The stock market floor on the day of the crash — October 29, 1929.

It was October 29, 1929 when a decade of extravagance came to a “crashing” halt. Living in luxury and investing in intangible money quickly became a thing of the past. Since Fox News wasn’t there to take you on the scene, we need your help.

From how they made money to what food they could manage to put on the table, we want to hear your family’s stories. Have any first-, second-, or third-hand accounts of that fateful day and the tough times that followed? Click “leave a comment” below to share!

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from RedState:

BREAKING: Dems Blocking Public From Press Conference

Posted by Erick Erickson (Profile)

Thursday, October 29th at 11:19AM EDT

8 Comments

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New home sales expected to rise 2.6 percent
October 28, 2009 by ALAN ZIBEL

WASHINGTON — Sales of new homes are expected to post their sixth consecutive monthly gain as builders reap the benefits of a tax credit for first-time owners that expires at the end of next month.

New home sales take surprise tumble
October 28, 2009

WASHINGTON – Sales of new homes dropped unexpectedly last month as the effects of a temporary tax credit for first-time owners started to wane.

economics, economy, gaffe, news media, recession

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The Debt Death Spiral

By Steve McCann

America’s economy faces a miserable future, according to an important government report. The media collectively have yawned, and official Washington has barely blinked. The Government Accountability Office recently issued its report to the Congress on the long-term fiscal outlook for the United States.   It is a bleak picture.  The report opens:

Weakness in the economy and financial markets — and the government’s response to them — have contributed to near-term increases in federal deficits, which reached record level in fiscal year 2009.  While a lot of attention has been given to the recent fiscal deterioration, the federal government faces even larger fiscal challenges that will persist long after the return of financial stability and economic growth.

And:

…the federal government is on an unsustainable fiscal path.

Unfortunately few in Congress will ever read this memorandum, as their interest lies in a) getting their ideology and agenda passed; and b) letting others worry about tomorrow.   By the nature of economic reporting and the enormity of the numbers involved this work of the GAO will not be seen or understood by the vast majority of the population.

The projections by the GAO can best be understood if we were to use the underlying statistics and apply them to a family’s financial situation.

Assume a family has prosperous middle class assets of $500,000.00 and annual income of $105,000.00, but as with many families, they spend much more (a deficit) and charge it to their credit card. The family income is made up of salaries and revenue from an annuity owned by the grandparents that live in the same household.

The report focuses on four years:  2009, 2019, 2030 and 2040.  Using the GAO simulation and assumptions plus constant 2009 dollars this hypothetical family situation would be as follows:

2009:  The long term debt:  $199,000.00

Spending:                 Interest:             $        6,500.00

Grandparents             23,000.00

Other                       130,500.00

Deficit                     ( 55,000.00)

2019:  The long term debt:  $521,500.00

Spending:                 Interest:              $     25,000.00

Grandparents             55,000.00

Other                         73,500.00

Deficit                     ( 48,560.00)

2030:  The long term debt:  $911,500.00

Spending:                 Interest:               $     44,000.00

Grandparents              70,000.00

Other                           67,000.00

Deficit                      ( 76,000.00)

2040:  The long term debt: $1,466,000.00

Spending:                Interest:                 $     72,000.00

Grandparents                80,000.00

Other                             66,560.00

Deficit                       (113,560.00)

The borrowing begins to spiral out of control in order to meet the spending requirement which in turn increases interest costs until the entire house of cards collapses under its own weight.

In the case of the family example used above, bankruptcy is the inevitable result of this uncontrolled spending and borrowing.   For a country the options are not so clear cut.

It has been generally accepted that a country’s economy is a good credit risk as long as its debt remains in the 50% range of that nation’s annual Gross Domestic Product.  Per the GAO the prospects for the United States are as follows:

Debt Held by the Public as a Per Cent of GDP

There are three options a country has to avoid complete economic collapse:  1) raise taxes, 2) cut spending and 3) inflate the value of the currency.

