loans to the United States <2>. Reparations payments ended in 1923. In January of that year, Germany defaulted on its payments and the French president, Raymond Poincaré, invoked a clause of the Versailles Treaty and sent troops to occupy the Ruhr valley in the hope of enforcing payment. Germany responded by flooding the area with inflated money, ruining its currency and denying France any hope of full reparations. Poincaré accepted an agreement mediated by the United States in which it received smaller payments, but Poincaré's government fell soon afterward.

While the United States experienced a sharp rise in unemployment, France had almost none. Much of that was due to a simple lack of manpower; at the end of the war, France had 1,322,000 dead and three million wounded. One in four of the dead was younger than 24. That in turn lowered the birth rate, so that by 1938 France still had only half the number of 19-to-21 year-olds it would have had had the war not happened....

http://en.wikipedia.org/wiki/Great_Depression_in_France

[Demeter]

4. French Senate passes pension bill

http://www.bbc.co.uk/news/world-europe-11610601

The French Senate has passed a controversial pension reform bill, which has caused a series of strikes and protests around France.

The senators approved President Nicolas Sarkozy's plan to raise the retirement age from 60 to 62, and it could become law as early as next week.

Mr Sarkozy says the measure is necessary to reduce the deficit.

But hundreds of thousands have protested against what they see as an attack on their rights.

Senators passed the motion to raise the retirement age by 177 votes to 153, after the government used a special measure known as a guillotine to cut short the debate on the bill...

[MattSh]

10. Some readers responses to a NY TImes article.

Funny, you don't hear about these things in the M$M, do you?

http://community.nytimes.com/comments/www.nytimes.com/2010/10/22/world/europe/22france.html?sort=recommended

…

To be clear, the increase from 60 to 62 is the minimum possible retirement age, one that is extremely rarely taken in France, also because one does not earn full pension at the minimum (far from it), nor is one eligible if one changed jobs, had children, etc. More commonly the French population retires in their late 60s. This fight, while about the minimum retirement age, is truly more about a government set on removing social services, eroding What the French see as fundamental parts of their culture and society, and the out of touch nature of this administration to the population at large.

…

The reporting of these strikes by the US press is so distorted that it is embarrassing. My father is there, right now, and anyone actually reporting on these strikes can tell you that "pensions" aren't even the top issue. That would be the recent "free trade" agreement signed by he French government with South Korea. French workers, and workers all across the EU, are furious about "free trade", but especially with China, India, South Korea, Vietnam, and the other Asian economies. They aren't any different than their US counterparts in that regard. The difference is that French workers are actually doing something about it. Unless Congress ends the free trade Ponzi schemes they foisted off on this country, the riots and protests here will make what is taking place in France look tame.

…

In France, as in the U.S., there is plenty of wealth to support retirement at a reasonable age. (In France that age is defined by 41 years of pension withholdings, which for most people is closer to 65 than 60, a fact even the Times editors seem to ignore.) But the real issue in France, as here, is: will the cost of fiscal deficits and other adjustments be borne by the wealthy, whose wealth has increased immensely in recent years, or by ordinary people, hard-pressed as they are by stagnant wages, unemployment, and reduced social supports? In France the unions and the students and lots of others are saying 'No' to Sarkozy's efforts to balance the accounts on their backs--and they are saying it clearly, in the language of street protest, which is their national genius. I only wish we Americans felt the same urgency and empowerment.

...

[DemReadingDU]

12. you don't hear about these things in the M$M. no

That's why we have the Internets
:)



It's sad that most of the news on M$M is fluff and insignificant to what is really happening.

[fasttense]

11. Really they used the word Guillotine?

"After the government used a special measure known as a guillotine to cut short the debate on the bill."

If I were in the French government, I would avoid all references to the guillotine. Other reference to avoid "Storm the Bastille", "Let them eat cake", and "Off with their heads". Not a good time in France to be making reference to the last revolution.

[Demeter]

28. French unions urge more strikes

Union representatives said on Thursday they would hold further demonstrations on October 28 and November 6. The decision means France faces at least two more weeks of disruption and political tension

Read more >>
http://link.ft.com/r/P75VYY/PRAFBU/6ADGM/BMUQFP/D4RDI8/T3/t?a1=2010&a2=10&a3=22

[jotsy]

6. Every bit the witch's brew then it is today.

Cooked to follow a recipe as destitution isn't like revenge, it ain't served cold, it just ain't served at all.

Rec'd.

[UpInArms]

7. TIMELINES OF THE GREAT DEPRESSION

http://www.huppi.com/kangaroo/Timeline.htm

This page features two timelines: the first for general events of the Roaring 20s and the Great Depression, the second for leading economic indicators.

The importance of these timelines cannot be emphasized enough. Seeing the order in which events actually occurred dispels many myths about the Great Depression. One of the greatest of these myths is that government intervention was responsible for its onset. Truly massive intervention began only under the presidency of Franklin Roosevelt in 1933, who was sworn in after the worst had already hit. Although his New Deal did not cure it, all the leading economic indicators improved on his watch.

But don't take my word for it -- here is the raw data:

