This Is Not A Fire Drill. We Are In Serious Trouble, All Of Us.

[MannyGoldstein]

The world's financial system is in meltdown. Last time this happened we got the Great Depression, the Nazis, and other awful stuff. I've studied this period in history for some time, and I see no particular reason to believe that it will be different this go around.

Tonight I was listening to a podcast about a children's opera that was performed at the Thierenstadt concentration camp. After 40 or so performances, the composer, librettist, and players were put to death.

God help us this time.

[madaboutharry]

1. This is really scary.

I don't know what to think.

[FrenchieCat]

2. God will help. Those playing Good Germans this time around

will not prevail. Amen!

[FlyingSquirrel]

3. Amen.

[Chloroplast]

34. Amen!!

[eridani]

38. God helps those who help themselves

More voter registration, phonebanking and doorbelling please.

[Arugula Latte]

88. FrenchieCat --

I love most of your posts, but I have to say, I don't think there's some all-powerful deity pulling strings. If there were, s/he is quite an asshole who just loves to slaughter innocents ... Why didn't this deity step in during the Holocaust, slavery, mass murder of Native Americans, the tsunami, Katrina, etc., etc.?

[roguevalley]

89. I think, Oregonian, that God is doing what God always does, expecting

us to do right with our free will. Bless us all, honey.

Roguevalley

[wanpete]

4. yes, this is really, really serious. we are at the brink of a depression.

we can deny it, but this is what we are facing.

[silverweb]

5. The potential silver lining...

Obama may be the new FDR and America may get another New Deal.

God help us if we don't have massive voter turnout and a Democratic sweep.

[kestrel91316]

8. Well, certainly Dubya and McSame are the Herbert Hoovers

of our time.

[OmahaBlueDog]

14. They're worse than Hoover

They're more like Harding and Coolidge. By the time Hoover shows up, the stage for the depression had already been set.

[iiibbb]

45. Except Hoover was actually pretty qualified.

... part of it was him getting a bad beat.

If Hoover had not been president when the depression hit, and ran, he likely would've won given his qualifications.


Bush... just hopes it's part of God's plan.

and McCain? Whatever it takes to win.

[liberalmuse]

9. Obama reminds my mom of FDR...

because she says he talks to the American people like FDR did with his fireside chats. Ironically, she may be more right than she meant to be.

[silverweb]

26. Ask your mom...

...if she can envision Michelle as a modern-day Eleanor, as well. :D

[mrs_p]

6. i've been thinking hard

about what my long term response will be if the worst happens. self-destruction through reality-changing substances has entered my mind (but then i would fail out of school). that leaves me to flee from or fight for this country. i think i am leaning towards fighting for my home. we won't let them take anyone to the chambers this time. i'm sure i'm not alone in saying this is a cause worth dying for.

[On the Road]

7. It is Definitely a Crisis

buy with the federal takeover of FNMA and FRMC, however, there is no reason to think it will become a depression. During the 19th century, financial panics and crashes used to happen every ten years or so.

[shraby]

35. That is exactly why rules and regulations

for banks and financial markets were put in place until they started dismantling them in the 1980s.

[On the Road]

87. I Could Not Agree More

Markets are necessary, but they are inherently unstable and opaque. Regulation and transparency is what makes them work.

[redstate_democrat]

10. Oh, ain't gonna be any concentration camps in America.

There will be some kicking of ass in the U. S. of fucking A. Bet that.

[Alhena]

13. Just a big trailer park

[tomreedtoon]

17. Ahem. The camps ALREADY exist.

They are ready to go, needing only troops to man the barbed wire. This was old news back in the 1960's, when computers had lists of "undesirables" who would be rounded up in case of national emergency. Back then, they'd print out warrants on teletypes. They'll probably fax them now.

[Nikki Stone1]

11. How did it get this bad?

Although weakening banking laws certainly helped.

[vaberella]

23. War. When this unnecessary war began it was like having a faucet of money turned on high.

We were literally being drained. A perfect example is to see the Reagan years to truly understand. Another deranged Republican.

