Mega Bear Duet
December 1, 2008 9:55 am

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Maybe Your Social Security Payments Weren't Such a Bad Investment
December 1, 2008 8:16 pm

By Nathan Newman, TPMCafe

Yeah, the stock meltdown of 401Ks is making the Bush-McCain proposals for social security privatization look idiotic, but the Wall Street Journal of all places has a nice quantification of how valuable social security is for most families:

The U.S. government pledges that you will receive those payments, adjusted for inflation, for as long as you live...This kind of bond has a name: an inflation-adjusted immediate annuity...The implicit bond of Social Security makes up about 40% of the total assets of the average household on the verge of retirement...

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Stock Chartist
December 1, 2008 10:32 pm

There's not more to add to what has already been said by many others:

* 25% decline over 12 trading days followed by
* 18% gain over 5 trading days (largest in over 70 years) followed by
* 8.93% decline in single day; largest decline for first day of the month since 1930

Remember when commentators would get on the air and proclaim that "next years the market will be up (down) 15%" and we'd all think to ourselves "market going up (down) that much would be nice".

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The Republican Presidential Recession Record
December 1, 2008 10:42 pm

Jeff Madrick

Here's the count. You decide.

Dwight Eisenhower: 2 recessions
Richard Nixon and Gerald Ford: 2 recessions
Ronald Reagan: 1 recession
George H.W. Bush: 1 recession
George W. Bush: 2 recessions

Here are the Democrats:

John Kennedy no recessions
Lyndon Johnson: no recessions
Jimmy Carter: one recession, the briefest of the era
Bill Clinton: no recessions

Eight to one: As I say, you decide.

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Today is Not Like 1929! No, It's Worse
December 2, 2008 7:37 pm

After a speech in Austin on Dec. 1, Federal Reserve Chairman Bernanke took questions from the audience. Here's an excerpt from the AFP story, which reported his response:

Federal Reserve chairman Ben Bernanke said Monday the current economic situation bears "no comparison" to the much deeper crisis of the 1930s Great Depression.

"Well, you hear a lot of loose talk, but let me just ... say, as a scholar of the Great Depression -- and I've written books about the Depression and been very interested in this since I was in graduate school, there's no comparison," Bernanke said in a question period after an address in Austin, Texas.

Bernanke cited "an order-of-magnitude difference" in the current situation compared to the 1930s. "During the 1930s, there was a worldwide depression that lasted for about 12 years and was only ended by a world war," he said. "During that time, the unemployment rate went to 25 percent, at least, based on the data that we have. The real GDP (gross domestic product) fell by one-third. About a third of all of the banks failed. The stock market fell 90 percent."

Bernanke said the situation at that time represented "very difficult circumstances," because "we didn't have the social safety net that we have today. So let's put that out of our minds; there's no -- there's comparison in terms of severity." [AFP, 12/1/08]........

.......

Q: You say that the coming stock crash will lead to a depression. If so, wasn't the 1987 crash wrong? The economy has gone on to record activity and new highs.

Bob Prechter: Not all crashes lead to depressions. The 1962 crash, for instance, which was Primary wave 4 of Cycle wave III. The 1987 crash was in almost the same position as that one: Primary wave 4 of Cycle wave V, although because of its large price movement, I didn't realize it at the time. That corrective pattern did lead to a recession, though, in 1990-91. But the coming crash will be different. It will be much larger, part of a grand Supercycle bear market.

Q: What time period does the current long-term pattern in the markets have the most in common with?

Bob Prechter: The 1720 peak. That's when the investment manias associated with the South Sea Bubble in England and the Mississippi Scheme in France ended.

Q: Will the bear market be similar to the one that followed that peak?

Bob Prechter: Similar, yes, but while the bear market of the 1700s produced 64 years of a zigzag pattern, a very simple down-up-down shape, this one is likely to be a sideways pattern, which will manifest as plummeting major declines punctuated by tremendous rallies back to near or slightly past the old highs. If you take a look at the Dow Jones Industrial Average chart from 1966 to 1982, you can get an idea of what I'm expecting. But it will occur on a larger scale.

Q: What about the accompanying economic turmoil? How quickly will depression arrive?

Bob Prechter: Because the economic changes that are occurring are of such a very large degree, they will occur in a fashion different from the slam-bang progression of typical recessions of the past 50 years. I think the economic expansion in force since 1991 is ending, and we will then have another contraction, which is deeper than the last. After it's gone on for a while and economists actually recognize it, you will undoubtedly hear continual reiterations that it's just a "mild recession." Any recoveries will be met with fanfare and assurances that a new boom is under way. But any bounce will just be a bear-market rally against the larger trend. When the bottom is reached, the economic devastation will be front-page news, just as it was in 1933.

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"Prop 8 - The Musical" starring Jack Black, John C. Reilly, and many more...
December 3, 2008 10:48 pm

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Untold Story of Election 2008: The Death of the NRA
December 4, 2008 10:52 pm

By Alexander Zaitchik

Last month, voters across the country took a cue from the late Charlton Heston and pried the assault weapon from the NRA's cold, dead hands.

Although the gun group unleashed everything in its arsenal to defeat Barack Obama and dozens of down ticket gun-control candidates, it lost by a margin as historic as the war chest it opened in an attempt to convince voters that Democrats were mortal enemies of the Second Amendment. Despite expending nearly $7 million in a national fear campaign, NRA-endorsed candidates lost 80 percent of their races against gun-control candidates. More than 90 percent of candidates endorsed by the NRA's nemesis, the Brady Campaign to Prevent Gun Violence, won their races. If 2008 was, in the NRA's own words, "arguably the most important year in its history," then the election results suggest that the gun group is arguably the most overhyped and impotent special-interest lobby in the country. The NRA even got its chamber cleaned in its home state of Virginia.....

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Exit Interviews
December 5, 2008 7:30 pm

Eschaton - On Wednesday, Jon Stewart talked about interviewers tiptoeing around Bush's epic fail, trying to "delicately assess whether this president realizes just how badly he has fucked this thing up."

Hard to say something like this:

"By pretty much any measure, from polls to surveys of historians to editorial page opinion to measurable economic performance, your presidency has been the least successful in the postwar period, and perhaps since Reconstruction. How did this happen?"

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US bank bailout holdings down $8 billion
December 5, 2008 7:35 pm

The government mounted a vigorous defense Friday of its massive bank bailout, responding to an Associated Press analysis showing that stock in the program intended to eventually earn taxpayers a profit has lost almost one-third of its value - nearly $8 billion - in barely one month.

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