TIMELINE OF GENERAL EVENTS

1920s (Decade)
During World War I, federal spending grows three times larger than tax collections. When the government cuts back spending to balance the budget in 1920, a severe recession results. However, the war economy invested heavily in the manufacturing sector, and the next decade will see an explosion of productivity... although only for certain sectors of the economy.
An average of 600 banks fail each year.
Agricultural, energy and coal mining sectors are continually depressed. Textiles, shoes, shipbuilding and railroads continually decline.
The value of farmland falls 30 to 40 percent between 1920 and 1929.
Organized labor declines throughout the decade. The United Mine Workers Union will see its membership fall from 500,000 in 1920 to 75,000 in 1928. The American Federation of Labor would fall from 5.1 million in 1920 to 3.4 million in 1929.
"Technological unemployment" enters the nation's vocabulary; as many as 200,000 workers a year are replaced by automatic or semi-automatic machinery.
Over the decade, about 1,200 mergers will swallow up more than 6,000 previously independent companies; by 1929, only 200 corporations will control over half of all American industry.
By the end of the decade, the bottom 80 percent of all income-earners will be removed from the tax rolls completely. Taxes on the rich will fall throughout the decade.
By 1929, the richest 1 percent will own 40 percent of the nation's wealth. The bottom 93 percent will have experienced a 4 percent drop in real disposable per-capita income between 1923 and 1929.
The middle class comprises only 15 to 20 percent of all Americans.
Individual worker productivity rises an astonishing 43 percent from 1919 to 1929. But the rewards are being funneled to the top: the number of people reporting half-million dollar incomes grows from 156 to 1,489 between 1920 and 1929, a phenomenal rise compared to other decades. But that is still less than 1 percent of all income-earners.
1922
The conservative Supreme Court strikes down federal child labor legislation.
1923
President Warren Harding dies in office; his administration was easily one of the most corrupt in American history. Calvin Coolidge, who is squeaky clean by comparison, becomes president. Coolidge is no less committed to laissez-faire and a non-interventionist government. He announces to the American people: "The business of America is business."
Supreme Court nullifies minimum wage for women in District of Columbia.
1924
The Ku Klux Klan reaches the height of its influence in America: by the end of the year it will claim 9 million members. It will decline drastically in 1925, however, after financial and moral scandals rock its leadership.
The stock market begins its spectacular rise. Bears little relation to the rest of the economy.
1925
The top tax rate is lowered to 25 percent - the lowest top rate in the eight decades since World War I.
Supreme Court rules that trade organizations do not violate anti-trust laws as long as some competition survives.
1928
The construction boom is over.
Farmers' share of the national income has dropped from 15 to 9 percent since 1920.
Between May 1928 and September 1929, the average prices of stocks will rise 40 percent. Trading will mushroom from 2-3 million shares per day to over 5 million. The boom is largely artificial.
1929
Herbert Hoover becomes President. Hoover is a staunch individualist but not as committed to laissez-faire ideology as Coolidge.
More than half of all Americans are living below a minimum subsistence level.
Annual per-capita income is $750; for farm people, it is only $273.
Backlog of business inventories grows three times larger than the year before. Public consumption markedly down.
Freight carloads and manufacturing fall.
Automobile sales decline by a third in the nine months before the crash.
Construction down $2 billion since 1926.
Recession begins in August, two months before the stock market crash. During this two month period, production will decline at an annual rate of 20 percent, wholesale prices at 7.5 percent, and personal income at 5 percent.
Stock market crash begins October 24. Investors call October 29 "Black Tuesday." Losses for the month will total $16 billion, an astronomical sum in those days.
Congress passes Agricultural Marketing Act to support farmers until they can get back on their feet.
1930
By February, the Federal Reserve has cut the prime interest rate from 6 to 4 percent. Expands the money supply with a major purchase of U.S. securities. However, for the next year and a half, the Fed will add very little money to the shrinking economy. (At no time will it actually pull money out of the system.) Treasury Secretary Andrew Mellon announces that the Fed will stand by as the market works itself out: "Liquidate labor, liquidate stocks, liquidate real estate… values will be adjusted, and enterprising people will pick up the wreck from less-competent people." (More)
The Smoot-Hawley Tariff passes on June 17. With imports forming only 6 percent of the GNP, the 40 percent tariffs work out to an effective tax of only 2.4 percent per citizen. Even this is compensated for by the fact that American businesses are no longer investing in Europe, but keeping their money stateside. The consensus of modern economists is that the tariff made only a minor contribution to the Great Depression in the U.S., but a major one in Europe. (More)
The first bank panic occurs later this year; a public run on banks results in a wave of bankruptcies. Bank failures and deposit losses are responsible for the contracting money supply.
Supreme Court rules that the monopoly U.S. Steel does not violate anti-trust laws as long as competition exists, no matter how negligible.
Democrats gain in Congressional elections, but still do not have a majority.
The GNP falls 9.4 percent from the year before. The unemployment rate climbs from 3.2 to 8.7 percent.
1931
No major legislation is passed addressing the Depression.
A second banking panic occurs in the spring.
The GNP falls another 8.5 percent; unemployment rises to 15.9 percent.
1932
This and the next year are the worst years of the Great Depression. For 1932, GNP falls a record 13.4 percent; unemployment rises to 23.6 percent.
Industrial stocks have lost 80 percent of their value since 1930.
10,000 banks have failed since 1929, or 40 percent of the 1929 total.
About $2 billion in deposits have been lost since 1929.
Money supply has contracted 31 percent since 1929.
GNP has also fallen 31 percent since 1929.
Over 13 million Americans have lost their jobs since 1929.
Capital growth investments have dropped from $16.2 billion to 1/3 of one billion since 1929.
Farm prices have fallen 53 percent since 1929.
International trade has fallen by two-thirds since 1929.
The Fed makes its first major expansion of the money supply since February 1930.
Congress creates the Reconstruction Finance Corporation. (More)
Congress passes the Federal Home Loan Bank Act and the Glass-Steagall Act of 1932. (More)
Top tax rate is raised from 25 to 63 percent.
Popular opinion considers Hoover's measures too little too late. Franklin Roosevelt easily defeats Hoover in the fall election. Democrats win control of Congress.
At his Democratic presidential nomination, Roosevelt says: "I pledge you, I pledge myself, to a new deal for the American people."
1933
Roosevelt inaugurated; begins "First 100 Days" of intensive legislative activity. (More)
A third banking panic occurs in March. Roosevelt declares a Bank Holiday; closes financial institutions to stop a run on banks.
Alarmed by Roosevelt's plan to redistribute wealth from the rich to the poor, a group of millionaire businessmen, led by the Du Pont and J.P. Morgan empires, plans to overthrow Roosevelt with a military coup and install a fascist government. The businessmen try to recruit General Smedley Butler, promising him an army of 500,000, unlimited financial backing and generous media spin control. The plot is foiled when Butler reports it to Congress. (More)
Congress authorizes creation of the Agricultural Adjustment Administration, the Civilian Conservation Corps, the Farm Credit Administration, the Federal Deposit Insurance Corporation, the Federal Emergency Relief Administration, the National Recovery Administration, the Public Works Administration and the Tennessee Valley Authority. (More)
Congress passes the Emergency Banking Bill, the Glass-Steagall Act of 1933, the Farm Credit Act, the National Industrial Recovery Act and the Truth-in-Securities Act. (More)
U.S. goes off the gold standard.
Roosevelt does much to redistribute wealth from the rich to the poor, but is obsessed with a balanced budget. He later rejects Keynes' advice to begin heavy deficit spending.
The free fall of the GNP is significantly slowed; it dips only 2.1 percent this year. Unemployment rises slightly, to 24.9 percent.
1934
Congress authorizes creation of the Federal Communications Commission, the National Mediation Board and the Securities and Exchange Commission. (More)
Congress passes the Securities and Exchange Act and the Trade Agreement Act. (More)
The economy turns around: GNP rises 7.7 percent, and unemployment falls to 21.7 percent. A long road to recovery begins.
Sweden becomes the first nation to recover fully from the Great Depression. It has followed a policy of Keynesian deficit spending. (More)
1935
The Supreme Court declares the National Recovery Administration to be unconstitutional.
Congress authorizes creation of the Works Progress Administration, the National Labor Relations Board and the Rural Electrification Administration. (More)
Congress passes the Banking Act of 1935, the Emergency Relief Appropriation Act, the National Labor Relations Act, and the Social Security Act. (More)
Economic recovery continues: the GNP grows another 8.1 percent, and unemployment falls to 20.1 percent.
1936
The Supreme Court declares part of the Agricultural Adjustment Act to be unconstitutional.
In response, Congress passes the Soil Conservation and Domestic Allotment Act. (More)
Top tax rate raised to 79 percent.
Economic recovery continues: GNP grows a record 14.1 percent; unemployment falls to 16.9 percent.
Germany becomes the second nation to recover fully from the Great Depression, through heavy deficit spending in preparation for war.
1937
The Supreme Court declares the National Labor Relations Board to be unconstitutional.
Roosevelt seeks to enlarge and therefore liberalize the Supreme Court. This attempt not only fails, but outrages the public.
Economists attribute economic growth so far to heavy government spending that is somewhat deficit. Roosevelt, however, fears an unbalanced budget and cuts spending for 1937. That summer, the nation plunges into another recession. Despite this, the yearly GNP rises 5.0 percent, and unemployment falls to 14.3 percent.
1938
Congress passes the Agricultural Adjustment Act of 1938 and the Fair Labor Standards Act. (More)
No major New Deal legislation is passed after this date, due to Roosevelt's weakened political power.
The year-long recession makes itself felt: the GNP falls 4.5 percent, and unemployment rises to 19.0 percent.
Britain becomes the third nation to recover as it begins deficit spending in preparation for war.
1939
GNP rises 7.9 percent; unemployment falls to 17.2 percent.
The United States will begin emerging from the Depression as it borrows and spends $1 billion to build its armed forces. From 1939 to 1941, when the Japanese attack Pearl Harbor, U.S. manufacturing will have shot up a phenomenal 50 percent!
The Depression is ending worldwide as nations prepare for the coming hostilities.
World War II starts with Hitler's invasion of Poland.
1945
Although the war is the largest tragedy in human history, the United States emerges as the world's only economic superpower. Deficit spending has resulted in a national debt 123 percent the size of the GDP. By contrast, in 1994, the $4.7 trillion national debt will be only 70 percent of the GDP!
The top tax rate is 91 percent. It will stay at least 88 percent until 1963, when it is lowered to 70 percent. During this time, America will experience the greatest economic boom it has ever known.
ECONOMIC TIMELINE