[Nikki Stone1]

85. Sometimes I think Bush & Co were a wrecking crew

Every stupid ass move that could be made in a war HAS been made in this one. The only thing it has succeeded in doing is draining the US dry.

[Nikki Stone1]

86. Sometimes I think Bush & Co were a wrecking crew

Every stupid ass move that could be made in a war HAS been made in this one. The only thing it has succeeded in doing is draining the US dry.

[Oak2004]

36. Banking laws. Decades of failed energy policies. WTO/NAFTA/CAFTA, the dismantling of the safety net,

the destruction of unionism, and above all the failure to acknowledge that our modern understanding or growth and natural resources demands a fundamental rethinking of capitalism.

Oh, and probably eighty-fucking-gizillion other things. But the turning point was the election of 1980.

[Alhena]

12. Who will really be hurt by Lehman failing besides shareholders?

They seem to be the ones holding the bag. But otherwise, I have a hard time seeing how this failure will effect working class folk.

[inthebrain]

16. The Tax Payer who fund the bailouts

It always falls on our heads.

I'm sick and tired of supplementing these assholes while the rest of the country is thrown into poverty.

Trust me, these assholes won't go one day without a meal.

[Alhena]

18. Yes, but reportedly there is no bailout- shareholders get little to nothing in bankruptcy

[MannyGoldstein]

30. The Problem Is Inter-relatedness and Derivatives

1. Because everything has become so intertwined, as banks fail, they take other banks down.

2. Derivatives are nasty, nasty items that allow banks to lose as much as 10 or 20 times what they have invested. This can wipe out an enormous number of institutions and individuals in almost no time. There's more than $500 trillion in derivatives out there that can go "poof" and disappear. That's 40 years of US GDP, an astronomical amount of money.

Nobody knows exactly how this will play out - it's too complex. But it's unlikely to be anything but very, very ugly.

[abumbyanyothername]

47. The entire economy of the last 55 or so years

(think, TV, automobiles, airlines, most meals eaten in restaurants, dishwashers, etc.) is based on ever expanding availability of credit.

Not only did we stop growing credit, but we are contracting it.

This is VERY BAD for anyone that doesn't work in the food, or alt-energy industries.

[northernlights]

78. 401ks

pension funds. those are who the biggest shareholders are.

[tomreedtoon]

15. Didn't you think this mess was necessary?

As people keep pointing out here, the American People are MORANS. They won't know they are hungry until someone takes the food out of their mouth (hopefully without removing their three remaining teeth).

Without the Great Depression, Roosevelt wouldn't have been elected. Without the Second Great Depression, Obama won't stand a chance of election. Let that be your consolation on the breadlines.

[ComplimentarySwine]

29. WHAT?!

You really think that unless the US is thrown into turmoil and suffers a "Great Depression" that Obama doesn't have a CHANCE? So if we wake up tomorrow morning and the guys on Wall Street aren't hanging themselves, we might as well just forget this whole election thing and accept that McCain/Palin are movin' into the White House? Please...

[tomreedtoon]

61. Look at the last few elections. Am I wrong???

I know people who still think the Democrats are the party of Jane Fonda, and are still fighting Vietnam in their minds. And they will still vote for McCain. Not to mention the out-and-out racists who will never vote for a black man.

It WILL take a tire iron to the head - like a full-blown depression - to get them to change their minds. Americans ARE that stupid.

[Skittles]

69. I hear you tomreedtoon

I believe you are correct

[BlooInBloo]

19. Quick summary of a busy financial day....

http://calculatedrisk.blogspot.com/2008/09/summary-thread-lehman-aig-bofa-buys.html

"This is a wild day for the financial markets. Here is a summary post (scroll down for actual posts):

UPDATE: from Bloomberg: Banks, Firms Set Up $70 Billion Fund for Liquidity

A group of banks including Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. are putting up $70 billion for a borrowing fund aimed at providing liquidity.

1) Lehman is expected to file bankruptcy before midnight ET.

