Over at The Automatic Earth they've been diligently covering the unwinding of our immense financial mess.
Today I was talking to an Irish fellow behind the counter at a gas station in Odebolt, Iowa and he said "I hear it's going to be like 1929 again ..."
An hour later I picked up a hitch hiker on highway thirty, an out of work grocery store stocker looking to move west and make a new start. He was clean, neatly dressed, and didn't present as a substance abuser or a mental patient over the hour I spent with him. Him too: "They say there will be another Great Depression."
The common man knows, and it is so well known that we need to stop saying that it'll be like the Great Depression and instead give it a proper name. Let this diary's title serve as a starting point.
Ginormous - a marvelous neologism which is entering common use. I really like this adjective much more than "Great" - that is so Victorian. This stuff needs a name that the young folks will latch onto.
Banking - the banks are at the center of this. They've got crud on their balance sheets and from what I can see based on margin calls happening from the level of hedge funds clear down to DailyKos' farmerchuck it affects everyone. See four airline bankruptcies? See a merger? See a curious interlude where American stopped flying, yet didn't refund customers' money? Any one of the larger events would be an eye opener, but we've been getting hammered with those since last August's Bear Stearns hedge fund collapse.
Enema - the banks are full of shit, or more correctly their balance sheets are full of shit - toxic SIV/CDO/MBS/ETC which get their value from a fantasy world of computer models. Try and sell some of this junk in the open market and you get a nickel back for every dollar with which you started. One day soon something like an Icelandic bank collapse, or a prickly German regulator insisting on the correct application of certain accounting rules, and then it'll all come out in one big gush.
of 2008 - Right now we've got the banking system straddling the U.S. but applying prana bindu right out of the series Dune to avoid letting go. Bernanke and Paulson are out there with a wad of Treasury bills and an oil tanker full of super glue trying to stop it up long enough to get past the November election but I don't think that'll fly. I've had a certain level of expectation over these things - what is happening now I suspected would occur right after the first of the year based on the 2007 fourth quarter results. I'm guessing inescapable systemic failures are going to set in by the time the second quarter 2008 results come available, right after Independence day.
The sources behind my thinking on this are limited and of high quality:
http://theoildrum.com - best site for detailed analysis of energy issues
http://theautomaticearth.blogspot.com - best high level financial site
If you're trying to visualize what this will be like movies made about the Great Depression will serve nicely. I hear the movie Grapes of Wrath is a good starting point but I've never seen it. Cinderella Man covers the period quite authentically. I personally love Carnivale despite the fact HBO didn't allow the third and final season, but some may find its mystic underpinnings not to their taste.
So, come one, come all; doomers, skeptics, curious, and disbelieving. I'm curious to hear your opinions on my potentially catchy naming of this unfolding disaster.
(UPDATE: Here is a nice visual representing the status of our economy.