[Concerned1]

A great article by Christopher Ketcham about the economy and what this downturn really means. A quote...


Crisis? What Crisis?

"Alas, the inventories piling up across the blackened plain, burial-mounded and no one buying, and in the wind a hysterical lament, the marketeers, the opinionators screaming their heads off that "something must be done," as if we hadn't enough of enough to last this generation and the next, as if it is not a wonderful and beautiful thing to stop buying stuff we don't need.
There's the rub. The deranged axiom of the modern consumption economy is that when people stick to what they need and save their money, it's a god-awful disaster. I see only the cleansing wind...

So where's the crisis? Answer: there is none. There is only a slowing down, a getting off the drug of crapola consumption. If we are the coke addict, the alcoholic, the meth fiend emerging from a long lunatic twilight binge, so hepped for so long that mania has become normalcy, then what is normal and healthy and balanced now feels like crisis."

http://www.organicconsumers.org/article ... _16931.cfm


You know, it's incredible to me that no sooner did the Wall Street drunks and banksters wreck our economy then we gave those very same drunks the keys to a brand new car, bought and paid for with our money (no one asked me), to give us all yet another ride. It's incredible to me that just when we finally see what decades of sick excess can do to a nation, our government is tellling us that saving money is bad. We should put our futures in jeapordy by sacrificing our meager savings now. The short term 'fix' over the long term solution. Something stinks.

[sparky]

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One up brother , there is life in normalcy .
the advertisment industry can be blamed for most of the present troubles
making people want things they wouldn't have though of on their own



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[patience]

On target! Vance Packard wrote "The Status Seekers" long ago, about how advertising exploited blue collar need for self esteem, and turned it into demand for bigger cars with bigger tailfins in the 1960's. J6P can't seem to figure out that he has been manipulated forever.

[Arsenal]

So true.

[vision-master]

On target! Vance Packard wrote "The Status Seekers" long ago, about how advertising exploited blue collar need for self esteem, and turned it into demand for bigger cars with bigger tailfins in the 1960's. J6P can't seem to figure out that he has been manipulated forever.

But I need a SUV - for my family.

[shortonoil]

Concerned1 quoted:

There's the rub. The deranged axiom of the modern consumption economy is that when people stick to what they need and save their money, it's a god-awful disaster. I see only the cleansing wind...

Credit crunch may only have just begun, S&P warns

SAN FRANCISCO (MarketWatch) -- The credit crunch may only be in its early stages and a bigger contraction in lending in coming months could have "serious implications" for the U.S. economy, Standard & Poor's Rating Services said Friday.

While politicians and others have complained that banks aren't lending, the data on credit outstanding credit in the U.S. only tenuously supports this idea, the rating agency said. "What's behind the apparent difference between perception and reality?" Standard & Poor's credit analyst Tanya Azarchs said. "It may be that, while growth in overall credit was positive through at least third-quarter 2008, it has risen at a slower pace than at any time since 1945 -- far below the 8%-10% rate in most years."

Banks are replacing loans as they mature, but there's little net new loan growth, she noted. "That could mean that the slowdown in lending is just an opening act, and a true credit crunch may yet take the stage," Azarchs warned. Banks are making fewer and fewer commitments to lend, and new issues of bonds and securitized assets have slowed to a trickle, the analyst said. "This portends a contraction in total credit available in the coming months," she wrote. "Since this lack of lending may have serious implications for the economy, the U.S. government has been devising policies that would encourage banks to lend."

Market Watch

The credit markets are still growing, but only at a trickle. Consumer credit has yet to go through the massive de-leveraging that has been seen in other sectors. Even though the credit markets are still functioning, the economy is coming apart because the credit growth rate is not rapid enough. There is now not enough new money (almost 1 trillion $) being created by the credit system to service the debt that is already in existence.

Over the next six month JSP is going to cut his spending dramatically. Home equity funds are no longer available, and Mr, Miss JSP are getting afraid that their jobs won’t be there for much longer either. When the consumer really starts to retrench, the money supply to the general economy will vanish, and cascading defaults will hit like an avalanche.