A Depression? In 2008? Not So Fast

It is the first day of spring but it’s still not even forty degrees. Last night we had dinner with friends in Holyoke and one of them told us that she heard a TV report that 2008 would be the year of another great depression. That’s with a d, not an r.

This caused both Cindy and I to run to our computers this morning and find out more. What we found didn’t corroborate this horrific report. The news about the ‘d’ word came from a Goldman-Sachs higher up who was quoted on some unknown website news source.

On CBS Sunday Morning, we heard Ben Stein speak of this same issue. He addressed the fears and the whole mess that the banking and real estate businesses are in but was clear in how much different 2008’s situation was than 1929. Back then the feds didn’t do anything to help ease the crunch, in 2008, the feds lowered the prime rate, and are helping bail out other large financial institutions as well. What they set up with Bear Stearns might open a floodgate, but for now they are trying to do something about this domino effect of intertwined investment instruments gone bad.

I remember when the guy who drives the truck for one of our cafe food purveyors told me that his truck is now usually only half full, and that it used to always be full. This and the news that Fed-X and UPS are shipping far fewer packages makes me think that we might be in for an R, even if we dodge the dreaded D, for Depression.