February 5 2008
NEW YORK (CNNMoney.com) -- A growing number of top economists believe that the U.S. economy has now toppled into recession.
Alarm bells were set off Tuesday by a grim report on service businesses, which make up the majority of the U.S. economy.
The Institute of Supply Management said that activity in the service sector declined for the first time in nearly five years. This report also indicated that employers are cutting staff.
The survey covers the retail, transportation and health care industries as well as hard hit areas such as finance, real estate and construction.
Some economists argued that the normally low-profile ISM services reading, coupled with the government's report Friday showing the first monthly net loss in jobs in more than four years, is proof that recession is now a reality.
"My forecast had been that the recession would begin this quarter, but the hard data wasn't there yet," said Keith Hembre, chief economist of First American Funds. "But now we're seeing that. The service sector is a much larger component of the economy [than manufacturing] and this is very much a recession reading."
The National Bureau of Economic Research is the official arbiter of whether the economy has entered recession. But the NBER typically does not declare a recession until well after one has begun.
Weakness spreading
Economists took the latest report as a sign that problems are no longer restricted to just housing and manufacturing.
"We're definitely seeing conditions spread to more parts of the economy. The big drop in business activity, that's a huge red flag," said Gus Faucher, director of macroeconomics for Moody's Economy.com.
Faucher said his firm now believes the economy is in a recession but he believes it's possible that growth will resume in the second half of this year.
http://money.cnn.com/2008/02/05/news/econo...ssion/index.htm
Full Version: Economists: It's Official, RECESSION IS HERE!
How Deep Will the Recession Go?
You can bet the house, whatever its current value, that hard times are on the way -- more layoffs, fewer new jobs, lower wages, tighter family budgets, more debt, and higher poverty levels.
Economic growth stalled in the last three months of 2007, adding only 0.6 percent to output after correcting for inflation. In December, job growth ground to a near halt, and the economy lost 17,000 jobs in January, as construction suffered large job losses. The unemployment rate jumped to 5.0 percent for the first time in three years, and would be much higher if the labor force participation rate -- the fraction of the population either working or actively looking for work -- were at the same level as when George Bush took office. On top of that, retail sales tanked in December as worried consumers cut back on holiday spending. Finally, the terminally volatile stock market registered one of its worst Januaries on record, enough to induce a panicked Fed to make an emergency interest-rate cut.
Pop Goes the Housing Bubble
Besides punishing people who work for a living and those who can't even find a job, the 2008 economy will face a financial crisis brought on by the bursting of the housing bubble. How bad will it get? Pretty bad. A decade long stagnation, as Harvard economist Larry Summers suggests, or "the worst housing bust ever," as NYU professor Noureil Roubini suggests, are not out of the question.
"Future historians are likely to look back on the final year of the Bush administration as a moment not unlike 1930, when government dithered while a financial crisis deepened," (Robert Kuttner) warns.
http://www.alternet.org/workplace/76235?page=1
You can bet the house, whatever its current value, that hard times are on the way -- more layoffs, fewer new jobs, lower wages, tighter family budgets, more debt, and higher poverty levels.
Economic growth stalled in the last three months of 2007, adding only 0.6 percent to output after correcting for inflation. In December, job growth ground to a near halt, and the economy lost 17,000 jobs in January, as construction suffered large job losses. The unemployment rate jumped to 5.0 percent for the first time in three years, and would be much higher if the labor force participation rate -- the fraction of the population either working or actively looking for work -- were at the same level as when George Bush took office. On top of that, retail sales tanked in December as worried consumers cut back on holiday spending. Finally, the terminally volatile stock market registered one of its worst Januaries on record, enough to induce a panicked Fed to make an emergency interest-rate cut.
Pop Goes the Housing Bubble
Besides punishing people who work for a living and those who can't even find a job, the 2008 economy will face a financial crisis brought on by the bursting of the housing bubble. How bad will it get? Pretty bad. A decade long stagnation, as Harvard economist Larry Summers suggests, or "the worst housing bust ever," as NYU professor Noureil Roubini suggests, are not out of the question.
"Future historians are likely to look back on the final year of the Bush administration as a moment not unlike 1930, when government dithered while a financial crisis deepened," (Robert Kuttner) warns.
http://www.alternet.org/workplace/76235?page=1
If the U.S. followed the practices of some other nations, and didn't count part-time employment as employment, you'd find the unemployment rate to hover around 10%. If you brought those back into the equation who are classified as no longer looking for work (not in the Unemployment System), the rate would be even higher.
