Archive for the ‘Depression’ Category
50 trillion dollars gone poof
According to an Asian Development Bank report, the total loss from this crisis will reach 50 trillion dollars, almost equal to the annual GDP of the world. With 50 trillion you can give everybody in earth $8000 or buy enough burgers to cover 10 times the distance of earth and sun, or give a BMW 3 series car to every household on earth. You could also buy enough rice or wheat or corn to feed for the lifetime of every human on earth (assuming an average consumption of 350kg/year).
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZ1kcJ7y3LDM&refer=worldwide
The value of global financial assets including stocks, bonds and currencies probably fell by more than $50 trillion in 2008, equivalent to a year of world gross domestic product, according to an Asian Development Bank report.
Asia excluding Japan probably lost about $9.6 trillion, while the Latin American region saw the value of financial assets drop by about $2.1 trillion, said Claudio Loser, a former International Monetary Fund director and the author of the report that was commissioned by the ADB. The report didn’t give a breakdown of asset declines in other regions.
Here is the full study.
When do we say the market bottomed?
Here is a list of 10 things marketwatch considers to be the signal of a bottom. It is an interesting reading, though I don’t accept all their conclusions.
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A significant (more than 10%) one- or two-day drop in the market.
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Timothy Geithner is replaced with Paul Volcker.
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The 100th day of a bankruptcy by General Motors Corp.
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Gold at $2,000 an ounce.
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The Dow Jones Industrial Average changes more than two names at the same time, and/or adds names to increase the overall number of stocks in the index.
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New York Stock Exchange daily volume drops to 1 billion shares for 30 sessions in a row. "Sometimes you just need everyone to give up to make a bottom," the analysts reasoned.
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One million jobs lost in a month.
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The market starts to rally on bad news.
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Stock market favorites see 15% to 20% declines. When standout companies — such as Wal-Mart Stores Inc.) — "get clobbered" you’ll know a bottom is near, they said.
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CNBC goes off the air.
Job losses getting severe
Today’s Wall Street Journal reports on the bad job data released by Bureau of Labor Statistics today. 
Executive Summary
The economy has shed 4.4 million jobs since the recession began in December 2007
Nonfarm payrolls, which are calculated by a survey of companies, fell 651,000
Unemployment rate rose from 7.6 to 8.1 percent
2.9 million people were unemployed more than six months
Average hourly earnings increased a modest $0.03, or 0.2%, to $18.47
Service-sector employment tumbled 375,000
S&P Index for 137 years
Here is the regression trend on S&P index. However, take this data with a pinch of salt, as S&P 500 didnt exist back in 1870 (it is just an extrapolation of a trend) and most of the American bluechips came after the Long Depression of 1870s.
Companies came during or end of Long Depression:
Standard Oil (1870) – mother of most oil companies today, including XOM, Goldman Sachs (1882), AT&T (1880-85), J&J (1887), GE (1890), JP Morgan (1895), Ford (1903)
Still, this chart has some insight.
Source: Dshort.com
Special Report – Recession impact on various sections of the society
Executive Summary
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82% are job loss are among men. Women are going to pass men in workforce for the first time
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West is hit the most compared to North east and MidWest
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Young, blacks and Hispanics are hit more in the recession
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Artists face a far worse time than other professions though their unemployment rate is not different from average population
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Uneducated lost more jobs than educated workforces, unlike the previous 2 recessions.
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With various government policies and market movement, misery could be spread to everyone, including rich
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Portland and St. Louis rank among the unhappiest cities in the US
Short story: Max Claus goes to New York
I have always wanted to do fiction, but never got around to complete my dreams. Except for a small science fiction that wrote in the college, I have never finished any of my fiction works. I have three novels in various stages but got into writers block every time. This time, I converted an unpublished novel into a short story and I was particular to release it today. Since it was converted in a hurry, I didnt do a lot of proofreading. If you like or hate the story, do send me a mail.
A Series on Depression – Tulip Mania of 16th Century Holland
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Though it is not exactly a Depression, it is one of the major economic bubbles in the modern history. It had all the elements of a bubble – frenzied people buying an asset in the hope that some other person will pay them higher than what they paid. At one point around 1637 it went so crazy that one Tulip bulb cost more than 12 acres of land and 20 years of a worker’s salary.
This crisis is interesting in that it hyper-inflated a very silly object (a flower) and well analyzed over the centuries and it has a special place in economic history given some of the innovations it brought like the futures contracts. As we will see later in the article, a lot of information about this crisis in the traditional media is more hype than truth and many modern researchers debunk the folklore comparing this crisis to major depressions. This crisis was confined mostly to a small duration around January-February 1637, and didn’t have a lot of serious effects on Dutch economy, contrary to what a lot of traders believe.
A Series on Depression – Introduction
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What do you normally expect in a recession? A “Grapes of Wrath” style dust bowls and people in rusted wagons shuttling all across the highways? People waiting in the soup lines and families going out of heat in the winter? People near the end of the world? Well, those are not the only pictures we will see.
Look at 1930s movies – how often do you find signs of depressions in it? In fact, some of the best and grandest of movies came during that period in every genre ranging from slapstick comedy to horror movies, romantic comedies, epics and serious social movies. By 1935, 50% of Americans owned automobile, the first of freeways came in (1939 – Pennsylvania turnpike) and concept of motels exploded 3 fold in a few years, as more Americans began to take vacation inspite of depression. They had fun by inventing so many past-times like Monopoly, miniature golf, swing dance, and reinvented activities like Jigsaw puzzle etc. Society held together and people won their crisis with hope. How did that happen?
A Series on Depression – Prologue
We might be getting close to a depression or atleast a deep recession. But, do we know what a depression means and how bad it is? In the next few months my plan is to take you through historical depressions worldwide, their causes and effects. I’m not going to wear a pink glass and say everything that is happening is going for good. I want to be realist and give you both sides of the coin – something that the traditional media lacks. There are both positives and negatives, and we keep an objective mind we can overcome any crisis is what history teaches us.
What is the series going to contain?
If this is a depression, is it then the end of the world?
Most data points of the current era draw similarity with the great depression – the volatility of the stock market, the fall of the biggest financial institutions and plummeting industrial production can all be compared to only one other even in modern American history – The Great Depression. So, the past one year, I spent time in watching some of the movies that are related to depression that came in 1930s and afterwards. I would have assumed that 1930s movies would be too gloomy, given all what we have read and seen in the latter era. But, majority of of the 60+ famous movies I saw during that era were either normal or positive, but in any case didn’t have a semblance of the gloom even when they touched the wall street crash.
So, is it really the end of the world, if we get into another Great Depression?
