My final post of 2007, Coming Soon, the Greatest Depression, was a doom and gloom prophecy about the economic state of our Union. The data which reveals the presence of a recession takes time to coalesce. When we can point at it, it has been around for awhile already. There is, however, something dubbed the Anxious Index… It was begun in 1968 to gather economic forecasts from the greatest economic minds of our time. They were asked to rate the probability of a recession in the next quarter. Only six times since 1968 has the Index predicted a recession. Only six recessions have occurred in that span of time. Every one of them occurred shortly after the prediction. This is the current Anxious Index chart. As you can see, there is a rather nasty spike occurring in January 2008 not unlike the six other spikes that predicted the six other recessions. It is quite thrilling to think that someone like me, a person who never studied economics, has no title, degree, or office, and who works a meager job in a meager land among meager people can call it as well as the smartest of the pack.
But, seriously, who does not see the signs presently? When in history have the biggest mortgage lenders in the world sold their mortgages to the second richest man in the world in order to stay afloat as is now happening? If that does not cry of desperation, then what about an economic stimulus
plan that was rushed through the biggest red tape machine in the world in a matter of weeks? And if not that, then what of two of the largest Federal Rate cuts in a row in the last quarter of a century? And if not that, then what of the U.S. economy coming to a virtual standstill in terms of growth with many large companies like GM getting ready to cut thousands of jobs? And then there is this hilarious bit of news about mortgages being frozen for a month… What is the point of that? It does nothing to deal with the problem which created the mortgage fallout. It only does two things: shortens the amount of pain immediately while prolonging the length of that pain in the long term and it gives stupid people with power who did stupid things with their power more time to try to find a way to save their asses.