Maybe we should do as the Soviets did. Just declare there is no unemployment and cancel all unemployment benefits to prove it!
Retired Monk
"Ideology is a disease"
Maybe we should do as the Soviets did. Just declare there is no unemployment and cancel all unemployment benefits to prove it!
Retired Monk
"Ideology is a disease"
The buck stops here: This is Bush's recession, his legacy.
By Paul B. Farrell, MarketWatch
Last update: 1:41 p.m. EST March 4, 2008
It could be a chapter in a future edition of Jacob Weisberg's "The Bush Tragedy," with new comparisons to "Henry V" and other great Shakespearean tragedies. In a few sentences, the opening lines could highlight why this is now Bush's recession, and his alone.
Last week Bush told reporters: "I don't think we're headed to recession." But when one tried to puncture the denial, mentioning that America's energy analysts were predicting $4 gas, our oil-man president stopped him: "Wait, what did you just say? You're predicting $4-a-gallon gasoline?" No, Mr. President, experts are. "That's interesting. I hadn't heard that."
Once again, as in a classic tragedy, crucial facts never quite make it to the king's chambers in time, setting the stage for a fateful turn of events, propelling the plot to its tragic climax.
Indeed, the next 12 acts of this tragedy have already been written. And though many folks are in denial, the consequences are painfully clear. Last week we forecast a global recession. Reader response was overwhelming. Read previous Paul B. Farrell.
One alerted us to a powerful economic report that reads like the plot lines in a Shakespearean tragedy. Twelve acts relentlessly drive the action forward in a dark yet realistic plot reading like a brutal military-style assault on markets and economies worldwide.
In The RGE Monitor, the Roubini Global Economics newsletter published by NYU Prof. Nouriel Roubini, we read of "The Rising Risk of a Systemic Financial Meltdown: Twelve Steps to Financial Disaster," a report that will never make it into any While House briefings.
Why? Roubini's 12-act drama is chilling, apocalyptic, coming at us in 12 relentless waves, tearing down the world's economic and financial system, triggering a severe recession in America that spreads globally, impacting every corner of every economy across the globe and creating havoc in world financial markets, leaving nothing intact.
This is Bush's legacy, an economic disaster no one can stop. And the more they try, the worse it gets.
Over the top? You decide. Then after you read Roubini's dark 12-act plot, we urge you to rethink your investment strategies for the years to come. Why? He warns: "The current recession looks fundamentally more severe than the [last] two for three reasons: we are experiencing the worst housing recession ever in U.S. history; a shopped-out, saving-less and debt-burdened consumer is now in financial trouble and retrenching; and we have a severe systemic financial crisis.
Forget about Washington's happy-talk about avoiding a recession. They got us into this mess and don't know how to get us out.
You must read Roubini's dramatic plot, it's pure Shakespeare. Then add a comment: Tell us what you're doing to protect yourself. Worried you're just a "bit player" in Bush's recession? How this 12-act drama plays out will have an enormous impact on your future:
1. Home prices will fall 20% to 30% from the peak
Roughly $4 trillion to $6 trillion of household wealth will vanish. Large home builders may go bankrupt, triggering further declines in home-builder stocks. Even Fed Chairman Ben Bernanke admitted last week that housing prices could fall into 2009.
2. Prime and near-prime mortgages losses
"This is a generalized mortgage crisis and meltdown, not just a subprime one," warns Roubini. "About 60% of all mortgage origination from 2005 through 2007 had these reckless and toxic features. And losses among all sorts of mortgages will sharply increase as home prices fall sharply and the economy." Add another $300 billion in losses.
3. Consumer debt defaults will increase sharply
http://www.marketwatch.com/news/story/trag...p;dist=printTop
By Paul B. Farrell, MarketWatch
Last update: 1:41 p.m. EST March 4, 2008
It could be a chapter in a future edition of Jacob Weisberg's "The Bush Tragedy," with new comparisons to "Henry V" and other great Shakespearean tragedies. In a few sentences, the opening lines could highlight why this is now Bush's recession, and his alone.
Last week Bush told reporters: "I don't think we're headed to recession." But when one tried to puncture the denial, mentioning that America's energy analysts were predicting $4 gas, our oil-man president stopped him: "Wait, what did you just say? You're predicting $4-a-gallon gasoline?" No, Mr. President, experts are. "That's interesting. I hadn't heard that."
