Recently by Richard Russell: One Picture Is Worth a Thousand Tears
As I see it, the fundamental problem that the US and the developed nations are dealing with is the CONTRACTION of decades of over-spending and borrowing and debt-building that has occurred in the decades since the end of World War II.
I remember during the days prior to WW II that debt was literally a dirty word. People used to give "mortgage parties" when some member of the crowd finally paid off his or her mortgage. All the neighbors and friends would bring cakes and cookies and the party was always a big happy one. That was when that hated mortgage saddle was off one’s back, and that monthly bill no longer came in the mail at the end of every month.
The operative phrase in those days was "No credit, Buddy, cash on the line." Everybody thought in terms of cash, and if you didn’t have the cash to buy what you wanted, you went without.
I lived with my family on the upper East Side 89th Street and Lexington Avenue. Prior to that we live in an apartment house at 24 West 69th Street.
I remember one day I was standing in front of the building when an Italian gang of about ten kids walked by. The leader sneered and said, "Look at the little rich boy. Look at those fancy clothes." He came over and rained about ten punches on me in rapid fire. I fell to the sidewalk, not hurt but terribly embarrassed. That was the way if was if you lived in a decent neighborhood during the Great Depression.
Those who had some money slinked around the neighborhood. Those who have no money lay awake thinking of ways of obtaining money, even if they had to steal it.
I believe we’re entering the "GREAT CONTRACTION" now. It’s finally payup time. And it may not be pretty. La Jolla is now lined with stores or apartments and condos for sale. Little groups of vagrants (women among them) hang out behind the supermarkets, hoping for a handout (which are illegal). The markets are not allowed to dole out unsold food to waiting vagrants (sanitation rules). At every freeway entrance or exit men and women are seen, carrying signs such as "Veteran, will work for food" or in the case of women "Single mother, help me buy food for my baby".
I just perused the latest issue of Barron’s. For a change, Barron’s drops its incessantly bullish headline and instead asks "Where Do We Go From Here?"