Per the GAO: revenue would have to be increased by 47% and noninterest spending cut by 33% or a combination of the two over the next 75 years to keep debt at the same level as the end of 2008 (40.8% of GDP).  Waiting another ten years to address this issue would require a revenue increase of 58% and noninterest spending cuts of 39% or a combination of the two.

Yet the Congress is discussing a Health Care Reform bill that could add over 5 Trillion dollars in new spending over the next 30 years and a Carbon Cap and Tax bill which will hamstring the economy and reduce potential and much needed growth in revenue.  The only way for the government to increase revenue is for the economy to expand.

(It should be noted the impact of the various Health Care Reform bills in Congress were not included in the GAO study)

The option of hyper-inflating the currency, while having the effect of paying off the debt with near worthless dollars, will destroy the country’s economy and relegate the nation to a “banana republic’ status unable to compete in the world economy.

Nothing lays out the future better than this GAO report.   The alarm has been sounded.  Those in the Congress who will not pay heed must be replaced.  Do not leave a shell of a once magnificent country to your children and grandchildren.

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(from addair)

Today I’m feeling underestimated and underappreciated.  I say this not to inspire pity.  Please, don’t pity me.  Rather, I’m saying to that emotion, “Thank you for the alert, I’ve taken notice.  Now will you kindly leave so that I can go about growing”.

Though it isn’t pleasant to feel this way, it is a good warning signal.  I feel this way because I got out my measuring cup and let them measure my brain (recall the Andrew Bird song).  This was my first mistake.  My second was to use a state-issued cup; I forgot that “it is no measure of health to be well-adjusted to a profoundly sick society.”(Jiddu Krishnamurt)

I get frustrated that market demand and broken infrastructure drives so much of our output and the way we spend our time.  This morning I was thinking about the limitations of artists and feeling angry and then I remembered that we don’t have to use their measuring cups.  A human life is too precious to be squandered on meeting the arbitrary standards of a society.

this is a picture of me and my mom when she came to visit in new york. today is her birthday (happy birthday, mom). she taught and teaches me that there's no such thing as being too idealistic

We need to make art (I’m using this term in its broadest sense), even if no one recognizes it as valuable.  Even if no one buys it, ever.  We need to do this and to fight for this right with all the fervor of a revolution.  Our greatest energy should be allowed to move toward making meaning,  to work for justice, and enjoy the fruit of being.

At this point, most people pat me on the head, “Okay, little idealist bunny.  You’ll grow up and see that there are bills to pay.”  And there are.   There are too many, and that is problem.  We have created a system that rejects simplicity and the freedom that entails for a tangle of commerce.  We’ve created it, but we don’t control it; and now we are trapped.

a painting on the matter. this one is a reflection back to new york. i think it was there that many of these thoughts were solidified.

But only  if we play by its rules.   And this is why we can’t wait for society to deem us artists.  We must claim our legitimacy to make art with our first energy whether or not the larger society agrees to its value.

Be grassroots, do direct action, and when you feel underappreciated– break your measuring cup and make a mosaic out the shards.

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Economy returns to growth after a year of declines
On 9:51 am EDT, Thursday October 29, 2009
By Lucia Mutikani
Yahoo Finance

WASHINGTON (Reuters) – The U.S. economy grew in the third quarter for the first time in a year, beating market expectations, as consumer spending and new home-building rebounded, signaling the end of the worst recession in 70 years.

The Commerce Department, in its first estimate of third-quarter gross domestic product on Thursday, said the economy grew at a 3.5 percent annual rate, the fastest pace since the third quarter of 2007, after contracting 0.7 percent in the April-June period.

The growth pace in GDP, which measures total goods and services output within U.S. borders, was above market expectations for a 3.3 percent rate. The economy last grew in the second quarter of 2008.

Economy returns to growth after a year of declines

Not so fast. The recession is not over yet. Unemployment is climbing still. I don’t see this recession being over yet. I don’t think it will be over until 2010 at earliest. Even in the Great Depression, th GDP went up, while unemployment was high in the neighbor of 25%.