2) AIG rejected private equity investment and has asked the Fed for help. A restructuring plan will be announced tonight or early tomorrow morning. Update: From the NY Times:

The American International Group is seeking a $40 billion bridge loan from the Federal Reserve, as it faces a potential downgrade from credit ratings agencies that could spell its doom, a person briefed on the matter said Sunday night.

3) BofA bought Merrill Lynch for $29 per share in stock.

4) The Fed has expanded its lending facilities, including accepting equities."

[vaberella]

21. What does this all spell out too? The Fed will become independent & reflect Central banks in Europe.

n/t

[BlooInBloo]

22. Dunno.

[dkf]

27. AIG is going to the Fed?

I didn't realize they were able to use the window.

[BlooInBloo]

31. Neither did I.

[progressivebydesign]

44. Thank you. A voice of reason and facts. n/t

[vaberella]

20. What's interesting is this...As Lehman Brothers collapses it's offset

by BOA buying out Merril Lynch and once again revitalizing the nation. Not to mention the Fed ends up also bailing out LB slightly *supposedly* cushioning it's collapse. However, if WaMu goes out I won't be caught in this drama.

[AZSlacker]

76. I hope WaMu doesn't go under

Thats where I keep my $

:scared: :scared:

[AtomicKitten]

24. You know what's scarier? People that would vote to continue Junior's failed policies.

:scared:

[YvonneCa]

33. Keeps me up...

...some nights. :) :scared:

[MadrasT]

25. I heard that podcast. It was haunting and deeply disturbing.

The concentration camp was set up to be the "showcase" that the Nazis would bring people to so they could show them how well they were treating the prisoners.

And they ultimately met the same awful fate as those at Auschwitz and the other camps.

I've always been fascinated with the history of the Third Reich, as awful as it is.

I don't like the parallels we are seeing today.

[Neecy]

32. I recommend "War and Remembrance"

By Herman Wouk. Yes, it's historical fiction but his research is impeccable. Part of the novel takes place in Thierenstadt.

[MadrasT]

81. I read that years ago. Thanks for reminding me of it.

I'm sure it will take on a whole new context today. :hi:

[Riddler]

28. Looks like the main difference is the Nazi's are in charge of THIS country this time around

[Shine]

37. Take a deep breath. The past does not equal the future.

Keep the faith. Stay positive. Hold the vision of Change in Leadership!

:toast:

[nichomachus]

40. "Take a deep breath" --a truly patronizing and insulting remark.

[Shine]

48. Gimme a break. Just because I suggest taking a breath

you think I'm being patronizing and insulting ? That's completely ridiculous. :eyes:

[nichomachus]

83. Also insulting

Take a deep breath insinuates that the other person is hysterical and hyperventilating, but you are able to help them through it.

It's not ridiculous, either.

Take a deep breath is something you say to someone who is out of control

[Shine]

84. Whatever. I'm not going to get sucked into the fear mentality here.

nothing insulting was meant, but if you want to see it that way, obviously I can't stop you.

[OneGrassRoot]

70. Really? And you've been here for a while and think THAT is patronizing?

:rofl:

I rarely chime in on such things -- and this is not snark -- it's incredulity that you think "take a deep breath" is patronizing.

[nichomachus]

82. It's an implication

that the other person is hysterical and hyperventilating and just needs your sound guidance to bring them down.

[Douglas Carpenter]

53. I'm afraid that these problems are far deeper than anything a President Obama or a President

"whoever" can fix. I certainly believe that a President Obama or an even more progressive President will do a better job than the alternative.

But we have had almost four decades of unsustainable borrowing secured by almost four decades of unsustainable speculation.

During this same period North American and Western Europe has rapidly de-industrialized to the point where there is now relatively little labor intensive tangible goods being produced anymore. The strongest aspect of American production of actual tangible items are the manufacture of goods to service an unsustainable military empire.

The Republicans may have been the most zealous about pushing America down this self-destructive path, but frankly it has been a bi-partisan effort.

