Its Official : The Crash ot the U.S. Economy has Begun

Its Official : The Crash ot the U.S. Economy has Begun

globalresearch.ca

It’s official. Mark your calendars. The crash of the U.S. economy has begun. It was announced the morning of Wednesday, June 13, 2007, by economic writers Steven Pearlstein and Robert Samuelson in the pages of the Washington Post, one of the foremost house organs of the U.S. monetary elite.

Pearlstein’s column was titled, “The Takeover Boom, About to Go Bust” and concerned the extraordinary amount of debt vs. operating profits of companies currently subject to leveraged buyouts.

In language remarkably alarmist for the usually ultra-bland pages of the Post, Pearlstein wrote, “It is impossible to predict when the magic moment will be reached and everyone finally realizes that the prices being paid for these companies, and the debt taken on to support the acquisitions, are unsustainable. When that happens, it won't be pretty. Across the board, stock prices and company valuations will fall. Banks will announce painful write-offs, some hedge funds will close their doors, and private-equity funds will report disappointing returns. Some companies will be forced into bankruptcy or restructuring.”

Further, “Falling stock prices will cause companies to reduce their hiring and capital spending while governments will be forced to raise taxes or reduce services, as revenue from capital gains taxes declines. And the combination of reduced wealth and higher interest rates will finally cause consumers to pull back on their debt-financed consumption. It happened after the junk-bond and savings-and-loan collapses of the late 1980s. It happened after the tech and telecom bust of the late '90s. And it will happen this time.”

Samuelson’s column, “The End of Cheap Credit,” left the door slightly ajar in case the collapse is not quite so severe. He wrote of rising interest rates, “As the price of money increases, borrowing and the economy might weaken. The deep slump in housing could worsen. We could also discover that the long period of cheap credit has left a nasty residue.”

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Credit for new home buyers will be increasingly harder as the economy will get worse .

globalresearch.ca
(visit the link for the full news article)

While I tend to agree with you, OP, this article was written over a month ago and does not constitute breaking news. I would put it in the Global Meltdown Forum.

That being said, my fear is that the Fed is too good at playing the shell game with domestic and international markets and will inevitably keep postponing this event to occur.

The market was ugly yesterday, but today people are buying. Meanwhile, houses are being lost and most financial institutions are on big trouble.

Only time will tell..

Originally posted by TruthWithin
...this article was written over a month ago and does not constitute breaking news. I would put it in the Global Meltdown Forum.

Agreed.
Moved.
.

Hey, This maybe true, but I follow the US market and even tho the Dow seems to be loosing major percentages, it always seems to try to rise back up there.

Stocks Jump on Oil, Confidence Boost

It`s hard to say what is really happening, maybe time will tell...

Yes, but doesn;t anyone find it odd that oil prices fell DIRECTLY after the Fannie Freddie crisis? And now they fall again the day after the DOW loses 240 points?

This is no coincidence. It is all about spin. The consumer confidence reports are horrible, but because they are barely abve the 10 year lows people are looking at this like it is good news. Sadly, this slight bump is probably die to the Economic Stimulus checks...wow, some bump.

So far, everything the Fed has predicted has been false.

They said the housing crisis would be over by the end of 07. Ooops.

reply to post by Grinder


Remember that the Dow was once over 13000 points. There has been a 18% drop since then. A bit more than a "correction" in my book.

reply to post by Grinder
Bennigan's Shutting down all of their corporate-owned locations nationwide after filling for bankrupcy is piece of economic gloom..cbs2chicago.com...

reply to post by TruthWithin


The DOW was at 13,400 in January .. it's record level was around 14,400.

It's been down to 10,900 since then.

Essentially what the article is talking about is that wealth is disappearing.. when Financial stocks go from $70 a share to $4 a share, massive amounts of money have been lost..

Most news outlets down play the problem of disappearing wealth, CNN however did host a news story about the countries top preforming Fund managers and their own crisis .. the average Fund being down over 40% ..

That's a massive loss..

And cities and states, as well as the federal government are hurt directly. As are individuals who held Low Risk Investment Mutual Funds, because they where heavily invested in Financials. Go figure the luck on that. Average mutual fund being down -30%, you can check your brokerage companies websites for a full detailed list of operating Funds and their +/- loss and gains from inception, ytd and quarterly. As well as your own profile of course.

It being to late to do anything about it, you should at least understand why or how your money disappeared.

The article is not "alarmist" by any means, it is only telling the situation how it is -- massive wealth loss = operating cut backs = recession.. we all know this, it's hardly amazing news.

Might come off as alarmist simply because we are not used to such a frank description of how things are, and are going to be.. what with Bush telling us the Economy is "strong" and masking our negative GDP with fictitious numbers.

Your number one priority should be to pay down personal debts, stop incurring debts, cut up credit cards and understand your investments intimately because if you understand where the problems lie, you can alter your profiles to better suit your risk level (financials going from lowest risk to highest risk), understand your rights as an investor and so forth.

Also don't assume that your money gets top priority, in the past pensions funds where sacrificed to prop up the economy, it can happen again.

And lastly don't buy into hysteria, your money is still safe in the banks, much safer then cash. Hysteria only makes things worse for you and others around you.