The $64 Trillion Question: How Does the U.S. Get Out of Depression?
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"The financial turmoil is ongoing," I heard Fed Chairman Ben Bernanke say on the TV that morning, July 8, 2008.
He was outlining plans to deal with the mortgage foreclosure disaster.
Meanwhile, T. Boone Pickens was on Squawk Box on the financial channel heading for a news conference, telling listeners to go to tboonepickens.com. Why? He has a plan to solve the oil crisis!br>
First such plan I have heard about.
Obviously, financial gurus were beginning to show concern, and to seek changes in the system. I marked in my planner: "This may be the day the country started to turn it all around."
I got a list of store closings that was eye-opening about the depth of the economic morass:
Ann Taylor, closing 117 stores; Eddie Bauer, 27 plus; Cache, 23 stores; Lane Bryant, Fashion Bug, Catherines, 150 stores; Talbots, J. Jill, 100 stores; The Gap, 85 stores; Foot Locker, 140 stores; Wickes Furniture (going out of business) all its stores; Goodbye Levitz, going out of business, closing all 76 stores; Zales/Piercing Pagoda, closing 55 stores 50 kiosks; Disney, may close 98 stores;
Home Depot, 15 stores to close, idling 1,300; Macy's, 9 stores to close; Movie Gallery, shuttering 160 stores as part of reorganization to exit bankruptcy; closing 400 Movie Gallery and Hollywood Video stores;
Pacific Sunwear, closing 153 Demo stores; Pep Boys, shutting 33 stores; Sprint Nextel, shutting 125 retail locations, laying off 4,000;
Bombay Company, 384 stores closing; KB Toys, 356 stores; Dillard's, six stores; Ethan Allen, 12 stores to close; Wilson's Leather, 158 stores, J.C. Penney, Lowe's and Office Depot are scaling back, etc., etc., etc.
Those are just stores, but their closing will be more visible to the public than the shrinking industrial jobs.
My friend, the financial wizard from Florida, who I have nick-named Dow Jones after a character J.P. McCarthy created on a Detroit radio station years ago, e-mailed: "I knew about most (but not all) of these situations via the Wall Street Journal.
Dow Jones wrote: "It is my opinion that we are not now in a "recession", but a genuine full-blown depression .. and it is without precedent in that we have a depression coupled with inflation .. the cost of fuel has resulted in higher food prices since delivering the food to the stores as become so costly .. we have unemployment at 5.6% which is not tolerable, we have the U.S. dollar weak .. so weak that it worth only 50 cents against the Euro .. we have our domestic auto makers on the brink of bankruptcy .. and there is no light at the end of the tunnel.
"As previously indicated we are spending 1-trillion, 250 million each and every year for the "war" in Iraq, that nobody is going to "win," it will forever be a stalemate, with nobody winning as in W.W.II .. and it goes on and on.
"This 'war' has contributed to the decay of our infrastructure: Our roads, highways, water plants, bridges, law enforcement, national parks, schools, medical care. I don't now how long .. if ever .. this country will heal and rebound from this debacle.
"If our economy heals and survives, it will be in my frequently worthless opinion 12-months at the shortest .. could be 30 months until things get back to where they were, if ever that happens.
"The banks and lending institutions in my opinion will Never be the same. The decade of "easy money" is behind us. These institutions now must pay the piper for their lousy misdeeds, lending money to unqualified people. Falsifying income, inflating the appraisal on the homes, etc., etc.
"The value of our securities have lost more, than my father and mother's entire estate upon their death.
Right now, and the foreseeable future, I am investing in nothing, and accumulating cash. Period."
I guess we must acknowledge how bad thing are before we can begin to address the problems. Thank God for those who have the courage of leadership to admit the problem and to venture forth with ideas for change.###
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"The BUZZ" - Read Feedback From Readers! |
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markt Says:
On July 09, 2008
at 05:52 AM
Dave,
I think it all revolves around fuel prices. If gas, or gas equivalents, where to come back down to $2.50, all would be good again. I think it will happen. Don't get too depressed! |
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ameritrust Says:
On July 09, 2008
at 06:32 AM
Another home run. US arrogance is one of the main problems. The world has changed!
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oj Says:
On July 10, 2008
at 05:21 PM
Editor reviews all comments
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%OJ says:
On July 10, 2008
at 06:14 PM
Dave has the right perspective on this topic.
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cindy Says:
On July 14, 2008
at 08:35 AM
I agree, we are in deep do do, it comes at us know from almost every direction. food, gas, utilities, etc...I have remained strong through this economy remaining positive at least publicly at all times. Just can't fake it much longer. Going to Australia this fall, am curious what their opinion is of us now.
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Dave Rogers |
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