David Rosenberg, market guru, has officially declared that the US economy is in a state of depression, and he sees the economic superpowers woes worsening.
On the heels of that bleak forecast, the statistics for existing home sales for July were released and the numbers were ugly. The weak housing market collapsed. Reflecting the worst slump in American history, existing housing sales had plummeted a stunning 27 percent and there's no sign on the horizon that sales will stabilize any time soon.
Citing the period from 1929 to 1932 and the eerie similarities, Rosenberg said, "We may well be reliving history here. If you're keeping score, we have recorded four quarterly advances in real GDP, and the average is only 3 percent." The same happened during the early 1930s stock market rebound of 50 percent after the 1929 crash.
The Great Depression followed the brief economic upswing.
As long as two years ago, one of Britain's top economists predicted a decade-long depression, $45 trillion in debt defaults and unemployment in the US and UK approaching 25% or higher.
During October 2008, economist Fred Harrison told the Foreign Press Association in London,""The massive contraction in demand caused by this 'wealth effect' will condemn the western economy to a decade-long depression."
Read more about the depression gurus
Comment: These gurus seem all very much being in the business of predicting the past. The simple fact is, a fact that each speculator should write on his mirror: you can't predict the future with certainty. Of course, one must have a descartable model in one's head and keep on reforumulating the model as present becomes past and act according to circumstances and take heed never to fall in love with one's predictive model.
The saddest part is that the information was available and visable years ago and yet the media and politians are so busy pointing fingers that most are not helping to contribute to solutions, thus extending the time and severity of the situation. Thank God for the bloggers who do their best to get the word out so that people can take the steps needed: Cut basic living expenses, save money, get out of debt. Yes, it will take years to get through this. Anything this major takes time and diligent effort to correct. With every problem there is an opportunity for those who recognize it. Currently the biggest opportunities are for starting a personal business and real estate investment. We can come out stronger and wiser from the experience. http://inthetrenches2009.blogspot.com
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