Category Archives: Great Depression

The Bear is Yet to Come: The U.S. Economy will fall into a Depression

With today’s announcement that Bear Stearns, the 5th largest investment bank needed an influx of cash to remain solvent to its outstanding investors/investments, it calls to question: what will happen next?

Bear Stearns, Merrill Lynch, Morgan Stanley, Lehman Brothers and Goldman Sachs are the benchmarks for high-yielding banks that produce money/provide liquidity in the Capital markets. If they start to falter, the next group is the commercial banks, which affects all Americans, Europeans and Asia markets.

The signs have been clear: Commodity Prices (Gold, Corn, Wheat, Silver, Oil) are at record highs, Mortgages are failing at huge rates, with ex-Fed Chair Greenspan asleep at the wheel in allowing the housing market to gallop ahead unrestrained, the United States Dollar is at record lows versus the Japanese Yen (99 Yen), Canadian Dollar (1.01), Swiss Franc (0.9987), The Euro (1.567) and to add to that, we are in a economic standstill right now, zero growth.

The United States Economy will trigger larger problems as it continues to pump liquidity into the market via lowering interest rates (expect .75% ease on Tuesday), thus causing the dollar to decrease in value and thus continuing to raise commodity prices, which introduces more inflation into an all ready, dicey situation.

Inflation has been a European concern of utmost importance which is why they have not lower their interest rates in lockstep with the United States. They are uniquely aware of the triggers of the Great Depression, which started in Europe, namely Germany, after WWI.

We are just at the beginning of a major economic shake up. And we have one Presidential candidate, John McCain, who said, “I don’t understand the economy…”

Which leads one to wonder, do you want another ill-equipped President running a country in a economic meltdown? What did the Iraqi war gain us in economic terms? (The cost and money spent could have been used better…)

George W. Bush, with a Harvard MBA, has taken us back to the edge of the 1929 October financial meltdown.

He and his policy people pushed for easy/no regs on lending of money to people that should not have ever received a banking loan on a house. These people got over their heads. Then the banks got too tight – on lending, or passed their bad paper on to other banks, and other banks did the same,etc. – and the money has been devalued in the process. Meanwhile, the Fed and Government has done us in with bad policies.

Oil prices are being driven by devaluation of currency. Your money is buying less and less – and the problem is spreading to corporations that are cutting jobs – as Ford, Chrysler, GM and other big manufacturing are reducing their forecasts but cannot lower prices, while those that do overseas business are doing ok or better. So, not all is lost.

So, I am sounding the alarm on the 1MC: “start preparing for a long downturn in the U.S. Economy. Expect prices to rise 20, 30 and 50% above today’s rate. And get your money out of risky investment vehicles. Hedge funds are the first to go. Stock up on staples. Get prepared for more bad news…”

Predicting another Great Depression is sometimes a self-fulfilling prophecy. But the government as currently constituted is not going to save you or me. “Let them eat cake,” is their mantra.

I have made numerous posts on the American Economy prior to this, which means I have been paying attention longer than just today…so, though this is radical to say “Depression,” in 12-18 months, it may “bear” itself out.

Moniker: No More Mr. Nice Guy, Nice Guys Finish Last

In the link above, Mr. William Safire’s Dictonary had a few wholes in it. He referenced the idea that last place was 7th in the 1940s. But aside from that, he was referencing politics. “Mr. Nice Guy” could be an apt reference to Neville Chamberlain, who practiced the policy of appeasement with Adolf Hitler. We realize that did not turn out well. The idea of a Nice Guy denotes weakness, too easily swayed to acceptance. A poor leader.
Another man famously, and erroneously quoted to have uttered, “Nice Guys Finish Last,” is Leo “The Lip” Durocher. This in reference to HOF Home Run basher Mel Ott’s managerial style of the Giants, prior to Leo taking over for “Master Melvin” Ott.
Actually, Leo is reported to have said, “They’re all nice guys, but they’ll finish last. Nice guys. Finish last.” Leo was never a nice, touchy-feeling manager or player. He once is alleged to have five-fingered Babe Ruth’s watch while a member of the Yankees in the late 1920’s.
Leo’s brash, uncompromisingly crass, insensitive nature was born out of his need to hustle early on in life. Nothing came easy. He survived the Great Depression as a middle infielder on the Gashouse Gang and was considered an immensely knowledgeable baseball man. He once owned the highest salary in the managerial ranks while in Brooklyn. Got suspended for year due to his connections to gamblers, mobsters and “the wrong people.”
Leo took over the reigns of the horrid Chicago Cubs franchise in 1966. They had spent twenty seasons getting their crap handed to them on baseball. Leo took them from a 65 win team to a 85-92 win seasons for six straight seasons. But he is forever known for 1969…and the over usage of that pitching staff and certain ballplayers. Unfairly labelled the sole reason they lost, Leo went down in history as the goat in Chicago because “Mean Guys finish Second”.
I picked this moniker because of Fantasy team I had that finished 2nd recently. By accident, I had pitching problems that could not be solved via trade or free agency. It was frustrating and I could hear Leo saying, “you are too nice.”
Have a Good Weekend!!!!!