U.S. stock markets are down more than 50% since they peaked in October 2007, but that figure really doesn’t indicate how rapidly the decline is accelerating.The markets are down 25% in the first two months of 2009, and down 10% in the last week. If the markets fall another 25% or so within the next two months, we’ll reach capitulation. Therefore, I’m revising my earlier forecast, which called for complete economic collapse by the end of this year.
I’m still giving the industrial economy a 99.9% chance of failing by year’s end. And a 90% chance of failing by the end of summer, along with a 70% chance of not making it through the spring. Of course it could all come down any day, despite Wall Street’s dreams for a rally this week. If you’re waiting until things get bad before you start making other arrangements, I have two words for you: We’re there.
The time to dig a well is not when you’re thirsty.
The mainstream media are lining up at the trough of doom, reporting the huge spike in job losses during the last few months, the worst of which is yet to come, the Fed saying the economy sucks and that the recession is deepening, and the Wall Street Journal reporting increased odds of a depression. Meanwhile, Nouriel Roubini is getting gloomy while the federal government is hiding information about AIG, likely to stave off civil unrest a while longer. For even more fun, check out Jon Stewart in top form as he eviscerates CNBC (youtube version here).
If you need another sign the apocalypse is here, I’ll be speaking and leading a discussion after a film on campus Monday night. Nothing novel about that, except that I haven’t seen five films in the last five years: I’m hardly an authority on the medium. Oh, and I was asked to speak by a student club called the Vagina Warriors, on the topic of a documentary film: What I Want my Words to Do to You documents both the wrenching personal journeys undertaken by the inmates to find the words that tell their own stories, and the power of those words to move the outside world. No, I don’t have a vagina. But I teach poetry in institutions of incarceration. Drop by, if you’re in the neighborhood.