Thursday, May 28, 2009

The Great Depression: The Advanta House of Cards Collapses

Are you feeling depressed? Well, you should. That's why it's called The Great Depression.

What happened in the 1930's is repeating itself today in a virtually identical pattern. The names have changed and certain new industries have replaced the institution of the 1920's and 1930's, but the chain of events remains unbroken.

Students of The (first) Great Depression know that the Stock Market Crash neither caused nor even marked the beginning of the depression. It was more of an early warning system. In fact, many people in late 1929 and 1930 felt we had weathered the storm of the stock market collapse and were on the way to recovery. Sadly, they were wrong.

The cascade of business and institutional collapses and, especially the banking collapse happened slowly and over time. The worst of the crisis didn't hit until 1932. And then, as today, our government did virtually everything wrong.

Actually, today the actions of our government are much worse. We may well be looking down the barrel of a loaded gun that will actually destroy our country. We have the absolutely wrong leadership team in Washington. They do not see or understand the crisis that grips our country. Our leaders are literally fiddling while Rome burns.

I am especially distressed that, in spite of the daily warning bells, President Obama seems oblivious to the crisis at hand. But, as a friend mentioned to me earlier today, that might just be for the best. He would certainly prescribe the wrong medicine.

Today might just be the beginning of the final collapse. Yesterday Advanta Bank abruptly cancelled over one million business credit cards that have virtually kept small business in America afloat. With average credit limits of $25,000.00 to $40,000.00 these cards have been a lifeline as bank loans dried up and other credit card companies, like American Express, reduced lines and limits.

Unless you work with small businesses like I do, you cannot imagine the disaster happening today. Literally one million businesses are scrambling to replace a credit card in an economy where no new credit cards are being issued.

You can look for business payroll defaults as early as next week. You can look for layoffs as early as today. You can look for bankruptcies and store closures in the next few months.

Add this to the bankruptcies of Chrysler and General Motors, the bizarre closing of over 1,000 automobile dealerships and the general layoffs at factories and white collar businesses around the nation and you will soon see the death of many small towns. It is literally a house of cards. And the first card to fall was Advanta's.

If.... if..... if..... If only we had a real stimulus package instead of the pinata of death designed by Nancy Pelosi and the clueless Democrats in Congress. Dammit America. You should never let people who have done a day's work, managed a business, made a payroll, or worked and studied in economics design a "stimulus package."

You will note from the
government's own website that, 120 days later, almost no money has made it into the economy. As of 20 minutes ago the government has somehow managed to spend a whopping $31.1 billion dollars out of the$ 787 billion dollars in the stimulus package!!

Watch the House of Cards Fall:

Advanta Closes One Million Credit Card Accounts

Feel the pain in real time:
The Twitter Advanta Feed

Ask The Consumerists: Small Business Credit Cards

Advanta Freezing All Credit Card Accounts

NPR: The End of Advanta


Kentucky Rain said...

Jobs are being created (150K last month alone), and housing sales are moving up. Economists are now predicting an end to the recession before the year is out. Republicans of course refuse to accept it. They are said to be completely beside themselves at the gathering evidence of great success by this young new president.

Unknown said...

Mike you are amazingly deluded. Stop reading the liberal MSNBC spin. Get some real news, hey! why not READ the links Wizard provided.

150,000 jobs created last month? Well with Joe Biden as your source... Seriously deluded.

My wife is facing hours cut from at the public school system. My hours were already cut. Unemployment here is 18% and its going up every month.

Since February, the nation has lost more than 1.3 million jobs, according to the Department of Labor. (I suppose thats a Republican front group?)

Seriously give a factual list of this evidence of great successes Barry has accomplished.

Unknown said...

Reuters On U.S. unemployment causing forclosures"Another on ForclosuresUSA Today on how the hardest hit area's are ignored by the administration stimulusLeading economist more Negative Economic newsInvestors Daily spelling out Trillion Dallar Tax'sSince you have no facts, I provided more links from a variety of sources. Perhaps they are all RNC hacks... or will be considered such after you read them?

Will "take no prisoners" Hart said...

Only 6% of the stimulus package has been spent. Any credit that Obama (who I actually like in many ways) gets for ANY upturn in the economy will be quite fortuitous. Most nonpartisans will see it more as the business cycle.

Kentucky Rain said...

Lee everything you say is meaningless. The fact is Barack Obama is president. Get over it. Try to do and say something meaningful instead of spouting Rush Blubberbaugh.

shoo said...

Hmmm...I see a debate where one person provides links to impartial sources and the other blusters.

Please. Ddoes that pass as intelligent argument and debate over in liberal land?

At my work, I am seeing silver and gold making making major price break-throughs and am wondering why, given all the "good news" being reported on the economy. I was actually expecting the economy to pretty much recover before being destroyed by inflation and high interest rates, but perhaps we may not make it that far.

Thanks for the insight and warning Wiz!

Unknown said...

Mike you cannot deal with truth, I note you marginalized the messenger instead of dealing with any facts. Also, you invoke Rush as if that somehow makes the posted links and arguments nil. I take any resemblance to Mr. Limbaugh as a compliment (despite the fact, none of the links were to his site).

I just wish you could spell, you do claim to be an educator.

I am well aware who the president, I am quite over it, I suggest you do the same and open your eyes.

Perhaps you cannot point to anything Barry has done for one simple reason. He hasn't.

Perhaps, the Trillions spent with NOTHING to show for it means nothing to you. As long as dissent will not be tolerated?

Unknown said...

Yo, MM. I found something on HuffPo that shows the dedication to helping people Obama has demonstraited.

Or maybe Huff Po is another Limbaugh outlet?

Unknown said...

Finding Truth in spin

Unemployment rate is 9.2%, up from 8.9%. This is .2% higher than predicted, it might be 10% by the end of next year. We have lost over two million jobs this year, since January. There is no way to calculate jobs saved; that is a myth.

Yet MM is saying "Things are turning around!"

Unknown said...

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