Indicators of the deepening depression in 2009 are found everywhere

NOTE: I will be showing photos of the riots during the G20 meetings over the next few days, such as these.
Bankruptcies rose by 14% in 2008 and are set to rise another 20% in 2009 (Financial Times, Feb. 25, 2009; p27).

The write-down of the Western big banks is running at 1 Trillion dollars and growing (according to the Institute for International Financing, the banking groups Washington lobby). (Financial Times , March 10, 2009 p.9).

And according to the Financial Times (ibid) the losses arising from banks having to mark their investments down to market prices stand at 3 Trillion dollars – equivalent to a year’s worth of British economic production. In the same report, the Asian Development Bank is quoted as having estimated that financial assets worldwide have fallen by more than $50 trillion – a figure of the same order as annual global output. For 2009, the US will run a budget deficit of 12.3% of gross domestic product…giant fiscal deficits…that will ultimately ruin public finances.

The world markets have been in a vertical fall:

The TOPIX has fallen from 1800 in mid-2007 to 700 in early 2009;

Standard and Poor from 1380 in early 2008 to below 700 in 2009;

FTSE 100 from 6600 to 3600 in early 2009;

Hang Seng from 32,000 in early 2008 to 13,000 at the start of 2009 (Financial Times, Feb 25, 2009; p27).

In the fourth quarter of 2008, GDP shrank at annualized rate of 20.8% in South Korea, 12.7% in Japan, 8.2% in Germany, 2.9% in the UK and 3.8% in the US (FT, Feb.25, 2009; p9).

The Dow Jones Industrial Average has declined from 14,164 in October 2007 to 6500 in March 2009.

Year on year declines in industrial output were 21% in Japan, 19% in South Korea, 12% in Germany, 10% in the US, and 9% in the UK (Financial Times, Feb.25, 2009; p.9.)

Net private capital flows to less developed capitalist countries from the imperial countries were predicted to shrink by 82% and credit flows by $30 billion USD (Financial Times, Feb. 25, 2009; p9).

The US economy declined by 6.2% in the last three months of 2008 and fell further in the first quarter of 2009 as a result of a sharp decline in exports (23.6%) and consumer spending (4.3%) in the final quarter of 2008 (British Broadcasting Corporation, Feb. 27, 2009).

With over 600,000 workers losing their jobs monthly in the first three months of 2009, and many more on short hours and scheduled for axing throughout 2009, real and disguised unemployment may reach 25% by the end of the year. All of the signs point to a deep and prolonged depression:

Automobile sales of General Motors, Chrysler and Ford were down nearly 50% year to year (2007-2008). The first quarter of 2009 saw a further decline of 50%.

Foreign markets are drying up as the depression spreads overseas.

In the US domestic market, durable goods sales are declining by 22% (BBC, Feb. 27, 2009).

Residential investments fell by 23.6% and business investment was down 19.1%, led by a 27.8% drop in equipment and software.

The rising tide of depression is driven by private business led disinvestment. Rising business inventories, declining investment, bankruptcies, foreclosures, insolvent banks, massive accumulative losses, restricted access to credit, falling asset values and a 20% reduction in household wealth (over 3 trillion dollars) are cause and consequence of the depression. As a result of collapse of the industrial, mining, real estate and trade sectors, there are at least $2.2 trillion USD of “toxic” (defaulting) bank debt worldwide, far beyond the bailout funds allocated by the White House in October 2008 and February and March 2009.
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