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Major Newspapers Publish Articles About Possible Depression

 March 24, 2008 03:02 PM

One of the best "timing indicators" that we love to point to years later is how wrong the major newspapers are at major market bottoms and tops. It makes sense because newspapers report THE NEWS not "THE FUTURE."

When everyone was getting rich on company stock options and quitting jobs to be day traders when the market was at a peak in March 2000, the newspapers were full of success stories about this. Likewise, the papers were full of how much money people were making in real estate a couple of years ago before the bottom fell out for many markets around the country.

So, it should be no surprise to read today that people are worried that the bad times will turn into a depression.

Here are three bearish articles that "ring the bell" for those who can hear it.

March 23, 2008 New York Times: Depression, You Say? Check Those Safety Nets Excerpts:

  • "Some innocent bystanders might be forgiven for wondering why that last word — "depression" — has started popping up. Is it possible our economy could speed past a recession into a full-blown depression like that of the 1930s, when American unemployment reached 25 percent?"
    "Even if consumer confidence hit rock bottom, that most likely would not be enough, by itself, to cause a depression. For things to become really dire, the nation's financial institutions would have to fail at the same time that unemployment began significantly rising. Only if banks suddenly closed, or it became impossible for companies to access short-term lines of credit, would things begin spiraling out of control."
    "Some economists and financiers say it's likely that the current recession will extend for at least a year. Others think the American economy will suffer from an extended malaise as Japan did in the 1990s."
    "But whatever name economists give the current downturn, we are unlikely to see the bread lines, shantytowns and dust bowl of the Great Depression.

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