Forget The Mainstream Propaganda, We’re In A Full-Blown Global Depression And It’s Scary

It is astounding how much economic crater is out there so forget the mainstream propaganda, we’re in a full-blown Depression and it’s scary.

Forget The Propaganda, We’re In A Full-Blown Depression
June 24 (King World News) – Jeff Snider at Alhambra Partners:  I guess in some ways it’s a race against the clock. What the optimists are really saying is the equivalent of the old eighties neo-Keynesian notion of filling in the troughs. That’s what government spending and monetary “stimulus” intend to accomplish, to limit the downside in a bid to buy time.

Time for what? The economy to heal on its own. Fill up the bathtub, so to speak, with artificial stimulus water (aggregate demand) until such time as the basin stops leaking and it’s that much of a shorter way to go for the water level to rise back to normal without the need for further assistance.

What happens in the trough is what can make the worst kinds of troughs; second and third order effects where instead the negative forces are amplified and the recession becomes worse than “it needs to be.” That’s the Keynesian motto, essentially.

In some ways, though, they were too late for this one. The overreaction shutting everything down willy nilly as well as GFC2 took away time and space (to use a sports metaphor). The window for a successful outcome has already been perilously narrowed. What I mean is:

Americans have skipped payments on more than 100 million student loans, auto loans and other forms of debt since the coronavirus hit the U.S., the latest sign of the toll the pandemic is taking on people’s finances.

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NYT front page from March 9, 1930. There is an article about the tarrifs (just like now) and not a peep about the unfolding Great Depression (just like now).
— Simon Mikhailovich

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Not only that, according to the same WSJ article, 106 million have “enrolled in deferment, forbearance or some other type of relief since March 1”, a level that is triple what was estimated at the end of April just one month prior.

One Hundred Six Million.

As I wrote before, this isn’t about share prices; except how Jay Powell intends to use the stock market as a means to try to offset any nasty consequences of regular folks and businesspeople from getting the idea conditions are anything other than awesome. Not today; everyone knows it sucks today. But tomorrow things will be soaring again, just hang in there like the S&P shows you!

One hundred and six million in the default pipeline, though, that can only mean the clock has already started ticking. The output of that pipeline is bankruptcy and loss, and wide distribution of both. A consumer who wins bankruptcy relief doesn’t extinguish their obligation, they’ve simply redistributed the loss to the bank or financial firm who first extended the loan.….more here

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