October 16, 2008

Will the Great Housing and Stock Market Crash of 2008 have a lasting impact? Will it serve as a catalyst for needed change?

I think everyone would agree that Americans are resilient and optimistic, and that the nation has had to constantly reinvent itself.

But is this time different?

This time, did we really step in it?

If we are to come out of this, reinvent ourselves, reform, change our ways, and move on for the better, what would that entail?

Me? I believe we'll see tough times ahead. But I see this is a catalyst. The crisis that finally made America think about its role in the world, and its problems at home.

We need to stop being the world's policeman, close our military bases, and bring our troops home. We're broke. We can't afford that crap anymore.

We need to radically reform our runaway entitlements programs.

We need to arrest the guilty, seize their assets, reform or destroy the REIC, independently investigate our Congress, Fed and SEC, change our laws, and clean up this mess.

We need to end the debt and credit lifestyle, and teach the importance of frugality, savings, having a financial education, and living within your means.

Hard times are coming, that can't be avoided now that the credit has dried up and the wealth has gone away. But we've seen hard times before. It's the nature of the beast called capitalism.

The question for America, and for the world, is what comes after the crash.

Buckle up. It's gonna suck. But then it gets better. It always does. It hath been foretold.


Anonymous said...

It... depends.

I know that's not a satisfying answer, but there are too many variables in play. Basically, you have a couple of generations of Americans that have been anesthetized by prosperity, security, TV & religion to believe that nothing bad can ever happen to them. The politicians are scrambling as desperately as they can to maintain this illusion.

If, however, the roof falls in - that is, the debt bomb goes off in the next three months - you'll see Weimar Republic-like hyperinflation and unemployment.

Social scientists vary on this, but most identify 12-15% as the threshhold at which you start to see widespread societal disruption - riots, random violence, lawlessness in the form of sexual assault/suicide. At about 25-30% unemployment, you see the formation of organized revolutionary cells.

Ulster in the 80s had an unemployment rate at or near 50%, and daily bombings. Only SAS assassination squads and the fact that other countries nearby provided a pressure relief valve kept things somewhat under control. There would be no such conditions operant in the U.S. in a worst-case scenario.

If we do manage to escape the Great Depression II abyss that yawns at our feet, some will have learned their lesson, and chastened, will push for more fiscal responsibility. But the majority would shrug, and go back to voting for tax cuts in time of war, allocating massive resources to retail outlets rather than infrastructure, and worshipping at the altar of self-indulgence and selfishness that has made the U.S. an object of scorn and revulsion worldwide...

Anonymous said...

I wrote an article on the history of banking and corruption entitled "Barreling Towards Babylon." As the author, I highly recommend it! ;)

Anonymous said...

I'd say no, people are funny, and by funny I mean stupid.

Anonymous said...

I'm hopeful with you Keith, but I'm afraid Murika will find a way to screw this up. There will be a lot of foot stomping by the prols and I don't trust Obama (or McCain or Biden and definitely not Palin!)to tell us the truth. Teach your children well folks.

Anonymous said...

It always gets better because there is always a "next generation" to create something from the wreakage of those who came before. That's why these socio-economic cycles mirror the lifespan of a generation. We are not special and it is not different this time, period.

Anonymous said...

It will have a lasting impact because it helped get a socialist elected president. This is not a Republican rant - McCain would have been bad too, but this will be a particularly nasty flavor of "bad".

What you are about to have is a president with heavily socialist leanings, coming into the presidency at a time when people believe that greedy financial fat cats, and not the government (or God-forbiden themselves), are responsible for this disaster.

President Obama will be all-too-happy to address their concerns, and with a Democratic congress he will push through legislation that socializes major sectors of our economy in ways that will fundamentally damage this country for decades, are most probably put the final nail in the coffin for the American Empire.

THAT, my fellow Americans, is what is coming. 232 years, it was nice while it lasted. :(

Anonymous said...


Anonymous said...

The big boy's are after the kiddies piggy bank, and Obama will say we all must sacrifice when the bottom comes. It doesn't look good when considering the way things went after 1929.

Problem is, this isn't my grandfathers depression, when the common folk then were more alike each other than not. The only thing we have in common with each other now is that we are all simple-minded megalomaniacs.

Debt is the problem and "creating" more debt won't solve the problem. Isn't the definition of insanity is doing the same wrong thing and hoping for a different outcome(?) - or is it just stupidity(?) - arrogance(?) - delusion(?)

Why would you think Keynesian economics can work for you when you've been in Reaganomics for two decades?

I'm guessing Obama is going to try to get people working with government programs and so paychecks are in the economy again, but that could just turn into another debt creating "solution", unless it produces needed long-term assets like, decent paying employment and tangible wealth.

FDR finally got things moving again when 11 million men went back to work for the US government, as soldiers in WWII, making weapons got production going again too.

