Comments on: What is an economic depression? http://www.creditwritedowns.com/2009/02/what-is-an-economic-depression.html a finance news and opinion site Fri, 19 Mar 2010 15:42:00 +0000 hourly 1 By: It’s the writedowns, stupid - Credit Writedownshttp://www.creditwritedowns.com/2009/02/what-is-an-economic-depression.html#comment-9215 It’s the writedowns, stupid - Credit Writedowns Wed, 20 Jan 2010 14:35:09 +0000 http://www.creditwritedowns.com/?p=5903#comment-9215 [...] In a normal recession, credit becomes tight, but it is not central to the downturn. In fact, 80% of the decline in GDP is due to a de-stocking of inventory. Basically, businesses get ahead of themselves and forecast future demand that turns [...] [...] In a normal recession, credit becomes tight, but it is not central to the downturn. In fact, 80% of the decline in GDP is due to a de-stocking of inventory. Basically, businesses get ahead of themselves and forecast future demand that turns [...]

]]> By: D-Process « U.PRO.FISHhttp://www.creditwritedowns.com/2009/02/what-is-an-economic-depression.html#comment-9109 D-Process « U.PRO.FISH Tue, 12 Jan 2010 07:12:41 +0000 http://www.creditwritedowns.com/?p=5903#comment-9109 [...] Normal recessions are related more with inventory than with credit. Over estimation leads to excessive inventory, which leads to cut back in production, and slow down in economy. Time and price-cuts destock inventory, monetary policies give a bit of help, and economy gets going again. In current recession, inventory is a side problem and balance sheet is the core problem. Just as inventory problem will not be solved until inventory is destocked, balance sheet problem will not be solved until balance sheet is de-leveraged. (Please read What is an economic depression?) [...] [...] Normal recessions are related more with inventory than with credit. Over estimation leads to excessive inventory, which leads to cut back in production, and slow down in economy. Time and price-cuts destock inventory, monetary policies give a bit of help, and economy gets going again. In current recession, inventory is a side problem and balance sheet is the core problem. Just as inventory problem will not be solved until inventory is destocked, balance sheet problem will not be solved until balance sheet is de-leveraged. (Please read What is an economic depression?) [...]

]]> By: The year in review at Credit Writedowns: Crisis Solutions - Credit Writedownshttp://www.creditwritedowns.com/2009/02/what-is-an-economic-depression.html#comment-9041 The year in review at Credit Writedowns: Crisis Solutions - Credit Writedowns Sat, 09 Jan 2010 06:20:08 +0000 http://www.creditwritedowns.com/?p=5903#comment-9041 [...] What is an economic depression? – Feb 2009 [...] [...] What is an economic depression? – Feb 2009 [...]

]]> By: The recession is over but the depression has just begun | The Big Picturehttp://www.creditwritedowns.com/2009/02/what-is-an-economic-depression.html#comment-7602 The recession is over but the depression has just begun | The Big Picture Fri, 18 Dec 2009 22:29:12 +0000 http://www.creditwritedowns.com/?p=5903#comment-7602 [...] event entirely. Back in February, I highlighted a blurb from David Rosenberg which summed up the differences between recession and depression pretty well. Recessions are typically characterized by inventory cycles – 80% of the decline in [...] [...] event entirely. Back in February, I highlighted a blurb from David Rosenberg which summed up the differences between recession and depression pretty well. Recessions are typically characterized by inventory cycles – 80% of the decline in [...]

]]> By: Terryhttp://www.creditwritedowns.com/2009/02/what-is-an-economic-depression.html#comment-3647 Terry Mon, 09 Feb 2009 19:36:16 +0000 http://www.creditwritedowns.com/?p=5903#comment-3647 "The real work lies ahead — and some tough choices will have to be made as to which banks survive and which do not."Wait a minute! This is America! We don't make "tough choices," we just fritter away our country's and our children's financial future by throwing good money after bad in a potpourri of half-witted bailouts--ridiculously under-priced preferred share purchases, loans and guarantees, toxic asset purchases, bad banks, etc.--to insolvent banks and other "too big to fail" entities. “The real work lies ahead — and some tough choices will have to be made as to which banks survive and which do not.”

Wait a minute! This is America! We don’t make “tough choices,” we just fritter away our country’s and our children’s financial future by throwing good money after bad in a potpourri of half-witted bailouts–ridiculously under-priced preferred share purchases, loans and guarantees, toxic asset purchases, bad banks, etc.–to insolvent banks and other “too big to fail” entities.

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