The following timeline shows the order of economic events during the Great Depression. Notice the effect that deficit spending had on economic growth:

Receipts: Tax receipts as a percentage of the Gross Domestic Product

Spending: Federal spending as a percentage of the Gross Domestic Product

..more...

[DemReadingDU]

13. Great Depression Quotes 1929 vs 2008

A few select quotes during the depression years of 1929 to 1931.

Notice the “Expert” opinions which convey optimism, the bank bailouts, government assurances, the Hoover (Paulson) plan, and the deliberate attempt by the main stream media to manufacture consent for bailing out Wall St. Has anything changed?

“There is no cause to worry. The high tide of prosperity will continue”
- Andrew W. Mellon, Secretary of the Treasury. September 1929

Stock Prices Will Stay at High Level For Years to Come, Says Ohio Economist .
-Dr. Charles Amos Dice, professor of business organization at Ohio State October 13, 1929

“FISHER SEES STOCKS PERMANENTLY HIGH”
-Irving Fisher, Yale economist, October 16h, 1929

“BROKERS IN MEETING PREDICT RECOVERY; Partners in 35 Wire Houses at Conference Agree Selling Has Been Overdone.” October 25, 1929

NEW AID IS PLEDGED TO BANK COALITION; G.F. Baker Jr. Joins Parley at Morgan Offices and Many Other Offers Are Made. SUPPORT EASES ANXIETY
-October 26, 1929

Brokers Believe Worst Is Over and Recommend Buying of Real Bargains
– New York Herald Tribune, October 27, 1929
October 29, 1929 – Stock Market Crashes!

more...
http://www.chartingstocks.net/2009/02/great-depression-quotes-1929-vs-2008-have-we-learned-anything/

[hamerfan]

29. Thanks, DRDU!

For the link to the quotes. It seems "The People" have not learned a damn thing from history.
hamerfan

[DemReadingDU]

14. Newspaper Headlines from 1930s

Below are images of headlines, stories, and political cartoons published in the Joliet Herald-News during the first years of the depression that illustrate the problems faced by people in Joliet and around the nation as a result of the Great Depression, and the responses to those problems by the people and government of Joliet, and the Illinois and U.S. governments.

In the early years of the Great Depression, many economists and businessmen believed that the depression was a mild one , and that prosperity was "just around the corner".


click to see the newspaper headlines
http://www.jolietpubliclibrary.org/Digitization%20Projects/The%201930s/Depression.htm

[DemReadingDU]

15. 1927-1933 Chart of Pompous Prognosticators

1. "We will not have any more crashes in our time."
- John Maynard Keynes in 1927

2. "I cannot help but raise a dissenting voice to statements that we are living in a fool's paradise, and that prosperity in this country must necessarily diminish and recede in the near future."
- E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928

"There will be no interruption of our permanent prosperity."
- Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928

3. "No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment...and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding."
- Calvin Coolidge December 4, 1928

4. "There may be a recession in stock prices, but not anything in the nature of a crash."
- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929

5. "Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months."
- Irving Fisher, Ph.D. in economics, Oct. 17, 1929

"This crash is not going to have much effect on business."
- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929

"There will be no repetition of the break of yesterday... I have no fear of another comparable decline."
- Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929

"We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices."
- Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929

6. "This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

"Buying of sound, seasoned issues now will not be regretted"
- E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929

"Some pretty intelligent people are now buying stocks... Unless we are to have a panic -- which no one seriously believes, stocks have hit bottom."
- R. W. McNeal, financial analyst in October 1929

