Stocks Stomped in Financial Freefall , page 14

Ahh, stocks. The most superficial thing within our economy, yet can act as a signpost for the worlds financial status. I don't post here often, but I am around because I like to keep up with both reported and unreported news.

As far as our financial situation, I thought it might be appropriate to post a piece of information from a friend on another board. It is as follows:

"So, let's see what all the criteria are, for what spurred the great
depression in the US through the 30's (and subsequently through the
world):

Massive national debt, check.
Lack of attempts to manage said debt, check.
Emergency lending to banks via Federal Reserve, check.
Bubble economies caused by irresponsible business practices (eg,
subprime loans for people who obviously cannot afford them), check.
Massive inequality in national wealth? Hellacheck.
Deregulation of banking industry coming back to bite us in the ass?
Check.

It is obvious to me that the people who are in office and those
supposed to be keeping our country running fairly smoothly failed to
ever read a history book. These are frightningly identical
conditions to what spurred the 1930's great depression. The DOW has
already plummeted a bit already, but that just may be a bit before
the storm, like the crash in 1929.

The bailout it's self (back on track, now) is effectively a bandage
over a stump where a limb previously was. Back in 1927 when the
Federal Reserve (it, in it's self, a horrible idea) bailed out the
banks like they just did now, it sent a message: Don't worry, if you
make bad ('toxic') investments, just give them to us, we've got your
lobbist friends here, they'll make us give you the money to buy off
your crappy investments in full. So what do they go and do?
Continue with the practices that caused similar problems in the
1930's and now again here.

Now, here's what the bailout does, effectively. It is a bandage in
the sense that it's going to help for the next three years or so
(sound familiar?). Then, things are going to collapse due to the
national debt being insanely high. Credit dissolved, people couldn't
afford many things, and 25% of the working force was subsequently
laid off as a result of decreased spending and also the disappearance
of short-term, cheap credit on the part of businesses. The market
crashed and there wasn't a single safety net that could have been
created to soften the blow.

By telling the banks they can keep making the same mistakes, and keep
going on like business as usual with the same practices that have
caused these problems in the past, we're just bailing out a boat that's already full of holes."

So that's it in a nutshell. The same mistakes are being repeated, and the (real) depression comes when the bailout money is used up and no changes have been made. The government by that time may not have any more money to help.

What's worse, the middle and lower classes will get the worst of the blow, like it has always been.