We are not out of the woods yet.  Read my other postings regarding our current situation and where we are heading.  It is going to take many years for our economy to rise out of the ashes and dust and start moving forward in the right direction.  When it does, it will not be business as usual for Corporate America.  Corporations and businesses of every type will have undergone through a massive reinvention resulting from this crisis.   The credit markets, including Wall-Street, as we know them today will seize their current free-spirited business practices, turning back the clock somewhat.  Accountability will become the order of the day, with tightened lending requirements for individuals and more government regulations to preclude manipulators from intentionally or maliciously manipulating the stocks of company for their own personal gains.  Home prices, the engine that contributed greatly to influencing spending by home owners (by taking out home equity loans), thereby helping to keep the economy afloat during the past 6-7 years, will become relatively stabled and predictable, but we will not see home prices go through the roof as we did until 2006.  People will no longer be able to borrow for up to 125% of home value or get home loans without actually putting down 20-25 of appraised value.  To protect their investments, companies will have to get used to the idea of selling less and selling to people that can afford to pay.  The expansion by companies (glutting) with stores in many parts of the country within a few miles from one another will be reversed with many closures, in order to shrink their existing business models to meet the smaller demands of the future.

Some in the government are still talking about the possibility of a recession.  They just don’t get it.  Forget about recession, they need to start talking and preparing about how to combat the depression.  The $750 billion bailout is nothing but a drop in the bucket and small pocket change compared to the trillions it will eventually take to get us out of this mess.

I don’t know how much more evidence they need to figure this out.  Every day we read about records breaking declines such as those reported today:

"Mid-Atlantic regional factory activity crashed to an 18-year low in October, a survey showed on Thursday, adding to the grim toll the last month of credit turmoil has taken on the economy."

"The Philadelphia Federal Reserve Bank said its business activity index slumped unexpectedly hard to -37.5 in October from 3.8 in September. That was its lowest since October 1990."

"Big industry production plunged in September by the most since late 1974, largely reflecting fallout from hurricanes Gustav and Ike."  

"The Federal Reserve reported Thursday that production at the nation's factories, mines and utilities plunged 2.8 percent last month, on top of a 1 percent drop in August."

 The above is a reflection of what we can expect long into 2009, 2010 and possibly well beyond with more contraction and misery for everyone.

Please read the rest of the story: http://chaosinamerica.blogtownhall.com