If Barack Obama is President, I have no doubt he will follow a wiser course than a President McCain and one that is far more sensitive to the needs of ordinary people. But it would be foolish to imagine he can, no matter how much he wanted to, undo the damage that is already done.

To a great extent the banking system is collapsing because the housing market it collapsing. But realistically speaking in the long term, the housing market has to collapse because it was being priced into the world of the unreal and certainly the unsustainable. If it doesn't collapse affordable housing for the vast majority of the up and coming will simply cease to exist.

[vaberella]

57. Actually it's not necessarily about fixing, but mitigating.

And inspiring investment changes and practices, similar to FDR---dumping gold to build up the dollar.

[Douglas Carpenter]

60. well yes, I doubt that revolutionary changes will come out of it. However, the shift back to

a more interventionist state in matters of economy will probably become inevitable. And that is the general cycle throughout history; interventionist to laissez faire back to interventionist.

The tension between, "the government can fix" it versus "the markets can fix it" will probably shift back increasingly in favor of the governments fix.

Just a couple of days ago, the most capitalistic administration in American history essentially nationalized two of America's largest banks.

[Douglas Carpenter]

39. 100% Agree. At least during the depression of the 1930's - the western world could wait and hope

for the factories to open again. In the post-industrialized economies of Western Europe and North America, the resolution to the situation could likely be entirely different.

With economies that are no longer based on the production of tangibles, what will rise out of a near total collapse?

[abumbyanyothername]

52. What will rise out of near total collapse?

Here is my view:

1) De-urbanization. People will be forced out of cities and onto to land where they can "grow their own."

2) Alt-energy. No matter who runs the country, they will see how exporting about $400 billion/year for energy just cannot be sustained in a de-creditified economy.

3) Less work for people in the workforce, more work for people who think they should be out of the workforce. Growth, consumerism and keeping up with the Jones' will pass away, simplicity and subsistence will replace them.

4) The global economy is going down the tubes too. With no American consumer appetite to sop up the output, those factories in China are just so much excess capacity.

5) Demilitarization of the US. We just can't afford military adventurism.

[mzmolly]

58. We need to rebuild our infrastructure and focus on alternative

energy production. I think this is one way we can put America back to work and start to re-build our middle class? We also need to strengthen labor unions.

:shrug: We need "trickle up" economics to take hold again.

[Skwmom]

41. I think the Great Depression is going to look like an oasis compared to the financial

collapse we are facing.

[vaberella]

42. I'm curious to know if people here are going for Gold or Silver, because of this mess.

Besides these big money lenders we also have WaMu nearing collapse in a few weeks. I'm sure also there will be some massive small bank losses.

[WinkyDink]

46. And people will sell their gold and silver for...? It's not like there's an inherent value to them.

[vaberella]

56. Bloody hell, good point. n/t

[gateley]

49. Or putting their money in Euros or other currency that isn't shrinking. Yet. nt

[vaberella]

55. I wouldn't do that. The Euro is in the same mess as the dollar.

The European market is directly related to our market. The asian market is based on industry. But our what the Europeans can't afford with the Chinese they can easily get cheaper from us. But what I've found out from watching the market for several months now is that when US stock goes down, Euro stock follows suit and falls heavier. The Asian market can go up and down only because of the people's investment in us. Once they move that investment to other areas then they become qausi-independent.

[gateley]

80. Yeah - not being in a position to really DO that, I haven't been on top of it,

so that's why I added "or other currencies". Is there a new "gold standard" for currency -- like the dollar used to be?

I'd ask Warren Buffet where he's got his cash tucked away, and follow suit.

[progressivebydesign]

43. Honestly.. this type of panic is part of the problem.

BofA took over Merrill Lynch today, with the help of ML and the govt. Lehman bros deal falling through was awful, but the end of the world is not coming, and the "depression" is not returning. But.. if people freak out, as I'm seeing posters here talking about buying canned goods, then you will be helping to cause more problems.

Not trying to be like Bush and say "go shopping", but for God's sake, the sky is not falling.

[CarbonDate]

71. What's more is that even if it were, this type of panic....

...wouldn't actually accomplish anything.