7. "The decline is in paper values, not in tangible goods and services...America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin."
- Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929

"Hysteria has now disappeared from Wall Street."
- The Times of London, November 2, 1929

"The Wall Street crash doesn't mean that there will be any general or serious business depression... For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game... Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before."
- Business Week, November 2, 1929

"...despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation..."
- Harvard Economic Society (HES), November 2, 1929

8. "... a serious depression seems improbable; recovery of business next spring, with further improvement in the fall."
- HES, November 10, 1929
"The end of the decline of the Stock Market will probably not be long, only a few more days at most."
- Irving Fisher, Professor of Economics at Yale University, November 14, 1929

"In most of the cities and towns of this country, this Wall Street panic will have no effect."
- Paul Block (President of the Block newspaper chain), editorial, November 15, 1929

"Financial storm definitely passed."
- Bernard Baruch, cablegram to Winston Churchill, November 15, 1929

9. "I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress."
- Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929

"I am convinced that through these measures we have reestablished confidence."
- Herbert Hoover, December 1929

"<1930 will be> a splendid employment year."
- U.S. Dept. of Labor, New Year's Forecast, December 1929

10. "For the immediate future, at least, the outlook (stocks) is bright."
- Irving Fisher, Ph.D. in Economics, in early 1930

11. "...there are indications that the severest phase of the recession is over..."
- Harvard Economic Society (HES) Jan 18, 1930

12. "There is nothing in the situation to be disturbed about."
- Secretary of the Treasury Andrew Mellon, Feb 1930

13. "The spring of 1930 marks the end of a period of grave concern...American business is steadily coming back to a normal level of prosperity."
- Julius Barnes, head of Hoover's National Business Survey Conference, Mar 16, 1930

14. "... the outlook continues favorable..."
- HES Mar 29, 1930

"... the outlook is favorable..."
- HES Apr 19, 1930

15. "While the crash only took place six months ago, I am convinced we have now passed through the worst -- and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us."
- Herbert Hoover, President of the United States, May 1, 1930

"...by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent..."
- HES May 17, 1930

"Gentleman, you have come sixty days too late. The depression is over."
- Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930

16. "... irregular and conflicting movements of business should soon give way to a sustained recovery..."
- HES June 28, 1930

17. "... the present depression has about spent its force..."
- HES, Aug 30, 1930

18. "We are now near the end of the declining phase of the depression."
- HES Nov 15, 1930

19. "Stabilization at levels is clearly possible."
- HES Oct 31, 1931

20. "All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S."
- President F.D. Roosevelt, 1933
Colin J. Seymour, June 2001

http://www.gold-eagle.com/editorials_01/seymour062001.html

[Demeter]

16. More Action in America from the Network of Billionaires

http://www.prwatch.org/node/9537

In the Center for Media and Democracy's break-through article on the American Action Network, we highlighted the resumes of the billionaires, corporate executives, and right-wing political operatives behind the group. Americans have a right to know more about who these guys really are, starting with AAN board member Robert Steel... The Washington, D.C.-based group, a 501(c) organization that receives anonymous corporate funding, has already spent $750,000 attacking Senator Feingold in television ads. Now, AAN is at it again, airing another misleading attack ad...

AAN board member Robert Steel demonstrates this group's level of sleaze. Steel was Vice Chairman of Goldman Sachs for 30 years, where he profited from the kind of gambling that crashed our economy (although he bailed out before the crash). He left Sachs to help Henry Paulson mismanage the then-looming financial crisis at the U.S. Treasury Department, heading next to Wachovia Bank, where his Treasury connections no doubt helped ease its merger with Wells Fargo, which then accepted $25 billion in taxpayer-funded TARP dollars as part of consuming Steel's toxic Wachovia corporation.

The Revolving Door

After 30 years at Goldman Sachs, Steel followed fellow Sachs-alumni Henry Paulson to George W. Bush's Treasury Department, being appointed Under Secretary for Domestic Finance. Just before joining Treasury, Steel also served as co-chair of the U.S. Chamber of Commerce's "Committee on Capital Market Regulations," the powerful corporate-funded lobbying group's anti-regulatory crusade group. Paulson and Steel were old friends, and had a "Batman-and-Robin-like relationship," according to the Washington Post. Steel worked in Treasury from 2006 to 2008, then bailed just as the economy collapsed due to his and Paulson’s under-regulation of banks and corporations.

Steel worked on a variety of major projects at Treasury, including the bailout of Bear Stearns. When Wachovia picked Steel as their CEO, many on the inside were amazed. It was rather shameless that, in the midst of a financial crisis, a bank would select as CEO the government’s bailout negotiator. But, it just shows the revolving door between government and Wall Street (which leads to the policy failures affecting America's Main Streets).

Steel's Jaw-Dropping Priorities

Soon after Steel took the helm, Wachovia appeared ready to collapse. The bank began freezing customer’s assets, including those of schools, and refusing credit to small businesses. However, in the midst of this apparent crisis, Wachovia still found it feasible to extend an $8 million loan to the National Republican Congressional Committee to help Republican candidates in the final weeks of the 2008 elections (despite the fact that the NRCC had not proven to be a reliable creditor in the past).

The story gets worse. By September, Wachovia was so close to failure that the U.S. government’s Federal Deposit Insurance Corporation (FDIC) intervened to negotiate a Wachovia buyout. After a week of negotiations during which time the government extended Wachovia a line of credit to keep it alive, Citigroup was prepared to purchase Wachovia at the rock-bottom price of $1 per share, after Wells Fargo had rejected the chance to purchase the firm. Steel had recently purchased one million shares of Wachovia in a ploy to show his commitment to the company, so a sale at such a low purchase price would have really hurt his pocketbook.

The Citibank-Wachovia deal at $1 per share was sealed, as far as Citi was concerned. USA Today ran a full-page ad heralding “a new partnership” between the two banks. Similar ads ran in regional newspapers, and discussions about detailed human resource issues and other logistics had already begun, when the next day, it was announced that Wells Fargo would be buying Wachovia at $7 per share. This resulted in an extra $7 million for Steel, not to mention the chance to sit on the Wells Fargo board.
Treasure from the Treasury

The Wells Fargo flip-flop happened very quickly. What changed in such a short period of time? Two things:

First, just after the Citibank deal was signed, Steel’s buddy Henry Paulson quietly revised the tax code to give enormous benefits to banks that buy other banks. This allowed Wells Fargo to stealthily stick taxpayers with losses under the tax code, rather than through the FDIC. This resulted in a $7 billion dollar taxpayer-funded benefit to Wells Fargo that would eventually go directly to Wachovia’s shareholders.

