Are we in a Recession and Depression?

Question

We are in a R&D - it was CNN today that some banks are closing and people don't have access to their own money. On bank was featured, but they said that it's like 90 other banks on the list....SCARY!

I wonder if we are headed for WWIII - If history repeats itself -we are!

Answer 1

I would like to have a link to the story of banks closing.

No we are not in a depression.  I'm sure we are in the beginning of a recession.  I could see why people would think we are headed for WWIII but I wouldnt panic.  Because that probably wont happen and worry doesnt help anything.

Answer 2

Recession, possibly. Depression? No. During the 1930's the unemployment rate peaked at roughly 25%. As of 2006 the unemployment rate in the US was 4.8%. Not so bad, but within the last two years it has slowly been rising. As part of the business cycle it isn't exactly far fetched that we're already in a recession nor is it hard to believe we're headed towards another depression. But as long as the unemployment rate stays below at least 8% or so I think we'll be alright.

Answer 3

This is difficult to answer. Some once sadi a recession is when your neighbor loses his job; a depression is when you lose your job. A large indicator for these are unemployment rates. During the Great Depression they were up in the 30%. Nowadays the unemployment rate isn't that high but people are not making wages that keep up with the cost of living. If you were to somehow factor in jobs that pay less than 10 bucks an hour into the unemployment rate somehow it would probably be a more accurate number.

Banks are in bad shape. So many people are defaulting on mortgages. I know the FDIC is supposed to cover all accounts up to 100,000, but if a majority of the banks were to go under I find it hard to believe that people would get any money back.