The New New Greater Depression - Are we there yet?

According to Walter Zimmerman on the Glenn Beck show, yes, yes we are.
See Transcript Here
Copyright 2009 Fox News Network, LLC.

Fox News Network

SHOW: BECK 5:00 PM EST
February 25, 2009 Wednesday
022501cb.258
NEWS; Domestic
7276 words
BECK for February 25, 2009
Glenn Beck

Walter Zimmermann, he is the vice president of United I-CAP. It's a financial data and analysis company. You are just a company that just takes data points, right? You just look at all of the different things that are out there, and you just have the picture based on data points.

WALTER ZIMMERMANN, UNITED I-CAP VICE PRESIDENT: Yes. Our responsibility is to give the correct advice, to tell it like it is, to diagnose the problem, and give our clients strategic trading, hedging.

BECK: OK. All right. And you've been saying for three years that we are headed for real trouble.

ZIMMERMANN: Yes.

BECK: You believe that we're not only headed for a depression, do you believe that we're at the doorstep or just walking through it?

ZIMMERMANN: I think we're entering into it right now. And the key is -- the combination of a collapsing equity market, a collapsing real estate market, and a collapsing commodity market. It's extremely rare that those three trends occur together, and the last time they did was the Great Depression.
BECK: OK. Look, I don't want to be a guy who's, you know, all gloom and doom and no hope, because there is hope if we experience the pain.

ZIMMERMANN: Yes.

(Emphasis mine)
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So lets take a look at exactly what a depression is. You have to have 3 factors in play, all at the same time. How do we stack up?

(1.) Loss of GDP. Check
The GDP Shrank 6.2% in 4th Quarter from 3.8% according to The Wall Street Journal Feb. 27, 2009.

(2.) Rising Unemployment. Check
Every week in February, more than 600,000 people filed new claims for unemployment insurance, and the unemployment rate rose to 7.6% in January, from 7.2% in December. According to the same Wall Street Journal article.
In the meantime, California's unemployment rate hits the double digits, rising to a stunning 10.1%.

(3.) Decrease in world trade. Check
The U.S. has been hurt by the synchronized nature of the current global downturn. Exports declined at a 24% annual rate, compared with the 20% rate previously reported. Meanwhile, it appears the world's other economies truly fell apart in the fourth quarter. India reported on Friday its fourth-quarter GDP growth was lower than expected, while Japan said last week its GDP had contracted more than 12%. Growth in both Europe and the U.K. fell at an identical 5.9% annual rate. These numbers mean the U.S. can't lean on its trading partners to buy goods and help buoy business activity. Again, from the same article.

Again, Walter Zimmerman's quote, "And the key is -- the combination of a collapsing equity market, a collapsing real estate market, and a collapsing commodity market."

1. collapsing equity market
2. collapsing real estate market
3. collapsing commodity market

Check, check, annnnnd check.

How consumers are changing their spending habits, according a Charlotte Observer reporter, Peter St. Onge in his blog.

This article also has more information on consumer spending changes. They call it "insourcing", or doing things for yourself that you used to pay others to do.
From the article:
-Sewing kit sales are now up 30 percent
-Sales of its popular fabric adhesive Liquid Stitch, which costs $2.93, have skyrocketed more than 50 percent.
-sales of herb gardens and tomato and pepper seeds are up, an indication that shoppers are trying to save money by growing their own food
-sales of oil, filters, grease and funnels have also risen as more people opt to be their own mechanic
-A report by SBI, a market research firm, shows revenue for landscaping firms fell 7 percent during the past year

Depending on how worried you are, you should at least get some basics, and keep some stored.

Bottled Water
Dried beans, peas
Rice
Sugar
Salt
Herbs
Canned Foods
Candles
Vegetable Seeds

Even if you aren't prone to believing the New New Depression is here, or even coming, these basic items may come of great help during winter storms, hurricanes, tornadoes, and the like. Remember, the recession started somewhere, and so did the first depression. Just because you don't see it, doesn't mean it isn't there.

In a worst case scenario, you will be able to face it better if you are prepared. If no worst case happens, what have you lost?

Do you have things stored? Perhaps some food? Seeds, to grow your own? Things to barter with? Some bottled water? No? Think you may need to start stocking up?

Don't wait to hear it on the news, by then, it will be too late.