The reccesion Word Has Been Spoken

I'm not going to quote from either campaign, but as long as the R word has been used, I will comment on that.

An amalgamation of several factors have come together to create what is definitely a recession.I have myself laughed about the two quarters thing. Thirty years in the finance and primarily mortgage financing have taught me that the feet on the street know a recession long before those in the ivory tower. By the time two quarters go by, (6 months) all these talking heads can say, is what has already happened.

I predicted about a year ago, a serious recession that might even dip into a depression. (check your grandparents for that definition)

Several factors are in play. One, the price of oil. Two, the drop in the dollar, three, long term interest rates stayed too low, too long. When that happens, the demand is used up, while production keeps on.

This creates an over abundance of supply, without the accompanying demand. spec building is in full gear, without any buyers in sight.The huge construction industry has been on a roll for over ten years. Many young workers have never experienced anything but growth.

Right now, we have a combination of high inflation, created by low taxes and high expenditures in the middle east. Also at fault, are artificially low interest rates, which encourage people to borrow. Back to the oil prices, the entire food chain has been affected, causing food prices to skyrocket. The tractors in the fields are costing three times as much to operate as three years ago. These costs are passed up the line for produce, meat, which is raised by hay, (prices way up) grain, (the same) all due to the skyrocketing costs of operating machinery.

The greed of the financial institutions, I can't explain. The reason, is they all learned the lesson of over extension back in the early eighties. Could it be that the losers back then are retired and no corporate memory exists? Forever good times only exist in "The Wizard of Oz," and other fairy tales. Everything that goes up, will indeed come down.

Look at Washington Mutual. Prior to 1980, they were a true mutual, which means the depositors are the owners. In, I believe, 1983, Washington Mutual became insolvent, but wait! They didn't have any stockholders. The executives of this large bank merely re-invented themselves, and became a stock corporation. Makes you wonder how they are going to escape this, the second time they went broke.Merrill-Lynch, Lehman and Bear-Stearns have all failed. We are closer to an entire meltdown than at any time since 1929.