March 17th, 2009
12:13 PM ET

Financial Dispatch: A second Great Depression?

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/US/02/20/economy.history/art.depression.jpg caption="Life-sized statues of a Great Depression breadline greet visitors to FDR memorial in Washington. "]

Andrew Torgan
CNN Financial News Producer

The number of Americans who think another Great Depression will occur within the next year is on the rise, a poll released today shows.

Forty-five percent of people questioned in a CNN/Opinion Research Corp. survey said another depression like the one the U.S. experienced in the 1930s is likely. Last December, 38% said a depression was likely in the next year.

The poll described the Great Depression of the 1930s as a time in which roughly one out of four workers was unemployed, banks failed across the country and millions of ordinary Americans were temporarily homeless or unable to feed their families.

New home construction unexpectedly surged in February, rebounding from seven consecutive months of declines.

Housing starts rose to a seasonally adjusted annual rate of 583,000 last month - a stunning 22% increase - boosted by an 82% increase in construction of apartment buildings. And applications for building permits, which are considered a reliable sign of future construction activity, rose a modest 3%.

Still, housing starts are down more than 47% from February 2008, when ground was broken on more than 1.1 million new homes.

Producer prices rose for a second-straight month in February, somewhat easing worries about the risk of deflation.

The Labor Dept. says the Producer Price Index rose 0.1% last month - a bit tamer than analysts were expecting. And the core PPI, which excludes food and energy, rose 0.2%.

The Federal Reserve kicks off a 2-day meeting today, and while no change is expected in interest rates, the central bank’s statement accompanying the decision around 2:15 p.m. tomorrow will be scrutinized for any clues as to where we go from here.

The Fed’s key benchmark lending rate currently sits at a target range of 0% to 0.25%.

Stocks opened just barely in the green on this St. Patrick’s Day. Wall Street snapped a four-session winning streak Monday, with the Dow losing 7 points, the S&P ending down 0.4% and the Nasdaq falling nearly 2% as tech stocks faltered.

Gas prices held steady overnight at $1.910 a gallon. 9 states and the District of Columbia have regular unleaded gas prices of $2 and higher. 41 states have regular unleaded gas prices below $2. The highest gas prices are in Alaska ($2.517). The cheapest gas prices are in Wyoming ($1.737)

Finally, Goldman Sachs - which accepted billions of taxpayer dollars last fall and was also a big beneficiary of the rescue of the AIG - is offering to lend money to some employees who have been squeezed by the financial crisis.

The loans, offered via e-mail last week, could range from a few thousand dollars to hundreds of thousands of dollars.

The loans are being offered because some employees face cash calls on their personal investments in some of the bank's own elite investment funds - which had been considered one of the key perks of working at Goldman.

Filed under: Andrew Torgan • Bailout Turmoil • Economy • Finance • Gas Prices • Oil • Wall St.
soundoff (12 Responses)
  1. Neo

    It's the media that fosters this opinion.

    We have money. It's where it goes that's the problem. That's not a depression. That's a gov't audit, at best!

    March 18, 2009 at 4:30 am |
  2. Annie Kate

    To have another Great Depression we would need to have, so I am told, the same percentage unemployed and same percentage of bank failures as the 1930s. So far we don't. But its getting scary. I hope this is just a really deep recession that will have run its course this year and things will improve next year. Maybe that is a foolish hope but I hope its not.

    March 18, 2009 at 12:26 am |
  3. Arthur- Dallas Texas

    I'm not happy with the Stimulus package being past at all. I believe most American's relied on the media for information about the stimulus bill and either didn't really know what was in it or just didn't really uderstand the package at all. (most just thought that it would create jobs right away). Large company's, auto industtries, financial institutions and corporate american receiveing billions of bailout money, it's just not right. .. All these company's have a skill system and this what they should have use to survive.
    The poor and the middle class hard working American's we our hurting at this time and we need some help with our finances. Most of us have present debt and a bad credit score. (the financial institutions have change the credit rating making it harder to get a loan). Our debts is what stopping us from going to the shopping centers and spending money. Most of hardworking american's are living from paycheck to paycheck and that's know good.
    Yes our government needs to control their wasteful spending habbits and we all understand that their is some coruption in our government systems and we need plans in place in keeping them honest and the same goes for the financial institutions and corporate american company's.
    I have a solution, I can not understand why the government doesn't just help the hardworking american families out and lead us some money so we can get a jump start in this economy. Base on the size of your household and income level, our government to lead the hardworking american families out any where from $1,000 up to $30,000 up front and raise taxpayers taxes anywhere from 1% or 2 % in taxes. This way it's not free money and we will be paying the money back, but this would really help the hardworking american families out a lot.
    With this, it's a start to restoring the economy, saving our jobs, keeping the auto workers working, small business running, (small business creates jobs not the governm,ent) retailorss will stay in business, enabling the markets, stop americans from loseing their homes and cars that we work so hard for, and most importantly restoring our financial system. Most of us would spend the money to pay down our off our debts, buy a new car, pay our mortages, invest in the stock markets, send our kids to a good school or college. And than you would have certain people who would go on a shopping spree, get their bills cought up, be able to put money away for retirement, take a vacation, start a business. Not everyone will do good with the money, that is why it's is base on your income, your household and whether you have a job or living off the government.
    In my opinion, wouldn't this stimulate the economy ???