Whomever the next president is, he/she/it, I hope, better have have something going-on besides pawnmanship.

Anonymous said...

Yes; No; People will be pissed but the elite will still believe that they can have anything they want.

Anonymous said...

It will get better, for some at least. How many of us will be alive to see the turnaround?

Anonymous said...

I found this article linked to in another blog.

"It’s different this time?"
More than 85-90 percent of Americans now say that we are on the wrong track, but many if not most still believe that the history of other nations is not relevant

-- that the United States is unique,

chosen by God.

So did all the previous world economic empires: Rome, Spain, the Netherlands (in the maritime glory days of the 17th century, when New York was New Amsterdam) and Britain. Their early strength was also their later weakness, not unlike the United States since the 1980s.

There is a considerable literature on these earlier illusions and declines. Reading it, one can argue that not only imperial Spain, maritime Holland and industrial Britain, but in fact ALL empires, shared six vulnerabilities as they declined:

1.A sense by the people that things are no longer on the right track

2.Intolerant religion works its way into politics,

3.Military overreach leads to expensive, demoralizing, bankrupting wars

4.Economic polarization (difference between rich and poor just doesn’t go up, it skyrockets,)

5.The rise of finance displacing industry (the empire derives income from moving money around, rather than producing products for sale,) and

6.Excessive debt.

So too for today’s United States
"It’s different this time?" It’s never different. It’s always the same."
Sound familiar HP'ers

That pretty much sums it up. I think that we are going down, and going down hard, we will all be affected, and there's not a damn thing anyone of us can do about it. History ALWAYS repeats itself!

Anonymous said...

Everyone has pretty much accepted that we're in recession or will be very soon. The question is how bad will it be? I think it will last a year at least and we'll see official unemployment top out around 11%.

Unknown said...

Hello William Lyman here with http://wrlyman.com and I would like to address the fact that everyone is talking about change. Also they are saying that this coming election one of the candidates is going to bring change to the nation. I think that is real crap excuse my french. When you need change anywhere it has to come from yourself. We all sit here and blame the Politicians for not bringing change to us when we are not willing to change the way we live. I don't know the statistics but I would have to say that is very high the fact that so many people in this country are living beyond there means. I was in the Mortgage Industry for a long time and so many people came to me to get a mortgage and would say my Realtor said I could buy this house even though I don't make enough income. I always advised them that doing two loans or three on a house they can't afford is not the right thing to do but they were convinced that the value of the house would double before the adjustable rates changed. That is a perfect example of the way we live here. If all those people think like that how is one man going to change them. Also they blame the Mortgage industry and Wall street and everyone else but why don't we put the blame on us the greed is why we have lost all our homes. I call it the LasVegas syndrome. These are issues that we should address as an Americans not blame the people we elect. In my opinion we must create a new Revolution and it must consist of changing ourselves and living as our countries founders meant us to live. GET WITH IT MAN

Anonymous said...

"...stop being the world's policeman..."???

You must be joking. As we spiral down into Great Depression II, that will be the best opportunity for many.

Anonymous said...

Words from Chairman George Soros:

"US consumers will not be able to play the role of the engine of the world economy if world recession occurs. The US administration must stimulate the demand.

“Since there is global warming and energy dependence threatening the USA, the next administration will need to direct all development programs on the energy saving, the development of alternative energy and the construction of green infrastructure,” Soros said.

The United States and a part of Europe will have nationalized banks and huge debts. China will become the new global financial empire.

“The USA’s influence has already begun to decline. For the past 25 years, we have been running a constant current account deficit. The Chinese and the oil-producing countries have been running a surplus. We have consumed more than we produced. While we have run up debt, they have acquired wealth with their savings. Increasingly, the Chinese will own a lot more of the world because they will be converting their dollar reserves and US government bonds into real assets. The power shift towards Asia will occur as a result of the sins which America committed during the recent 25 years," Soros said.

I think Obama is tuned in to Soros' Red Book on economy!

Anonymous said...

I have a hard time imagining what we will do, even though I have many old (1880-1935 type)skills. There is the real possibility of a total credit meltdown, and that's the rub. Without credit, we will be out of money in the blink of an eye.

What do we really know how to do?

We will have skill swaps. We will learn how much we really need to eat to stay healthy, let alone alive. We will know reality at last.

Anonymous said...

Much as JFK said words to the effect that we should go to the moon and back by the end of the 60s, the next president, whether it be Barack or John, should say we (the USofA) must become not only become energy independent, but the number one exporter of some energy product, such as perhaps synthetic diesel from coal.

We could do that. It will take something of that magnitude to save us.

Anonymous said...

This is only at 50% sell-off so far. From Oct 1929 to July 1932, the Dow went from about 400 to below 40 (90% sell off). For us that would me the DJIA going below 1500 or so.

