Soros & Voelcker Say We're Pretty Much Screwed, 47 Others Say Only Partly So

Reuters - Soros Sees No Bottom For World Financial Collapse  The Dow is back where it was a long long time ago. Soros says the world financial system has "effectively disintegrated." He sees no prospects of a near-term resolution and that the turbulence is more severe than during the Great Depression, and compares it to the demise of the Soviet Union. Like the recent scary diary at DailyKos that says we came three hours from complete economic meltdown, he says the Lehman Brothers bankruptcy did us in.

"We witnessed the collapse of the financial system. It was placed on life support, and it's still on life support. There's no sign that we are anywhere near a bottom."

(Never mind that Soros himself is a financial opportunist.) Paul Volcker (former Fed Chairman now advising Obama) said industrial production around the world was declining even more rapidly than during the Depression. His exact words:

"I don't remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world."

I talked for an hour with my financial planner and am trying to convince myself that fortunes are made at the bottom, not at the top (ie. don't sell anything else), but really - it's too late to matter. Any recovery will still mean one step forward, two steps back. We need "stimulus" yet our children and grandchildren's futures have been mortgaged with debt.                               

Others are more optomistic and see the U.S. economy as starting to recover about six months from now, following a sharp contraction (which we're seeing.) They say it rivals the slump seen in 1973-75 (war is expensive.) 47 professional economic forecasters predicted improvement to a possible growth trend by 2010, and felt the Obama stimulus would indeed stimulate this. Household wealth (real estate value, stock market holdings) are down so people spend less and companies lay off workers. So if we are not rivaling the Depression, even these 47 optimists have the clock turned back 35 years! We have a 17 year peak in unemployment and we could easily go from 7-10%, they say.

Slugbug