By the time a new President is inaugurated on January 20, 2009 our economic mess will have people looking back nostalgically at the Good Ol' Days of the Summer of '08.The collapse of the banking industry in the early 1930's was the principal engine that drove the Great Depression. We are seeing a repeat of that disease today.
First was the fall of Bear Stearns. Now Lehman Brothers is coming unraveled. The raw numbers for Lehman are bad ($2.9 billion loss in one quarter) but the more sophisticated metrics are even worse. The Enterprise Value of a company is its value on the open market, simply what it is worth if you were to buy the company outright. Lehman Brothers Enterprise Value is a negative $205 billion. Lehman Brothers, one of the biggest investment banks on the planet, is less than worthless. Way less.
The Federal Reserve is pumping cash into banks as fast as it can and that money is disappearing down a rat hole even faster. The banking industry is teetering on the edge of an abyss.
By November the economy will head the list of voters top ten concerns. It will also be two, three, six, eight, nine, and ten on that list. By November 4 people will just be praying the country can survive until January 20.
Great Depression Timeline
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