Once again, as in a classic tragedy, crucial facts never quite make it to the king's chambers in time, setting the stage for a fateful turn of events, propelling the plot to its tragic climax.
Indeed, the next 12 acts of this tragedy have already been written. And though many folks are in denial, the consequences are painfully clear. Last week we forecast a global recession. Reader response was overwhelming. Read previous Paul B. Farrell.
One alerted us to a powerful economic report that reads like the plot lines in a Shakespearean tragedy. Twelve acts relentlessly drive the action forward in a dark yet realistic plot reading like a brutal military-style assault on markets and economies worldwide.
In The RGE Monitor, the Roubini Global Economics newsletter published by NYU Prof. Nouriel Roubini, we read of "The Rising Risk of a Systemic Financial Meltdown: Twelve Steps to Financial Disaster," a report that will never make it into any While House briefings.
Why? Roubini's 12-act drama is chilling, apocalyptic, coming at us in 12 relentless waves, tearing down the world's economic and financial system, triggering a severe recession in America that spreads globally, impacting every corner of every economy across the globe and creating havoc in world financial markets, leaving nothing intact.
This is Bush's legacy, an economic disaster no one can stop. And the more they try, the worse it gets.
Over the top? You decide. Then after you read Roubini's dark 12-act plot, we urge you to rethink your investment strategies for the years to come. Why? He warns: "The current recession looks fundamentally more severe than the [last] two for three reasons: we are experiencing the worst housing recession ever in U.S. history; a shopped-out, saving-less and debt-burdened consumer is now in financial trouble and retrenching; and we have a severe systemic financial crisis.
Forget about Washington's happy-talk about avoiding a recession. They got us into this mess and don't know how to get us out.
You must read Roubini's dramatic plot, it's pure Shakespeare. Then add a comment: Tell us what you're doing to protect yourself. Worried you're just a "bit player" in Bush's recession? How this 12-act drama plays out will have an enormous impact on your future:
1. Home prices will fall 20% to 30% from the peak
Roughly $4 trillion to $6 trillion of household wealth will vanish. Large home builders may go bankrupt, triggering further declines in home-builder stocks. Even Fed Chairman Ben Bernanke admitted last week that housing prices could fall into 2009.
2. Prime and near-prime mortgages losses
"This is a generalized mortgage crisis and meltdown, not just a subprime one," warns Roubini. "About 60% of all mortgage origination from 2005 through 2007 had these reckless and toxic features. And losses among all sorts of mortgages will sharply increase as home prices fall sharply and the economy." Add another $300 billion in losses.
3. Consumer debt defaults will increase sharply
http://www.marketwatch.com/news/story/trag...p;dist=printTop
Nope. I'm sorry. You are wrong. It's not a recession until the guy that got straight C's in Econ say so.
I know $3 Trillion is shitload of money, but this article I just found on NY Times really puts it in perspective....
The $2 Trillion Nightmare
Here's the excerpt I like:
The $2 Trillion Nightmare
Here's the excerpt I like:
QUOTE
Mr. Hormats mentioned Social Security and Medicare, saying that both could have been put “on a more sustainable basis.” And he cited the committee’s own calculations from last fall that showed that the money spent on the war each day is enough to enroll an additional 58,000 children in Head Start for a year, or make a year of college affordable for 160,000 low-income students through Pell Grants, or pay the annual salaries of nearly 11,000 additional border patrol agents or 14,000 more police officers.
Or the more likely scenario - if we weren't at war we could have given the richest 3000 people in the country $1million more in tax cuts.
QUOTE(Jimmy @ Wednesday, 5 March 2008, 3:46 pm) 
Or the more likely scenario - if we weren't at war we could have given the richest 3000 people in the country $1million more in tax cuts.
Or pay off less than 1/3 of the national debt.
Stocks hit lowest levels in over a year
Wall Street tumbles to 2006 levels as investors eye the biggest job losses in 5 years and more financial sector problems.
NEW YORK (CNNMoney.com) -- Stocks tanked Friday, falling to the worst levels in nearly 18 months after a weak February employment report and more financial sector woes exacerbated recession fears.
Oil spiked to a record $106 a barrel before retreating a bit, the dollar continued its plunge and traders continued to pour money into government bonds.
The Dow Jones industrial average (INDU) lost 1.2%, falling to its lowest point since Oct. 11, 2006.