Second, Congress passed the $700 billion federal bank bailout that would provide $25 billion in direct funds to Wells Fargo The very next day, Wells Fargo announced it would purchase Wachovia at the higher price. In addition, the bailout included a provision that contracts relating to acquisitions in which the FDIC is involved might not be enforceable. In a press release announcing the Wachovia acquisition, Wells Fargo said that “the capital investment from the government” -- the taxpayer bailout -- “will enable us to finance the Wachovia acquisition.”

Although it was initially reported that the Wells Fargo purchase would not require government funds, the truth shows this assertion to be mere linguistic wrangling. Although the FDIC’s budget was not implicated in the merger, taxpayer funds enabled Wells Fargo to buy Wachovia at an inflated price, greatly benefiting Steel in his personal capacity.
Will Americans Take Action, or Get Duped Again?

Robert Steel and his fellow Banksters are walking free and living large. And now, with characters like Steel leading front groups such as the American Action Network and American Crossroads, they are trying to convince voters to support more candidates who will do their bidding and stall needed financial reforms. Steel and AAN should be ashamed of running misleading ads blaming others for the economic crisis they and their buddies helped create, shockingly accusing reformers like Senator Feingold of putting our nation in hock -- even though Senator Feingold voted not once, but twice, against the Wall Street bailout, not once but twice to end the TARP, and pressed Congress to use the TARP funds to pay down the deficit. We should not stand idly by in the face of this sleight of hand and misdirection. The next time you see an ad ending with "paid for by American Action Network," just visualize Robert Steel laughing all the way to the bank with the Wachovia/Wells Fargo millions he snatched from American taxpayers through conveniently timed loopholes.

[Demeter]

17. Bad Guys of the Foreclosure Crisis

http://www.truth-out.org/eugene-robinson-bad-guys-foreclosure-crisis64430

...Banks and other lenders, it seems, made statements in courts of law that turned out not to be true. Because judges have such an underdeveloped sense of humor when it comes to prevarication, this mess may be with us for a while.

The mortgage industry would love to blame the whole thing on predatory, opportunistic lawyers who are seizing on mere technicalities to forestall untold numbers of foreclosures that should legitimately proceed. The bankers are right when they complain that the delays are gumming up the housing market, as potential buyers for soon-to-be-foreclosed properties are forced to bide their time until all the questions about documentation and proper title are answered.

But it's the bankers' own fault that there are so many instances of foreclosure documentation with legal loopholes big enough to drive a moving van through. During the years of the real estate boom, lenders cut corners with paperwork in order to make as many loans -- and sell them to other lenders, who often sliced and diced them into securities that were then sold to investors -- as quickly as possible. This haste and inattention to detail, now coming to light, are partly responsible for the current crisis.

Laws vary from state to state, but all accept the principle that borrowers who fail to meet the contractual obligation to pay their mortgages can be subject to foreclosure and eviction. The process is devastating for families and for neighborhoods. In many cases, I believe, all parties would be better off if some way could be found to avoid foreclosure -- modifying the terms of the loan, say, by lowering the interest rate or even reducing the principal to reflect the fall in housing prices. I recognize, however, that there are many other cases in which foreclosure is the preferable option or perhaps the only option....But it's also necessary that the mortgage-holder have the legal right to foreclose.

[MattSh]

18. MORE DEPRESSING STUFF.

In Demeter's short-term absence, let's get something going here...

Zero Hedge Expects Civil War, Does TIME Second It?

Not exactly, but Stephen Gandel, writing for TIME’s Curious Capitalist blog, certainly entertains the notion of a Fed-instigated civil war. He remarks that the upcoming November 2nd Federal Reserve meeting could “maybe” be the most important in its history.

At issue is round two of quantitative easing, Bernanke’s Treasury bonds buying mission – which is in many ways equivalent to simply printing money — the uproar it could inspire in the public, and the possibility that it could leading to a taking up of arms.

From TIME’s Curious Capitalist:

“A number of people both inside the Fed and out believe this is the wrong move. But one website seems to believe that Ben’s plan might actually lead to armed conflict. Last week, the blog, Zerohedge wrote, paraphrasing a top economic forecaster David Rosenberg, that it believed the Fed’s plan is not only moronic, but ‘positions US society one step closer to civil war if not worse.’

“I’m not sure what ‘if not worse,’ is supposed to mean. But, with the Tea Party gaining followers, the idea of civil war over economic issues doesn’t seem that far-fetched these days. And Ron Paul definitely thinks the Fed should be ended. In TIME’s recent cover story on the militia movement many said these groups are powder kegs looking for a catalyst. So why not a Fed policy committee meeting. Still, I’m not convinced we are headed for Fedamageddon. That being said, the Fed’s early November meeting is an important one. Here’s why…

“…nearly two years after the Fed cut short-term interest rates to basically zero, more and more economists are questioning whether the US central bank is making the right moves. The economy is still very weak and unemployment seems stubbornly stuck near 10%.”


http://dailyreckoning.com/zero-hedge-expects-civil-war-does-time-second-it/

[Demeter]

19. COMEDY TONIGHT

One of the unintended consequences of the Great Depression was the golden age of comedy that followed...


The Great Depression affected theatre audiences on both sides of the Atlantic, as people had little money to spend on entertainment. In addition, "talkie" films at low prices presented a strong challenge to theatre of all kinds. Early musical films effectively killed off vaudeville by the early 1930s. Historian John Kenrick commented: "Top vaudeville stars filmed their acts for one-time pay-offs, inadvertently helping to speed the death of vaudeville. After all, when 'small time' theatres could offer 'big time' performers on screen at a nickel a seat, who could ask audiences to pay higher amounts for less impressive live talent?"<31> Only a few stage shows exceeded a run on Broadway or in London of 500 performances during the decade. Still, for those who could afford it, this was an exciting time in the development of musical theatre.--

http://en.wikipedia.org/wiki/Musical_theatre

... 1930s and 1940s represented the "golden age of American wit." But why is that so? ...

