Front Page:
Poll: 3 in 4 think USA is in a recession
USA Today
By Richard Wolf
March 18, 2008
WASHINGTON — More than three in four Americans think the country is in a recession, a USA TODAY/Gallup Poll over the weekend shows, reflecting a crisis of confidence that economists say could make the economy worse. As the Federal Reserve expanded credit to securities dealers and President Bush said his administration had taken "strong and decisive action," the poll revealed pessimism about the economy's direction.
Seventy-six percent of those polled said the economy is in recession, compared to 22% who said it's not. Not since September 1992, two months before President George H.W. Bush lost re-election, have so many Americans said the economy was in such bad shape.
"Recessions are almost always crises of confidence, and that's what we're having right now," said David Wyss, chief economist at Standard & Poor's.
Asked if the nation could slip into a depression lasting several years, 59% said it was likely, and 79% said they were worried about it. A recession is an economic downturn that usually lasts at least six months; a depression is longer, deeper and more broadly dispersed.
The poll of 1,025 adults was completed Sunday, the day the Federal Reserve financially backed JPMorgan Chase's buyout of venerable investment bank Bear Stearns. It was one in a series of actions meant to stabilize world financial markets and give investors renewed confidence, including a cut in the interest rate on direct loans to banks and a new line of credit for securities dealers.
"When people experience higher gasoline prices, higher heating costs, fewer employment opportunities, housing prices going down … then the common sense conclusion is things aren't very good," said Brian Bethune of economic forecaster Global Insight. Their pessimism "creates more problems," he said.
Jared Bernstein, senior economist at the liberal Economic Policy Institute, said a recession can become a self-fulfilling prophesy: "If folks don't feel confident enough to make that purchase, to take the vacation, even to go out to eat, that obviously reverberates negatively throughout the economy."
To counter that cycle, President Bush briefly invited reporters into his normally private policy meeting with economic advisers Monday. "One thing is for certain, we're in challenging times," Bush said. But he said that the government "is on top of the situation," adding, "in the long run, our economy is going to be fine."
After meeting a second time with Bush on Monday, Treasury Secretary Henry Paulson told reporters that the administration is seeking to take actions "that are going to increase confidence in our economy."
Former Federal Reserve chairman Alan Greenspan sounded more downbeat. Today's financial problems could likely be seen as "the most wrenching since the end of the second world war," Greenspan wrote in the Financial Times on Monday.
Democratic presidential candidates Barack Obama and Hillary Rodham Clinton urged greater action. Obama, campaigning in Pennsylvania, said the economy "is heading toward recession. We probably already are in one." He said "we must focus on what we can do to restore the public's confidence in the market."
Clinton was more cautious. Calling it a time of "stress and uncertainty," she said there was "urgency" to continue monetary policies like those taken Sunday. "We are in the soup, and we better get ourselves out of it before the consequences get drastic," Clinton said in Washington.
Presumptive Republican presidential nominee John McCain was in Iraq Monday. His top economic adviser, Douglas Holtz-Eakin, said McCain has confidence in the Federal Reserve's action to shore up the nation's financial system. But while that action may have been necessary, he said, it's imperative to "ensure that Main Street America does not bail out financial speculators."
Truckers Broke, Will Strike Across America
Spectre of Coming Depression haunts Federal Reserve
Recession is a given. Can we avoid depression
When economist Robert Parks predicted early last week that there was more than a 60 percent probability the current financial meltdown in the United States would lead to the "Bush depression," his phone began ringing like crazy with calls from the media."
With banks collapsing, the dollar reeling, the Federal Reserve making up new rules as it goes and observers discussing a new Great Depression, the presidential candidates are still on scripts they wrote a year ago.
MERRILL LYNCH TO LOSE 15 BILLION (again)
A financial crisis unmatched since the Great Depression
UK facing worst financial crisis 'in decades'
Closer To Financial Meltdown
In this pdf file, Table 1 is as follows:
As the article states:
The undeniable truth: In the grand casino of derivatives trading, JPMorgan Chase is overwhelmingly and unabashedly the biggest player of them all. As you can plainly see in the table above, it controls ...
$91.7 trillion in derivatives, or over 53% of all derivatives held by U.S. commercial banks, among which are ...
Nearly $7.8 trillion in the oft-inflammable credit derivatives, or 55.6% of the total.
And all with little more than $1.2 trillion in assets!
JPMorgan Chase will be going down in flames.
"God wouldn't have made sheep if he didn't expect them to be sheared." - J.P. Morgan
How poetic.