I don't know if there is more pain to come (feels like it since this is still very early days for this crash). We still have lots and lots of bad earnings reports to come out, more unwinding of margin debt, and more ugly boils to lance.

I don't see any sign of capitulation yet. That's when the last coke sniffing gambler finally drops his dice and gets in the soup line and the first honest entrepreneur steps up for a loan with a plan to make money with a useful (non-luxury) product that will be made by those unemployed masses in the US. We're still in Credit-Card Never-Never land.

Like I said last year, if you're out of work, start up a business as a repo man or collection agency. You will never be for lack of work again.

Anonymous said...

What the hell are you talking about 'catalyst for change'?
The dude from the National Urban League just told us we need more subprime, not less.

Unknown said...

"We need to end the debt and credit lifestyle, and teach the importance of frugality, savings, having a financial education, and living within your means."

Get serious. With every company spending ad dollars to portray consumerism as "the good life"?

There will always be 80% of the population that is clueless, and 20% who live within their means and retire decently.

Anonymous said...

Here in HB Ca. I'm seeing more worry from some of the older curmudgeons who frequent the small cafe's and eateries.

This portion of the upper 20% has been largely insulated from what's happening now in the economy - but no longer as their retirement savings and stocks take a nose dive.

The younger couples who recently got in to houses here are really hurting.

Change is coming swiftly.

Anonymous said...


LOS ANGELES (Reuters) - Playboy Enterprises Inc, which publishes the world's most widely read adult entertainment magazine, will stop making DVDs to save about $12 million a year, and focus on distributing its content online, the company said in a regulatory filing.

Shutting its DVD operations will cost 80 jobs and $2 million in restructuring charges, according to the filing on Wednesday with the U.S. Securities and Exchange Commission.

Anonymous said...

You're quoting straight from the good doctor himself. The U.S. needs Ron Paul right now not the 2 disasters that are running. You think either of these fools understand "living within your means"?

Buckle up is right. This one's gonna hurt no matter how "protected" you think you are.

Anonymous said...

First, for it to truly be there, i.e., the great housing and stock market crash of 2008, it must be acknowledged.

Second, when I have people telling me just yesterday that now is a great time to buy a home at what are still bubble prices, then nothing has been acknowledged and nothing has been learned.

Finally, when regular citizens continue to be willing to give up their Constitutional rights and support taking money from one group of people in order to maintain their meager status, nothing has been learned.

No one will learn until there is unbearable pain. Unfortunately, most of my "countrymen" seem to be O.K. with simply shifting the pain onto others and/or future generations.

Anonymous said...

Absolutely. It will result in socialism as robin hood in disguise. And your support of Obama will help it along. You must have never truly been a Ron Paul supporter, because there is nothing in your rhetoric that is reflective of his viewpoint. Read Peter Schiff and learn.

Anonymous said...

This is the change we're going to have. People are learning that irresponsible and selfish behavior is rewarded by their government and there will be an increase in it. Bailouts for everyone.

Look at this article about homeowners who believe they're entitled to assistance. And they're upset because their "investments" underperforming.

I particularly like this:

''It's going to take 10 years to recover that money,'' said Miller, 28, a mortgage broker. ``The purpose of buying a home is tax deductions and building equity, and when you are $100,000 behind you're throwing that money in the toilet.''

Notice how the scumbag mortgage broker doesn't include "having a place to live" in his list of reasons to buy a home.....

I'm down about 30% on my 401K - that defeats it's purpose - I need compensation.

I also would like a bailout for the money I lost on slots the last time I went to Vegas because the only reason to play slots is to win and, yet, it turned out badly for me.....

America is doomed because there is no longer any sense of personal responsibilty.


born to lose said...

I can't imagine how much more people are going to complain when unemployment soars.

We will look back on 2008 as part of the good old days.

The Economic Smackdown has'nt hit Joe 12 pack yet.

Get ready for everybody singing the blues, before you see any comeback by the American people.

We all must suffer, but misery is a choice.

Anonymous said...

If Obama wins things will get uglier than any of you people can imagine. Say good bye to this country. And I don't mean that in some over the top tinfoil hat kind of way. I mean the USA that we know today will be gone.

Instead it will be replaced with an ACORN/Chicago style of corruption from which we will never recover. Look at Mexico and Russia for a preview of what America will look like in 2015.

Anonymous said...

if 90% of people are selling America (ie are pessimistic about the future) then I'm buying as much as I can. Fortunes are made during times like these. I'm buying stocks. I'm buying real estate, just closed on a 3/2 rental for $85K. $85K freaking thousand, for a house that was going at $215K in 2005. This kind of sale comes along once in a lifetime.

You have two choices.

1. Cry like a little bitch about how awful everything is and wait for someone else to make your life better.

2. Make your life better yourself and stop relying on the govt to fix everything wrong in your life.

Choice is yours folks.