It wasn't the stock market crash that caused the Great Depression, but the panic which ensued. People need to remember that this is not 1929 and that there are protections in place (thanks to FDR) to prevent that from happening again. Are we going through a rough patch? Yeah, but people need to chill out or it's just going to get worse.

[nolabels]

72. I don't think the greedy ones will think anything is wrong

Some how it seems that some of the big fish that keep on getting bigger will do just that somehow. That seems to be the pattern and what a lot of them are poised to do :shrug:

[MannyGoldstein]

74. Actually, The Great Depression Began Years Before The Stock Market Crash

Foreclosures and unemployment started to climb rapidly in the mid 1920s - after a contraction of credit. The stock market crash was simply an easily-quantified event that we now look back on as the symbol of the Depression's start.

[northernlights]

79. um, hate to tell you this

but the feds have spent the last 30 years undoing the protections that FDR put into place, thanks to hundreds of millions spent on lobbying by the financial conglomerates that are now going down.

It's the very undoing of those evil regulations that turned their greed loose and created this mess.

[Raschel]

50. torturing children

They did the same sick stuff in China. They would make the children perform concerts while they executed people in front of them. Perversion of the utmost.

[Gregorian]

51. War could be one of the offshoots of financial troubles.

I just finished reading an article on the economic disaster that is here. And toward the end it mentions war. As we all know, we're presently killing people for oil. Sorry if that sounds crude. No pun intended. But it happens to be the truth.

So imagine dire circumstances. Well? That's when the survival instinct can get the best of people. Fear turned to greed.


Like I said after the towers were dust. Forgive. And of course, that was the last thing on just about everyone's mind. Unless we are conscious, and stay clear and focused, instead of emotional and seeking blame, there will be fallout. Now is the time to unite as one.

[Breeze54]

62. Financial troubles are the offshoots of war!!

We've been saying that for awhile now.

Do you think they'll start listening now?

[Skwmom]

54. When Bear Stearns was going down, CSPAN had a financial

guy on. He was talking about the TRILLIONS in losses that the big financial institutions were facing. The look on his face was one of PURE TERROR.

[Algorem]

59. some of some of the richest guys' money is going to shift to some

of the other richest guys.

[Spider Jerusalem]

63. It's a bit of a stretch to blame the end result of two thousand years of Christian anti-Semitism...

and of going on a century's worth of militaristic German nationalism on the Great Depression (not to mention the outcome of WWI and the 'we didn't lose, we were betrayed' Dolchstoß myth in Germany). That's a painfully simplistic and profoundly absurd thing to say. The Great Depression was quite bad enough without trying to conflate it with National Socialism or the Holocaust.

[MannyGoldstein]

75. The US Also Flirted With Fascism

The American Nazi Party, the KKK, Father Coughlin, and other such entities became important in the US in the 1920s and 1930s. We were fortunate that FDR was able to bring out the better angels of our nature.

Prior to Hitler, Germany was the most tolerant major country in Europe, possibly the most tolerant on Earth. For example, it was the only major European country that would accept East European Jews as Immigrants. Then it all changed.

[dgibby]

64. So, let me guess

What comes next? Shock Doctrine?:shrug:

[bridgit]

65. I am convinced there is less than a handful of DUer's able to even comprehend...

the pith of your OP :):(

[and-justice-for-all]

66. Ben Franklin and others...

have warned us about the Banking Industry..

[WinkyDink]

67. When the revolution comes, I hope they go after the yachts and gated communities first.

And not my unprotected suburban home.

[Eurobabe]

68. Gee, what a great time to buy a house

:eyes:

I have to think that this is going to be a global $$$ flu. With no vaccine.

God help the world if Geezer/Failin get into the White House.

[Skwmom]

73. Oh come on now. They'll restore confidence in our financial markets.

The absurdity of such an assertion is mind boggling but since when has that ever stopped them.

[npincus]

77. more bank closures next.... holy shit.

25,000 Lehman Bros. former employeees hit the streets today.