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John Mauldin:

Today I give you a video about Russia and how a plan to fix the economy might throw off the political balance of power. I regard Moscow’s situation as a valuable lesson for our country – also in the throes of an economic crisis – and for investors affected by global markets. Click here to watch this great video by my friends at STRATFOR, a global intelligence company

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CBS Markwatch story:

“WASHINGTON (MarketWatch) – The U.S. economy expanded at a 3.5% annual pace in the third quarter, as massive government stimulus helped drag the economy out of the longest and deepest recession since the 1930s, the Commerce Department estimated Thursday.”

full story at:

http://www.marketwatch.com/story/us-gdp-rises-35-as-stimulus-kicks-in-2009-10-29

According to the article:

“as massive government stimulus “

That’s almost analogous of feeling great thanks to a bottle of Jack Daniels spiking a punchbowl.

Lets see what happens when the Feds take away the super-spiked punchbowl.

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Nouriel Roubini | Oct 28, 2009 From the International Herald Tribune:

Global imbalances — roughly defined, the different emphasis the world’s leading economies place on savings, spending and debt — is a phrase much used and little acted upon.

Well before the current financial crisis began, world leaders pledged to address this disconnect. At an International Monetary Fund meeting in 2007, for instance, representatives of the United States and the European Union agreed they should change economic incentives to encourage more savings and less spending; officials speaking for China, Japan and Germany, meanwhile, pledged to take steps to encourage spending. At the end of the day, nothing much happened, and these imbalances helped grease the skids for the global descent toward the economic abyss.

This might not be readily apparent from current numbers; in fact, the financial crisis has contributed to a significant narrowing of global economic imbalances. Consumers in so-called “deficit countries” — states like the U.S., Britain, Spain and the countries of Eastern Europe that have huge trade deficits — are saving more as the crisis has exposed the dangerous extent of their indebtedness. Meanwhile, in China and other large export-driven economies, fiscal stimulus spending and some other policy moves have encouraged more domestic consumption. The reduction in the U.S. current account deficit — the broadest measure of trade in goods and services — is particularly striking and serves as an example. This reduction holds true across other, less robust economies, too. Many of the emerging economies of Eastern Europe had easily financed wide deficits during the boom years. Now they find they are reducing private consumption in light of the lack of credit.

In more desperate cases like Ukraine and Kazakhstan, this has necessitated currency devaluation that boosts the costs of imports. Others, especially Eastern European countries in line for E.U. membership, have clung to their currency pegs. This leaves room for adjustment only via a sharp reduction in domestic demand.

Changing ingrained habits — whether the tendency is to be too thrifty, or too loose with money — is never easy. There is a powerful temptation to point at current trends and argue that rebalancing is taking place naturally. That would be a big mistake.

All evidence suggests that this rebalancing is temporary — the result of reactive policy measures among exporters and retrenchment among the profligate.

China, the world’s sovereign wealth machine over the past decade, is a case in point. My colleague, Rachel Ziemba, projects China’s current account surplus will likely narrow to $350-370 billion depending on the import trajectory, down from a record $420 billion in 2008. China’s trade surplus was just under $100 billion in the first half of 2009. A trade surplus of about $30 billion in the third quarter of this year is expected, which is well below 2008 levels. Increased spending at home rather than savings could further reduce the surplus. Yet with China reluctant to allow currency appreciation, reserve accumulation has resumed at a strong pace.

Although the export-oriented growth model has been shaken by the crisis, many countries seem reluctant to recalibrate. The beginning of inventory restocking has buoyed Asia significantly, as companies that cut back sharply have now increased output. Avoiding currency appreciation will exacerbate this trend, adding to reserve accumulation and distortions.

The most recent I.M.F. estimates — released in the October 2009 World Economic Outlook — suggest that imbalances could widen again but remain lower (as a share of G.D.P.) than their 2006 peak. Yet the dollar values of these imbalances could be very large. In the I.M.F.’s forecast, China’s surplus will widen again in 2010, even as a retrenched U.S. consumer remains weak.

