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This recession could easily tip into a depression
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This Link is located in the Public Channel Housing Bubble and Bear Links.
Posted by ian 1 year 249 days ago (timesonline.co.uk). Views: 80
Tags: great depression recession economics housing bubble |
| Related Tags: finance wall street business stocks video politics infesting |
This guy is old enough to remember the latter stages of the Great Depression.
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The present recession has some characteristics which make me think that it will be a relatively long one. The recession is centred on banking and property. In an ordinary recession, one has to wait for consumers to regain their confidence, which, in turn restores the confidence of business. Now one has to wait for the bankers as well. At present, banks are too anxious even to lend to each other, let alone to expand consumer credit or business loans.
This recession has produced a succession of nasty surprises. Things are always proving to be worse than anyone had expected. Last week the crisis spread to the American mortgage giants Fannie Mae and Freddie Mac, created by President Roosevelt in 1938.
These are far bigger than the investment bank Bear Stearns and Northern Rock put together. They have brought the crisis from the level of billions of dollars, to the level of trillions. No doubt they will be saved because the US would be bust if they went down. But you cannot save six- trillion-dollar institutions without suffering on a large scale.
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