Anonymous said...

Been lurking (mostly) for a long time. Sometimes I agree with you, and sometimes I don't (BIG time).
And I've actually been losing confidence (in your opinions, methods, etc) recently.

Just wanna say...

This post makes me like you again.

You're dead-on 100% correct.
You pretty much said it ALL -- very concisely, and it appears that, even the expat that you are, you still give a shit.

Pretty cool, overall, at least the way I'm thinking.

'nuff said. Sorry to ramble.

Keep up the good work.

Anonymous said...

To william layman :

I'm sorry but I think you better take another look at yourself when you try to blame borrowers for the way that Wall Street,Realtors, and
Loan Agents set up these dumb people for a big fall .

You stated that the borrowers couldn't afford the loan yet you put them in the loan . Your a piece of shit ,so keep trying to
blame dumb people for the fraud you helped them commit . Don't tell me you didn't help them ,or at least you closed your eyes to
the liar real estate sales people and borrowers.
It was your job to screen people,but you failed because the money was good and everybody else was doing it .
Don't ever try to preach what other people should do until you look at the crap you pulled .And don't give me a bunch of crap because your lying dude . You were part of the problem dude .Redeem yourself and give back the commission on every bum deal you made . Yea right, the deal where you knew a maid didn't make 150k a year .

Anonymous said...

"...as they declined:..."

-wrong track
-religion into politics
-military overreach
-concentration of wealth
-finance displaces industry
-excessive debt


Anonymous said...

We're the complacent retards about to elect a guy who voted for the bailout bill, thinks the FED is a swell idea, and isn't talking about the derivatives time bomb. Prove me wrong here, but change won't happen while we still have the ability to blog on sites like this.

Miss Goldbug said...

Frugality will be in style.

Here's a great video of a 91 year old woman who grew up during the depression cooking meals from her childhood, and telling little stories as she prepares them.

People will be forced to simplity their lives and will have to make do with less.

Youtube: Depression Cooking with Clara

Depression Cooking Ep:1

Depression Cooking Ep: 3 - Poorman's Meal

Depression Cooking Ep:2 - Egg Drop Soup

Anonymous said...

Arch Stanton said...

But the majority would shrug, and go back to ...

Very well said. I am hoping for the revolution...

Anonymous said...

We Americans are a strong, optimistic and resilient bunch. Never, ever, ever, ever bet against America. Sure tough times will be ahead for our country, but we are a strong people and we will become stronger, wealthier and even more optimistic because that is the American way!

Anonymous said...

Anonymous Skaven said...

It will have a lasting impact because it helped get a socialist elected president. This is not a Republican rant - McCain would have been bad too, but this will be a particularly nasty flavor of "bad".

What you are about to have is a president with heavily socialist leanings, coming into the presidency at a time when people believe that greedy financial fat cats, and not the government (or God-forbiden themselves), are responsible for this disaster.

President Obama will be all-too-happy to address their concerns, and with a Democratic congress he will push through legislation that socializes major sectors of our economy in ways that will fundamentally damage this country for decades, are most probably put the final nail in the coffin for the American Empire.

THAT, my fellow Americans, is what is coming. 232 years, it was nice while it lasted. :(

October 16, 2008 2:11 PM
Anonymous Anonymous said...

I don't get you partisan Republicans and Democrats. You say both candidates are bad but the other guy is worse? I have news for you pal, both candidates will socialize America no matter what. Under the so called fiscally responsible Republicans, our national debt went from 5 trillion dollars to 11 trillion (AND that is NOT counting the junk mortgages and securities that Uncle Sam just bought from the banks, if you count that, our national debt is now easily 17 trillion to 20 trillion dollars) and the biggest expansion of government in history. Oh I forgot, he is a conservative. Vote both parties out! Vote both of them out! We need independent thinking people like Ron Paul, Peter Schiff, etc...

edd browne said...

Lasting impact ???
The Endtimes approach !
Just print money until Rapture.

For some "prominent" folks,
this is not a joke.

Anonymous said...

I see only reason for pessimism. The kleptocracy is extremely advanced.

Congress, the president and both presidential candidates are not looking honestly at what went wrong, or what will happen to the financial markets when $700 billion extra in debts are sold. There is no extra money to buy bonds, and money diverted from other investments will make those other investments tank.

Our manufacturing base has been decimated, and most politicians parrot the old line about protectionism being bad (because they are paid to say that) without noticing the theory of comparative advantage does not apply.

We only have enough productive jobs to employ maybe 25% of the work force. Deleveraging will take the rest.

As others noted, the newly diverse USA will be a powderkeg. Revolution will result, but the results won't be so nice as the USA's original revolution. The uppercrust has been horribly corrupted and too much of the lower crust is used to Mexican style government.