    March 17, 2009 at 11:28 pm |

    Economist predict there is a 30% chance of a depression now that our socialist president Barack Hussein Obama is in office. His staff is incompetent with tax cheats, Racist and Lobbyists. It seems things got worse when Obam took office. He can always blame it on George W Bush. What he won't admit that Jimmy Carter is the real culprit. The foreign policy blunders in his term is still affecting us today spending over a trillion dollars in the middle east. Thank you Jimmy Carter.

    March 17, 2009 at 4:29 pm |
  5. louise rambo

    why doesnt he obama help the people like he has the business we pay taxestoo

    March 17, 2009 at 3:58 pm |
  6. Joanne Pacicca, Solvay, NY

    There were no bailouts in the Great Depression. Are we not just digging the hole deeper? And...why can't the experts predict anything until it's already come to pass? Let's say...like the recession. Had I known, in advance, I could have employed financial strategies that would have saved falling off the cliff. Perhaps that's why...they don't want us to take our personal savings and pull it out of the financial circus!

    March 17, 2009 at 2:48 pm |
  7. Michael C. McHugh

    History shows that every time you have one of these unregulated capitalist greedfests, it ends in a crash. That was true of the First Gilded Age in 1870-1900, of the 1920s, and again after our Second Gilded Age of the last 30 years. It shouldn't astonish anyone at this late date that capitalism tends to run itself into the ditch. There are many examples of this in the past. Capitalism is cyclcal, and its free market phases always seem to overload at some point and come down like a house of cards.

    What's really astonishing is that we let it keep happening, especially in America. We refuse to learn anything from history. Part of it is just the mindlessness of the Republicans, with Ronald Reagan and Bush Junior as prime examples. Part of it is the mindlessness of the voters who kept electing them.

    So...here we are. If this doesn't turn out to be a Great Depression like the 1930s, it will at be at least as bad as the ones in the 1870s and 1890s.

    March 17, 2009 at 2:26 pm |
  8. JC-Los Angeles

    When a nation is artificially kept afloat by egregious interest rate cuts, staggering mortgage fraud, corporate malfeasance and credit cards, it's time to acknowledge it's a depression.

    While Tom Brokaw artfully depicted the greatest generation, today's self-centered, materialistic, money-grubbing, corrupt, talentless, classless and myopic leaders represent the worst.

    After Worldcom, Enron, Tyco and Adelphia, the American people should have been able to rest comfortably knowing that our leaders would not let something like that happen again.

    Not only did it happen again, it happened on a global scale with bonuses being handed out for jobs atrociously done.

    You can't make this stuff up.

    March 17, 2009 at 1:13 pm |
  9. lisadee

    Anderson--A depression....never happen, but I am thinking the media would like it. Lisa

    March 17, 2009 at 1:08 pm |
  10. joanna

    Even though it feels depressing at the moment – I highly doubt it. Our economy is not that out of control.

    March 17, 2009 at 1:00 pm |
  11. mike

    Hey Coop,

    I keep hearing about taxes we are gonna have pay to keep these big companies in buisiness....would it be better to raise pay, instead of raising taxes? because I know that when i make more money , they take more taxes out of me.. so would it be better to give us a couple extra bucs an hour, or should they just keep raising how much they take from me and my family.... roughly 22% of my pay is taken right now..how much more do they want to take from me ?

    March 17, 2009 at 12:57 pm |
  12. Michael "C" Lorton, Virginia

    There is light at the end of the tunnel---provided that Congress quits adding more tunnel when it begans to see the light-–no more bailouts--let the inevitable happen-–then deal with what remains. Corporate ransom notes to Congress with the continutation of creating more bailouts is not the answer---someone is going to have to pay for this mess--and I can assure you that it want be Congress or our government!

    March 17, 2009 at 12:32 pm |