In the 1930s and 1940s, Americans lived by their wits. The one-two punch of the Great Depression and World War II could have bred bitterness and cynicism. Diffidence was one defense mechanism; witty conversation was an even better antidote, especially when combined with the natural escapism of a darkened (and air-conditioned) cinema house. If Americans lived by their wits in the 1930s, well, what else did they have? And even though that man in the White House -- the to-the-manor-born man from Hyde Park -- had no economic worries for himself or his family, he had a knack for channeling the psyches of those who did. And so Franklin Roosevelt used all the psychological tricks the rest of us used -- bluster, class warfare, and, yes, a sophisticated and self-deprecating wit -- all in the cause of bucking up his countrymen.

The America of pictures such as "The Philadelphia Story" and "Woman of the Year" was an America in which FDR cheekily asked White House economic adviser Leon Henderson: "Are you laboring under the impression that I read these memoranda of yours? I can't even lift them." Can't you close your eyes and hear Spencer Tracy saying those very words. (Or, if sounds more Reaganesque to you, think for a moment -- Ronald Reagan was in Hollywood in the golden age of wit; he starred in a few romantic comedies himself.)

Even the insults were witty -- "It must have been tough on your mother, not having any children," said Ginger Rogers in the 1933 musical, "42nd Street." And in "I'm No Angel," which was made the same year, the worst year of the Great Depression, Mae West quips, "It's not the men in your life, it's the life in your men." ...

http://www.politicsdaily.com/2010/08/07/romantic-comedies-golden-age-when-wit-was-front-row-center/

SEE ALSO: http://www.hollywoodmoviememories.com/articles/hollywood-history/remembering-golden-age-hollywood.php

[Demeter]

20. AT LEAST WE HAVE DILBERT AND DOONESBURY AND OLIPHANT

http://imgsrv.gocomics.com/dim/?fh=d8c7faa1b38cfcd9c20248b48a783dd4&w=750.0

[Demeter]

21. Although I have Been Forbidden to Mention Gilbert and Sullivan

(that's you, Hugin)

I must mention that last night's performance of the Mikado at Michigan Opera Theatre in Detroit, which I attended, was a mixed bag.

The "modernization" of the script: adding topical issues to both the "Little List" and the "Humane Mikado" patter songs and dialog, was cleverly done (mostly) and well received by roars from the audience. The singing was great, even if the orchestra sometimes wandered on its own without following the singer--which courtesy is rather expected at the professional level. The singers should not have to rush to keep up with the band, as it were.

Accountants, lawyers, the IRS, politicians (especially Tea Party types), and even Bernie Madoff got unfavorable mention, as well as foreign auto manufacturers and Ohio State's football team. (GO BLUE)

However, they must have had Laura Bush's couturist doing costume design. The men of the chorus were especially eye-searing, in two shades of a bilious green that make hospital scrubs look alluring and professional. The women looked upholstered, not Japanese. The set was functional, but nothing to write home about, and required a lot of fussing.

If I could just wash that combination of green out of my eyes...

[Demeter]

22. BANKS IN TH EGREAT DEPRESSION

In the 1920s, Nebraska and the nation as a whole had a lot of banks. At the beginning of the 20s, Nebraska had 1.3 million people and there was one bank for every 1,000 people. Every small town had a bank or two struggling to take in deposits and loan out money to farmers and businesses.

As the economic depression deepened in the early 30s, and as farmers had less and less money to spend in town, banks began to fail at alarming rates. During the 20s, there was an average of 70 banks failing each year nationally. After the crash during the first 10 months of 1930, 744 banks failed – 10 times as many. In all, 9,000 banks failed during the decade of the 30s. It's estimated that 4,000 banks failed during the one year of 1933 alone. By 1933, depositors saw $140 billion disappear through bank failures...

Some economists and historians have argued that the bank crisis caused the Great Depression. But others have looked at fundamental economic factors and regional histories and argued that banks failed as a result of the economic collapse.

Whether the fear of bank failures caused the Depression or the Depression caused banks to fail, the result was the same for people who had their life savings in the banks – they lost their money. At the beginning of the 30s, there was no such thing as deposit insurance. If a bank failed, you lost the money you had in the bank...

http://www.livinghistoryfarm.org/farminginthe30s/money_08.html

Bank Failures Cause the Great Depression

The monetarists' explanation for the Great Depression focuses on changes in the money supply. In this case, the changes were not the result of a deliberate policy experiment, but were instead the outcome of a lack of Federal intervention in the banking sector at a time when conditions for banks were quite perilous.

The impacts of the pressures on banks are apparent in simple counts of the numbers of banks. In the early years of the Depression, banks with loans to investors in the stock market were immediately at risk. Bank runs compounded these problems even for apparently healthy banks. Of the more than 25,000 banks in business in 1929, fewer than 15,000 survived to 1933.



The collapse in the banking sector precipitated a parallel contraction in the money supply. A severe contraction in the money supply, whether as a result of a policy or as a result of bank failures, then leads to a severe contraction in economic activity.



http://www.econreview.com/events/banks1929b.htm

THIS TIME AROUND, WE ARE DESTROYING THE WORLD IN MANY MORE COMPLEX, SOPHISTICATED WAYS...

[Demeter]

23. Wall St dividend constraints are eased

US bank regulators have eased their tough stance on dividend hikes and share buy-backs as the sector’s fortunes have improved, paving the way for the return of billions of dollars in capital to shareholders, say executives and officials.

Banks such as JPMorgan Chase and Citigroup have in the past week used their third-quarter results’ announcements to detail plans to increase dividends or repurchase their stock.

Read more >>
http://link.ft.com/r/4RNQTT/9Z3ZO7/HI3M9/UU40HK/BMSWVI/RF/t?a1=2010&a2=10&a3=21

[truedelphi]

47. okay, okay, enough doom and gloom. Surely there are some

Decent and HAPPY talking points.

Though I can't think of any...

[Demeter]

24. China raises benchmark lending rate

China will raise interest rates on Wednesday for the first time in nearly three years, lifting the benchmark deposit and lending rates by 0.25 per cent, the People’s Bank of China said.

The decision is the most decisive step yet to scale back the massive monetary stimulus China injected into its economy during the financial crisis and follows a strong rebound in growth and rising inflation.