The broader Standard & Poor's 500 (SPX) index fell 0.8%, closing at its lowest level since August 23, 2006. The Nasdaq composite (COMP) lost almost 0.4% and ended at its lowest point since Sept. 11, 2006.
http://money.cnn.com/2008/03/07/markets/ma...sion=2008030717
Wall Street tumbles to 2006 levels as investors eye the biggest job losses in 5 years and more financial sector problems.
NEW YORK (CNNMoney.com) -- Stocks tanked Friday, falling to the worst levels in nearly 18 months after a weak February employment report and more financial sector woes exacerbated recession fears.
Oil spiked to a record $106 a barrel before retreating a bit, the dollar continued its plunge and traders continued to pour money into government bonds.
The Dow Jones industrial average (INDU) lost 1.2%, falling to its lowest point since Oct. 11, 2006.
The broader Standard & Poor's 500 (SPX) index fell 0.8%, closing at its lowest level since August 23, 2006. The Nasdaq composite (COMP) lost almost 0.4% and ended at its lowest point since Sept. 11, 2006.
http://money.cnn.com/2008/03/07/markets/ma...sion=2008030717
The Bush tax increase on all Americans
The National Debt increases an average of $1.54 billion per day; your individual share is $30,531 (that’s for every man, woman and child in America). When Bush took office in January 2002 the national debt was $5.7 trillion; now it totals $9.3 trillion – a 63-percent increase.
When Bush took office:
• One US dollar would buy 1.13 euros but now only buys 0.64 – a 43-percent decline.
• The national average price of a gallon of gasoline was $1.09 and now stands at $3.04.
• Consumer debt stood at $1.9 trillion and now stands at $2.5 trillion – a 36-percent increase.
College tuition fees and personal debt of students after graduation have soared. In fact, the overall increase in personal debt in the US has outpaced the increase in average personal income.
Bush has dramatically increased government spending and at the same time cut certain tax rates, which mostly benefit the ultra-rich. And the rich are the only economic class which has had any real increase in wealth during his presidency. The middle- and lower-classes’ income have been flat or lost ground.
About 40 percent of the tax benefits from Bush’s 2001 and 2003 cuts went to the top one percent of earners (incomes of $850,000 and above). The top one percent has dramatically increased its total share of pre-tax earnings.
In 1980, the top one percent took home about eight percent of total earnings in the US; now, they take home 16 percent while paying a smaller share of the tax burden. Warren Buffet recently complained that he pays a lower overall tax rate as a percentage of income than his secretary.
Not counting the cost of the Iraq War, Bush has ballooned government spending – and if you add in the long-term cost of the war (such as the medical care for our veterans), we will be paying for his policies for generations to come.
The increase in prices and debt, and the decline of the dollar, are the direct effects of modern Republican economic policies. Republicans have no right to claim to be fiscally conservative.
http://www.thevillagenews.com/story.php?story_id=28797
The National Debt increases an average of $1.54 billion per day; your individual share is $30,531 (that’s for every man, woman and child in America). When Bush took office in January 2002 the national debt was $5.7 trillion; now it totals $9.3 trillion – a 63-percent increase.
When Bush took office:
• One US dollar would buy 1.13 euros but now only buys 0.64 – a 43-percent decline.
• The national average price of a gallon of gasoline was $1.09 and now stands at $3.04.
• Consumer debt stood at $1.9 trillion and now stands at $2.5 trillion – a 36-percent increase.
College tuition fees and personal debt of students after graduation have soared. In fact, the overall increase in personal debt in the US has outpaced the increase in average personal income.
Bush has dramatically increased government spending and at the same time cut certain tax rates, which mostly benefit the ultra-rich. And the rich are the only economic class which has had any real increase in wealth during his presidency. The middle- and lower-classes’ income have been flat or lost ground.
About 40 percent of the tax benefits from Bush’s 2001 and 2003 cuts went to the top one percent of earners (incomes of $850,000 and above). The top one percent has dramatically increased its total share of pre-tax earnings.
In 1980, the top one percent took home about eight percent of total earnings in the US; now, they take home 16 percent while paying a smaller share of the tax burden. Warren Buffet recently complained that he pays a lower overall tax rate as a percentage of income than his secretary.
Not counting the cost of the Iraq War, Bush has ballooned government spending – and if you add in the long-term cost of the war (such as the medical care for our veterans), we will be paying for his policies for generations to come.
