Wednesday, March 11, 2009

Good News

Citibank claims a profit for the beginning of the year which seems hardly surprising in light of the -what is it?- 45 billion of taxpayers cash to help them along. This splendid news has a knock on effect at a time when there is no good news and so we have pundits and talking heads announcing the beginning of the end of the "downturn." Once decent claim by Citi and the Depression is over. A likely story.
A quick perusal of the history of the Great Depression can leave one thinking that the decline was sudden and the reversal was inevitable, but October 1929 was only the beginning. We are in the equivalent of 1930 right now, just six months since the start of our own crash, and though it takes just a couple of pages to read through six months of tribulations it takes a full six months to live through it. We are living through it now, week by painful week, and a sudden jolt to the stock market of just 300 Dow points doesn't mean our home values will be back in the stratosphere by Christmas.
I thought the news was good and felt relieved for about 15 minutes, but when I read the fudging of the numbers, no real accounting at all of where the profits actually came from, I have to wonder what sleight of hand this good news story is supposed to provoke as Citi slides towards involuntary nationalisation...I asked myself if we are witnessing the temporary effects of the stimulus shower, but I am forced to the conclusion this is a maneuver to avoid talk of nationalisation. I surely don't trust the bank to tell the truth, do I?
Talk of a Great Depression Two is much more widespread than even a month ago, yet there remains the attitude among many experts that the numbers in this recession/depression are lower than they were in 1982 or 1930 therefore this downturn isn't as severe and certainly a profit by a moribund bank may shore up that opinion. The problem is, no matter what they tell us, this downturn is nowhere near ended, so the likelihood increases that this will be just as bad as the 1930's and sooner or later no minor blip on the stock market will change that.

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