Read more >>
http://link.ft.com/r/M2ZOXX/C5UCIS/OFBYP/JI6QHN/IYPZ3K/6C/t?a1=2010&a2=10&a3=19

[Demeter]

25. London sets out £2.5bn bank levy plan

The UK government has set out plans for a £2.5bn annual tax on banks, part of its drive to ensure financial institutions pay for the potential risks they pose to the economy

Read more >>
http://link.ft.com/r/A1TNOO/NSVJD6/YGZ3O/LQ01F5/JI1S9N/OS/t?a1=2010&a2=10&a3=22

[Demeter]

27. Fannie & Freddie ‘could cost US $363bn’

Fannie Mae and Freddie Mac, the government-owned mortgage finance companies, could cost US taxpayers as much as $363bn to the end of 2013, according to their regulator, less than some of the worst-case scenarios circulated by critics of the agencies, but more than projections by the White House

Read more >>
http://link.ft.com/r/P75VYY/PRAFBU/6ADGM/BMUQFP/184C29/T3/t?a1=2010&a2=10&a3=22

[Demeter]

30. Morgan Stanley suffers $91m loss

Morgan Stanley disappointed investors with a quarterly net loss, as momentum from its trading businesses stalled and the bank wrote down the value of an investment in a casino company

Read more >>
http://link.ft.com/r/3JFELL/UU537Y/K91WR/26QZRV/HD3XP3/ID/t?a1=2010&a2=10&a3=21

[Demeter]

31. Wells Fargo defends its foreclosures

Wells Fargo moved to reassure investors that its foreclosure procedures were correct and said it had no plans to suspend them as questions mount over how banks reclaim homes.

Read more >>
http://link.ft.com/r/3JFELL/UU537Y/K91WR/26QZRV/PRGS8L/ID/t?a1=2010&a2=10&a3=21

[Demeter]

32. Foreclosure crisis tops Obama agenda

The crisis surrounding mishandled foreclosure paperwork rose to the top of the Obama administration’s agenda, as senior officials met to discuss the next steps for agencies and regulators

Read more >>
http://link.ft.com/r/8P1R88/0GYHYI/204L2/9Z3KFJ/M9TELH/PJ/t?a1=2010&a2=10&a3=21

[Demeter]

34. Investors join forces in BofA bond fight

Some of the world’s largest institutional investors have joined forces with the Federal Reserve Bank of New York to recover losses on more than $47bn in mortgage-backed securities issued by Countrywide Financial, the consumer lender acquired by Bank of America

Read more >>
http://link.ft.com/r/73UJGG/V14RCN/VTVRG/JI6JF8/WL2JLS/AZ/t?a1=2010&a2=10&a3=20

[Demeter]

36. Citi seeks to allay foreclosure fears

Citigroup sought to allay investors’ fears over the US mortgage crisis, saying it had not uncovered any irregularities in its foreclosure process and downplaying the potential cost of buying back home loans from government entities

Read more >>
http://link.ft.com/r/6NPSBB/C5UOOV/52KB7/V1WLW1/A7QTOX/PJ/t?a1=2010&a2=10&a3=19

[DemReadingDU]

55. Today the mega-banks are conglomerations

of bought-up banks, merged banks, and numerous branches. Each mega- bank today probably would be hundreds (thousands) of banks that failed during the 1930's.

[Demeter]

26. G20 finance chiefs face currency struggle

The talks in South Korea over the next few days will show whether cracks are emerging in the G20 process itself and whether the group continues to be relevant after its show of co-ordination in late 2008 and early 2009

Read more >>
http://link.ft.com/r/P75VYY/PRAFBU/6ADGM/BMUQFP/LQTRN7/T3/t?a1=2010&a2=10&a3=22

[Demeter]

33. Intel to invest up to $8bn in US manufacturing

Intel has announced it will invest $6bn to $8bn in new manufacturing facilities in the US to enable the next level of miniaturisation of silicon chips

Read more >>
http://link.ft.com/r/R5WAEE/UU5J95/3CWTA/PRAUB6/KE1MWT/KI/t?a1=2010&a2=10&a3=20

[Demeter]

35. Companies in appeal for US tax amnesty

US multinational companies are clamouring for a tax holiday to repatriate billions of dollars ‘trapped’ overseas but are being rebuffed by Barack Obama’s administration

Read more >>
http://link.ft.com/r/6NPSBB/C5UOOV/52KB7/V1WLW1/M9TZXR/PJ/t?a1=2010&a2=10&a3=19

[hamerfan]

37. Kicking!

:kick:
In recognition of all the work Demeter puts into this to keep us informed.
Thanks Demeter! Great topic for the WEE!
hamerfan

[Ghost Dog]

38. LEAP/E2020: geopolitical dislocation phase of the global systemic crisis

(mods: public announcement)

/snip... The G20’s (or IMF’s) now patent failure to secure effective international cooperation to try and remedy the structural weaknesses of the current international monetary system perfectly illustrates LEAP/E2020’s anticipation which in March 2009, before the London G20 meeting, explained that the summit was the only window of opportunity to fundamentally rethink the global monetary system at the heart of the current crisis. In failing to seize this opportunity, we reported that the world would begin to enter the global geopolitical dislocation phase from late 2009. At that time, by way of an introduction to this new phase of the crisis, the world has seen the mid-flight explosion, during the Copenhagen summit, of the whole international process on global warming. Since then, every month brings a stream of public finance crises in one state or another, drastic austerity measures causing increase in social unrest (6), international meetings leading to reports of disagreement, the proliferation of threats between States over trade imbalances, etc., all against a background of a downward spiral into hell of the global system’s central power, namely the United States (7).

For several months now we have been witnessing the onset of a massive currency world war just like LEAP/E2020 anticipated nearly two years ago and reiterated in its time-frame of the crisis (8). Several weeks hence, the inevitable failure (9) of the FMI/G20 duo to resolve these currency-trade (10) tensions will provide both new evidence while marking a new tipping point of global geopolitical dislocation: every man for himself becoming the rule (11).

Two weeks from now, with the announcement of the actual details of a comprehensive plan to reduce spending, the United Kingdom will eventually have to face an unprecedented (12) socio-economic crisis that it has desperately tried to hide for months (13), and it will have to do it alone (since the United States are unable to help it, and it has put itself outside the European financial rescue system).

And in three weeks, the United States will concurrently expose an unprecedented political paralysis following the mid-term election (14), whilst the US Federal Reserve will launch a new attempt to rescue the US economy by monetizing a stimulus plan that the federal government is no longer able to launch (15). This attempt - whose size will be less than financial markets expect (because the Fed is now forced, in this case by the holders of US Dollar denominated assets: China, Japan, Europe, oil-producing countries (16)...) but more than enough to lead to a further fall in the dollar and plunge the world monetary system into an even worse conflict - will fail anyway because US society has, de facto, entered a phase of austerity that US leaders, in 2011, will have to recognize must also constrain the country’s fiscal and monetary policy (17).