So who offsets the U.S. deficit? The I.M.F. suggests a diffusion of imbalances, where surpluses of Germany and Japan will remain in shrinking mode even in 2010, while the deficits of Canada and Australia, as well as emerging economies like Brazil, will offset the growth of China’s surplus.

However, the I.M.F. five-year projections also show a widening current account surplus for the entire world. This could suggest that some of the underlying export assumptions are too optimistic given the growth estimates.

Global imbalances are back on the policy agenda with the G-20 agreeing to create a peer review of macroeconomic policies including imbalances to avoid another crisis. The details are limited so far, but focus once again on an agreement that the U.S. will consume less and save more; Japan, Germany and China will spend more and will reallocate investment away from the export sector.

These are the right goals, to be sure. But a joint communiqué from a nascent international organization isn’t much to hang the world’s hat upon. The I.M.F. needs teeth, perhaps along the lines of the W.T.O.’s authority to prod member states toward “out of court” settlements, in order to enforce these difficult political and economic goals.

These imbalances represent serious misallocations of capital in domestic economies that, projected globally, raise the risks considerably of future financial crises and asset bubbles.

While imbalances did not cause the current financial crisis — I believe lax regulation bears a far greater onus — these imbalances certainly helped create the conditions for this crisis. Easy money and low long-term interest rates created an incentive to invest in seemingly-safe high-yield assets. An orderly unwinding of imbalances might put a lid on global growth during the adjustment, but is fundamental to achieve sustainable global growth.

Nouriel Roubini is a professor of economics at the Stern School of Business, New York University.

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….. with the public option.. or at least a version of it… Let’s get this done..

Click here for the whole story =====>

Via CNN

Washington (CNN) — House Democratic leaders unveiled a sweeping health care reform bill Thursday that includes a more moderate version of the government-run public health insurance option.

The bill — a combination of versions passed by three House committees — includes what is termed a “negotiated rate” public option. It will cost $894 billion over 10 years and extend insurance coverage to 36 million Americans, according to House Speaker Nancy Pelosi’s office.

The bill guarantees that 96 percent of Americans have coverage, Pelosi’s office said. The figure is based on an analysis by the nonpartisan Congressional Budget Office.

“Today, we are … laying the foundation for a brighter future for generations to come,” Pelosi said on Capitol Hill.

“For Americans struggling with the cost of health care, this is an urgently needed bill,” said House Majority Leader Steny Hoyer, D-Maryland. “This is an idea whose time has come.”

Pelosi’s office said the bill would cut the federal deficit by roughly $30 billion over the next decade.

The measure is financed largely through a combination of a tax surcharge on wealthy Americans and spending constraints in Medicare and Medicaid. Medicare expenditures would be cut by 1.3 percent annually, the speaker’s office said.

// Under the House plan, health care providers would be allowed to negotiate reimbursement rates with the federal government, according to Democratic leadership aides.

Pelosi and other liberal Democrats had argued for a more “robust” public option that ties reimbursement rates for providers and hospitals to Medicare rates plus a 5 percent increase. Several Democrats representing rural areas, however, complained that doctors and hospitals in their districts would be shortchanged under such a formula.

The Democratic leadership is working to post the text of the final bill online early next week and has agreed to give members 72 hours to read it before a vote. Under that timetable, the House would begin debating a health care bill at the end of next week.

Any bill passed by the House of Representatives will eventually have to be merged with legislation passed by the Senate. Both chambers would then have to pass a revised measure before sending it to President Obama to be signed into law.

One thorny issue remaining to be resolved among House Democrats is the final abortion language in the bill. Michigan Democrat Rep. Bart Stupak has been pushing leaders to add stronger language prohibiting the use of federal money to pay for abortions under new health care reforms.

Stupak has vowed that if he isn’t allowed a vote on the issue, a group of 40 anti-abortion Democrats will work to block the bill from getting to the House floor.

Leadership aides admit they still need to find compromise wording on abortion, but they are confident the issue will be resolved by the time the bill gets to the floor.

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