The increase in prices and debt, and the decline of the dollar, are the direct effects of modern Republican economic policies. Republicans have no right to claim to be fiscally conservative.
http://www.thevillagenews.com/story.php?story_id=28797
Consumer confidence lowest since 1982
NEW YORK (CNNMoney.com) -- Consumer confidence sank to its lowest level in 26 years, according to a survey published Friday.
The University of Michigan Consumer Confidence survey revealed that high food and fuel prices, coupled with shrinking incomes and falling home values, have driven consumers to save their money rather than spend it.
"The recent acceleration in the loss in confidence indicates a longer and potentially deeper recession," said Richard Curtin, the university's consumer survey research director.
The survey's Index of Consumer Sentiment, a closely watched indicator of the economy's current health, fell to 62.6 in April, a drop of 6.9 points from the previous month and the lowest level since 1982.
The Index of Consumer Expectations, which economists use to help determine the economy's future direction, fell to 53.3 in April, a decline of 6.8 points from the previous month.
According to the survey, only 30% of consumers plan to spend their upcoming tax rebate, while the rest said they would use it to pay off debt or put it into savings.
Though the stimulus rebates, due to start arriving in mailboxes next week, will boost spending temporarily, rising prices for food, gas and other essentials along with worries about income levels could cause consumers to spend less through late 2008 and early 2009, according to Curtin.
The survey said that 90% of consumers believed the economy was in a recession, and 75% believed the economic problems will persist for at least another year.
A third of those surveyed specifically said that they were reigning in spending because of uncertainty about employment and income.
http://money.cnn.com/2008/04/25/news/econo...mer_confidence/
1982?
Who was president then? Answer: Another Republican Cowboy, Ronald Reagan.
Bush and the GOP are building a bridge to the 1980s. I hope everyone keeps that in mind when they vote this November. The three R's: Republican, Recession, Reaganonmics
NEW YORK (CNNMoney.com) -- Consumer confidence sank to its lowest level in 26 years, according to a survey published Friday.
The University of Michigan Consumer Confidence survey revealed that high food and fuel prices, coupled with shrinking incomes and falling home values, have driven consumers to save their money rather than spend it.
"The recent acceleration in the loss in confidence indicates a longer and potentially deeper recession," said Richard Curtin, the university's consumer survey research director.
The survey's Index of Consumer Sentiment, a closely watched indicator of the economy's current health, fell to 62.6 in April, a drop of 6.9 points from the previous month and the lowest level since 1982.
The Index of Consumer Expectations, which economists use to help determine the economy's future direction, fell to 53.3 in April, a decline of 6.8 points from the previous month.
According to the survey, only 30% of consumers plan to spend their upcoming tax rebate, while the rest said they would use it to pay off debt or put it into savings.
Though the stimulus rebates, due to start arriving in mailboxes next week, will boost spending temporarily, rising prices for food, gas and other essentials along with worries about income levels could cause consumers to spend less through late 2008 and early 2009, according to Curtin.
The survey said that 90% of consumers believed the economy was in a recession, and 75% believed the economic problems will persist for at least another year.
A third of those surveyed specifically said that they were reigning in spending because of uncertainty about employment and income.
http://money.cnn.com/2008/04/25/news/econo...mer_confidence/
1982?
Who was president then? Answer: Another Republican Cowboy, Ronald Reagan.
Bush and the GOP are building a bridge to the 1980s. I hope everyone keeps that in mind when they vote this November. The three R's: Republican, Recession, Reaganonmics
Unemployment Rate Hits 5.5% as 49,000 Jobs Lost
June 7, 2008
The unemployment rate surged to 5.5 percent in May from 5 percent, the largest monthly spike in more than two decades, as the economy shed 49,000 jobs for a fifth month of decline, the Labor Department reported on Friday.
Economists construed the weak monthly jobs report as an indication of the pain assailing tens of millions of Americans amid an economic downturn that most experts assume is a RECESSION.
http://www.nytimes.com/2008/06/07/business/07jobs.html
"It's the recession, stupid!"
June 7, 2008
The unemployment rate surged to 5.5 percent in May from 5 percent, the largest monthly spike in more than two decades, as the economy shed 49,000 jobs for a fifth month of decline, the Labor Department reported on Friday.
Economists construed the weak monthly jobs report as an indication of the pain assailing tens of millions of Americans amid an economic downturn that most experts assume is a RECESSION.
http://www.nytimes.com/2008/06/07/business/07jobs.html
"It's the recession, stupid!"