From the world leaders’ side (18), the next four years’ global sequence can be summarized quite simply: last US attempts to "return to the world before the crisis" (stimulating consumption, maintaining deficits, debt monetization) that will all fail (19), last Western attempts to deal with the crisis using "Washington consensus" methods (limiting deficits by reducing social spending, no tax increases on high incomes, privatization of public services, ...) which will generate growing socio-political chaos, acceleration of the BRIC countries’ exit from the majority of Western financial and monetary markets (especially the two financial pillars of Wall Street and London) which will increase monetary instability, rising intensity of trade wars (coextensive with currency wars (20)), the coming to power from 2012 of groups of leaders who have decided to try new solutions (21) to exit the social, economic and political consequences of the crisis, taking note of the fact that the “Washington consensus” is dead ... because there is no consensus anymore and because Washington is a moribund world power.

As for the rest, the keeping the US debt’s Triple-A rating belongs to the same virtual world as the recent declaration by US economic authorities (22) of the end of recession: the growing disconnect between the words of a collapsing system’s key players and the reality perceived by the majority of citizens and socio-economic players is an infallible indication of systemic decline (23). But the financial markets are not mistaken because with the soaring cost of insuring US debt hot on the heels of Ireland and Portugal with a 28% third quarter increase in cost, the United States has become the third country for which the debt markets fear some very unpleasant surprises (24).


/more, notes... http://www.leap2020.eu/GEAB-N-48-is-available-Global-systemic-crisis-LEAP-E2020-s-analysis-of-39-countries-risks-2010-2014-A-collective-but_a5295.html

[DemReadingDU]

41. Washington is a moribund world power

Those LEAP reports don't mince words

[Demeter]

43. Nobody's Trying to Save the US ECONOMY

They are trying to save the bigger banks and the stock markets.

These are not the economy, but the 3 card monte game that's overstayed its welcome.

What amuses me is that this could be the end of the Federal Reserve scheme...and there couldn't be a more fitting self-immolation.

A government that doesn't protect and invest in its people doesn't deserve to survive. Especially one ostensibly formed "of the People, by the People, for the People."

[DemReadingDU]

56. So true

The jig is almost up

[Viva_La_Revolution]

39. kick! nt

[jtuck004]

40. Thought a chart of income through the years might fit here...

I have to go find one that extends to 2009...

___________________________________________





In this story from the Times of NY...

[DemReadingDU]

42. and that chart is 5 years old

I would bet in 2010 that the income for the top 1% has soared upward while the income for the bottom 90% has declined sharply, such that in the chart on the left, the lines intersect.

[Demeter]

44. You're scaring me.

I'm never going out on a Friday night again. I don't care if Harrison Ford invites me. It's too disruptive.

[jtuck004]

50. Here is an updated paper with data from the same person

Basically the hit on capital gains took down some of the gap, though people at the top 1% recovered much faster.

Looking ahead, however, he predicts the gap will continue to grow, because unlike the period of the Great Depression, when the administration took on the moneyed interests ("I welcome their hate") and the banking and other regulations that followed, which helped to narrow that gap, the same sentiment does not seem to be in existence today. Doesn't bode well...

http://elsa.berkeley.edu/~saez/saez-UStopincomes-2008.pdf

[snot]

45. Have you seen this? (keep clicking on "next")

In the right vein.

I've also seen a couple of Liz Warren presentations that may include what you're looking for, at http://c-cyte.blogspot.com/search/label/Elizabeth%20Warren .

[jtuck004]

48. I will have to get the data from those presentations,

and thank you.

Was there supposed to be a second link above the one in your post? (you mentioned clicking "next")

[snot]

49. No; just meant the "next" on the page initially linked to. ALSO, I just came across

this: http://www.shadowstats.com/article/hyperinflation-2010

Scroll down to the chart, "Real Average Weekly Earnings."

Hope this helps!

[jtuck004]

51. Ok, and thank you. There is

a link in my answer to DemReadingDU that references a later paper by the author who provided that data. Interesting analysis, and he looks into the future a bit.

[snot]

54. Thanks!

[midnight]

46. Don't you just love the chamber of commerce message?

[Demeter]

53. Which Message?

[Demeter]

52. What Happened to Change We Can Believe In? By FRANK RICH

http://www.nytimes.com/2010/10/24/opinion/24rich.html?_r=1&ref=frankrich

...But the most relentless drag on a chief executive who promised change we can believe in is even more ominous. It’s the country’s fatalistic sense that the stacked economic order that gave us the Great Recession remains not just in place but more entrenched and powerful than ever.

No matter how much Obama talks about his “tough” new financial regulatory reforms or offers rote condemnations of Wall Street greed, few believe there’s been real change. That’s not just because so many have lost their jobs, their savings and their homes. It’s also because so many know that the loftiest perpetrators of this national devastation got get-out-of-jail-free cards, that too-big-to-fail banks have grown bigger and that the rich are still the only Americans getting richer.

This intractable status quo is being rubbed in our faces daily during the pre-election sprint by revelations of the latest banking industry outrage, its disregard for the rule of law as it cut every corner to process an avalanche of foreclosures. Clearly, these financial institutions have learned nothing in the few years since their contempt for fiscal and legal niceties led them to peddle these predatory mortgages (and the reckless financial “products” concocted from them) in the first place. And why should they have learned anything? They’ve often been rewarded, not punished, for bad behavior.

The latest example is Angelo Mozilo, the former chief executive of Countrywide and the godfather of subprime mortgages. On the eve of his trial 10 days ago, he settled Securities and Exchange Commission charges for $67.5 million, $20 million of which will be footed by what remains of Countrywide in its present iteration at Bank of America. Even if he paid the whole sum himself, it would still be a small fraction of the $521 million he collected in compensation as he pursued his gambling spree from 2000 until 2008.

A particularly egregious chunk of that take was the $140 million he pocketed by dumping Countrywide shares in 2006-7. It was a chapter right out of Kenneth Lay’s Enron playbook: Mozilo reassured shareholders that all was peachy even as his private e-mail was awash in panic over the “toxic” mortgages bringing Countrywide (and the country) to ruin. Lay, at least, was convicted by a jury and destined to decades in the slammer before his death...

THEY ARE REALLY PULLING OUT THE STOPS AT NYT THIS WEEKEND--READ THE WHOLE THING, AND SEE MAUREEN DOWD'S COLUMN, TOO!