CHESSNOID

It’s official that we are entering our 17th month into this recession which is the longest since the Great Depression.  I think it would be foolish to think it will end anytime soon.

April 1 (Bloomberg) —

U.S. manufacturing probably shrank further in March, a report may show today as the recession enters its 17th month and becomes the longest since the 1930s.

The Institute for Supply Management’s factory index was at 36 last month, compared with 35.8 in February, according to the median of 74 estimates in a Bloomberg News survey. Readings less than 50 signal contraction. Another report may show companies cut more than 600,000 jobs for a fourth month.

The recession that began in December 2007 will probably continue until at least late this year, according to Federal Reserve projections. With sales tumbling at manufacturers from General Motors Corp. to Ingersoll-Rand Co. to steelmaker Nucor Corp., an industrial rebound is also unlikely for months, analysts said.

I personally believe the actions Federal Reserve Bernanke and former US Treasury Paulson contributed to the severity and length of this contraction. They were artificially manipulating the interest rates and printing out money out of thin air. Then they tricked Congress into the bailouts and stimulus packages. Now the US economy is in worse shape and we only have a bigger deficit to show for it.

The housing bubble was bursting because it was just too big. Then these financial geniuses though they could prevent it. The latest result a 19% drop in the top 20 metro areas.

San Francisco Chronicle:

“Prices are going down as fast or faster than they were last month, last quarter and last year,” said David Blitzer, chairman of the index committee at Standard & Poor’s, which issues the S&P Case-Shiller home price index. “It’s getting harder and harder to find some new way to say it’s really grim and dismal.”

All 20 metropolitan regions tracked by the index showed price declines compared with January 2008, while 13 of them clocked record annual declines. Combined, the 20 regions had a one-year plunge of 19 percent in home values and a one-month decline of 2.8 percent from December to January.

I hear many economists and experts saying that we are no where near a depression because we don’t have 25% unemployment.  These are the same experts who claimed the US economy was too resilient to experience a  recession.  Personally, I believe we are at the beginning of the Bush-Obama Depression.  It may not look exactly like the Great Depression, but the signs of suffering are all around us.  We will not see the bottom of this economic cycle until the real estate prices stabilize and the unemployment rate starts to decrease.  Unfortunately, all the government bailouts and stimulus packages are making this economy worse and the effects last longer.