This looks an awful lot like the beginning of a second Great Depression.

I think Krugman's growing more despondent daily. He has a good back-of-the-envelope analysis of the stimulus program and its effects (or lack thereof) on employment. While many tend to discount Krugman's obvious Keynsian bent, it can't be denied that the old guy was feeling rather chipper when Ben ascended to the helm of the Fed (only to be sadly disappointed), and now his post-election bliss seems to be waning equally quickly. And all this before today's ADP employment numbers came out.

My problem with his analysis is that he seems to be wrapped up in the issue of whether the conservatives will "blame" Obama for his lack of ability to pull us out of the quicksand. There is no well-articulated proof that I have seen that ANY economic policy will remove the pain, and little proof that it will do more than minimize it somewhat, or worse, postpone or exacerbate it in the long run. We're running blind here. Some very good articles out there recently on the lessons that economic history can, and more importantly, cannot teach us. Nothing in itself is unique, but everything taken together always is, or some such. Hopefully Krugman's wrong about the depression angle, or is just trying to frighten, but who knows? Intel's results (with 80% of the personal computer market a definite tech indicator, and NOT a lagging one) sucked, and stunningly sucked much more than anticipated just a month or two ago.

I'm not quite sure why bailing everyone out is the solution to this; especially with few, if any stipulations. One would think they'll burn through the cash and resolve to the same issues.

Seems like it is only slowing down the inevitable.

Hi aboutready,
Thank you for your insight. I know little about either economics or Krugman. I appreciate your explaining the politics of the article. I think you sum the entire situation best by saying "We're running blind here".

Just read Roubini's latest: "Warning: More Doom Ahead"......"Severe vulnerabilities remain in financial markets: a credit crunch that will get worse before it gets any better; deleveraging that continues as hedge funds and other leveraged players are forced to sell assets into illiquid and distressed markets, thus leading to cascading falls in asset prices, margin calls, and further deleveraging; other financial institutions going bust; a few emerging-market economies entering a full-blown financial crisis, and some at risk of defaulting on their sovereign debt............the U.S. contraction will be U-shaped: long, deep, and lasting about 24 months. It could end up being even longer, an L-shaped, multiyear stagnation, like the one Japan suffered in the 1990s."

It's not that I enjoy scaring the crap outta myself, just trying to find accurate analysis.

mdasch: "Seems like it is only slowing down the inevitable." Afraid you're right.

dwell, a site that I like a great deal, as it seems to cull the best links and has good, independent-leaning analysis of its own while admitting areas of lesser knowledge/certainty, is www.nakedcapitalism.com. Two more good sites for info are www.calculatedrisk.com and www.ritholtz.com, the first primarily for macroeconomic indicators and the latter has a broader coverage, including some great market analysis. Both are easily accessible for economics newcomers (although the comments aren't, but they will explain things without derision if asked), and Ritholtz has even been making some bullish noises recently. I like Financial Times, also. MacroMan is fun, but more technical.

Stay away from Nouriel and Mish (Mike Shedlock). I am sort of joking. I agree almost entirely with the former, and frequently with the latter, but they really can bring one down, even a bear like me. Panzer, at financialarmageddon, is also an uberbear, but I like his coverage as he often goes beyond the numbers with stories from the trenches, so to speak.

Thank you aboutready for sharing your sites. I already read calculated risk & naked, so I'll check out the other sites.

Yeah, stop drinkin the Roubini; it's good stuff but packs a terrible hangover. But, Roubini is the car crash from which I can't turn away.

What do you think about gold? should I buy some? will our $s soon be almost worthless?

Thanks

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." Ludwig von Mises; Human Action: A treatise on Economics, Regnery, 1966, pg. 572.

Silver coins pre 1964 are a good option as well and maybe a 9mm and a box of ammo :)

Where's Noah when you need him? Gold is a tough one, as is currency generally. I think that the dollar rally is grossly overdone, but the conspiracy theorist in me can't help but think that the whole onset was insane to begin with. But maybe that's just because my husband is paid in the pound, lord help us. There are so many forces calling for both the protection and the destruction of the dollar that in the short term who can tell? In the long term I'd bet destruction, did you see the Buiter piece covered on NakedCapitalism discussing the reprecussions from the stimulus plan? You might check out MacroMan, he discusses currency, but not with any great cheer these days.

I am not a goldbug, but I think there will be another gold rally later this year/early next, but that's based entirely on instinct, and the belief that there will be another negative reckoning when things don't improve as analysts are forecasting, and we're faced with that massively ballooning debt and little to show for it. Mark Thoma, at economistsview (another good site), has shown that certain forecasting isn't very accurate beyond a six-month period, so the Goldilocks should probably be ignored, certainly for now.

burkhardt, you forgot the canned goods.

Thanks aboutready. I'll check out Noah's writings re: gold. I just feel that I'll get burned by gold. Oh well, tralala, running blind with scissors.

No dwell, running blind and deaf with machetes. Good luck. I'm happily in cash for now (and I got out of the market shortly after the peak, couldn't stand the volatility). In better times I checked my market performance every couple of months, or if some particular news caught my eye. I'm treating my cash the same way, just let her sit until something tells me to move. These times they are a'deflating, so for now I won't worry about hanging tight.

More Great Depression II indicators and not the good kind...
http://ny.therealdeal.com/articles/real-estate-exec-steven-good-found-dead-possible-suicide
http://www.nytimes.com/2009/01/07/business/worldbusiness/07merckle.html?ref=business
http://thelede.blogs.nytimes.com/tag/rene-thierry-magon-de-la-villehuchet/

Hey I'm taking the Porsche to Virginia to get some AK-47s and some glocks... anybody want anything while I'm down there?

Can you stop at South of the Border on the way and get some kick-ass fireworks to set off once this party gets started? (Does South of the Border still exist, or has it been relegated to a fuzzy drunken spring-break memory?)

Take the Navigator. Better yet the Hummer. Gas is cheap and you'll need the room.

I think Mexico erected a wall to keep migrant US workers out of their country...

I saw South of the Border on 95 3-4 years back. I guess its still going strong...

Did we get the Depression yet?