March 16th, 2008

Mooseville

The Coming Economic Storm

I apologize for not linking to all the data that underscores my fears, but I'm not kidding when I say I'm going to change my lifestyle in anticipation for a very long and very painful recession. Those of you who've been on my friends list for the last few years know I have on occasion talked about the imminent collapse of the housing bubble and the havoc that it was going to wreck on the American (and by extension) global economies. Having said that, today's purchase of Bear Stearns by J. P. Morgan Chase for just $2/share when Bear Stearns was trading at $137/share last summer scares the shit out of me -- I expected bad things to happen, but nothing like this.

I fully believe we are in the beginning of the worst recession since the Great Depression, and it's very possible that when all is said and done this recession will rival the Depression as one of the ugliest economics periods in American history. I really, really hope I'm wrong, and while I never took an economics course in my life, I can't see how anyone can take a cold, honest look at what is happening right now in the financial markets and not clearly see the severity of the coming storm.