Are we entering a depression possibly?

Question

I've been reading about the housing crisis and learned that Fannie Mae has 5 trillion dollars in holdings. Bill Gross of Pimco said that there are 1 trillion dollars worth of mortgage risks currently.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aSoJPea5JDG8&refer=home

If Fannie Mae were to hypothetically go bankrupt, wouldn't this cause a depression that makes the Great Depression look tiny, since they manage 5 trillion dollars in loans, 50% of the country's housing?

Answer 1

" A recession is when your neighbor is out of work..."

" when you are out of work, it is a depression..."

Harry Truman on the 1958 recession...

Answer 2

no.

we actually had an economic growth of 1% this past year.

And that number is improving.

However, it does seem that way, it's just that our wants are being limited and our needs being put over wants.

It's all about Economics.

Answer 3

Not necessarily. While we are in the midst of a brutal recession, I do believe that we have "bottomed out" and that things will start to look up in the next six to twelve months. I also expect Wall Street to greet the Obama administration with the same enthusiasm that led to the strong economy in the 1990's after Bill Clinton took office.

Answer 4

Economic depression is when you are jobless, and more are joining your ranks, by the millions.

Or, when you see that you, including your neighbours, has no roof on your head, when you are one among millions who queue for jobless benefits, when you giant factories closed down, when your government starts borrowing beyond their means to repay, when there is state of mass psychological depression that nothing could save the economy, then, you are there.



Worst, when prices of commodities go up; then,  you are in the state of stag-flation. No jobs, high prices.

But you are better off. You are subsidized by your government when you are jobless.

In the Philippines, if the police sees that you have so many tattoos in your body, and they see you loitering on a flashy neighbourhood, the policemen executes you, vigilante style. Not satisfied, the policemen or government vigilante are s****t. They bound your hands and legs, cover your eyes with tapes, then they kill you slowly by brutal and merciless way. They suffocate you, they stab you, they beat you with blunt objects resulting to broken bones, and when you are dead, they dismember your body and usually throw them on different sites. They even hammer a big nail to your skull while you are barelyl alive.

Take comfort. Remember the saying, “when America catches economic cold, the 3rd world catches pneumonia”.