QUOTE (anniefey @ Saturday, 7 June 2008, 2:23 pm)
Unemployment Rate Hits 5.5% as 49,000 Jobs Lost
June 7, 2008
The unemployment rate surged to 5.5 percent in May from 5 percent, the largest monthly spike in more than two decades, as the economy shed 49,000 jobs for a fifth month of decline, the Labor Department reported on Friday.
Economists construed the weak monthly jobs report as an indication of the pain assailing tens of millions of Americans amid an economic downturn that most experts assume is a RECESSION.
http://www.nytimes.com/2008/06/07/business/07jobs.html
"It's the recession, stupid!"
June 7, 2008
The unemployment rate surged to 5.5 percent in May from 5 percent, the largest monthly spike in more than two decades, as the economy shed 49,000 jobs for a fifth month of decline, the Labor Department reported on Friday.
Economists construed the weak monthly jobs report as an indication of the pain assailing tens of millions of Americans amid an economic downturn that most experts assume is a RECESSION.
http://www.nytimes.com/2008/06/07/business/07jobs.html
"It's the recession, stupid!"
Someone smarter than me explain this. How is it that the Government is responsible for the recession? Why is it that we look to the Government to fix Oil prices? Maybe I just can't connect the dots. Be gentle....Im just questioning the point A to point B thing.
QUOTE (Abell9 @ Saturday, 7 June 2008, 7:55 pm)
Someone smarter than me explain this. How is it that the Government is responsible for the recession? Why is it that we look to the Government to fix Oil prices? Maybe I just can't connect the dots. Be gentle....Im just questioning the point A to point B thing.
It's about policy. Policy that has the power to promote a certain plan or direction.
In that, what we see again is that Bush policy, this time economic policy, has miserably failed!
QUOTE (Abell9 @ Saturday, 7 June 2008, 10:55 pm)
Someone smarter than me explain this. How is it that the Government is responsible for the recession? Why is it that we look to the Government to fix Oil prices? Maybe I just can't connect the dots. Be gentle....Im just questioning the point A to point B thing.
FDR is credited with ending the Great Depression by government action. First spending on social programs, then on the military. Since then, any economic hiccup is blamed on the federal government and is deemed the responsibility of elected officials to fix. The only people who disagree with this seem to be the libertarian fiscal conservatives, who think the government should just get out of the way.
Inflation is easy to blame on Bush. There are more dollars now in circulation and owed by the government than ever, which dilutes their value. But inflation does not equal recession. In the Carter years we had very high inflation but no recession.
QUOTE (Spud Demon @ Sunday, 8 June 2008, 6:26 am)
FDR is credited with ending the Great Depression by government action. First spending on social programs, then on the military. Since then, any economic hiccup is blamed on the federal government and is deemed the responsibility of elected officials to fix. The only people who disagree with this seem to be the libertarian fiscal conservatives, who think the government should just get out of the way.
Inflation is easy to blame on Bush. There are more dollars now in circulation and owed by the government than ever, which dilutes their value. But inflation does not equal recession. In the Carter years we had very high inflation but no recession.
Inflation is easy to blame on Bush. There are more dollars now in circulation and owed by the government than ever, which dilutes their value. But inflation does not equal recession. In the Carter years we had very high inflation but no recession.
Preciate it.
QUOTE (Spud Demon @ Sunday, 8 June 2008, 4:26 am)
FDR is credited with ending the Great Depression by government action. First spending on social programs, then on the military. Since then, any economic hiccup is blamed on the federal government and is deemed the responsibility of elected officials to fix. The only people who disagree with this seem to be the libertarian fiscal conservatives, who think the government should just get out of the way.
Inflation is easy to blame on Bush. There are more dollars now in circulation and owed by the government than ever, which dilutes their value. But inflation does not equal recession. In the Carter years we had very high inflation but no recession.
Inflation is easy to blame on Bush. There are more dollars now in circulation and owed by the government than ever, which dilutes their value. But inflation does not equal recession. In the Carter years we had very high inflation but no recession.
It should be noted that todays economic reality is at the very least exacerbated by the dumping of hundreds of Billions of US dollars into the rat hole we call Iraq!
It wouldn't matter where you put that much money, if it doesn't return in one way or another, either as goods or services, it will eventually effect even our massive economy in exactly the same way throwing away your own pay check would effect your personal economy. You would be deeper in debt to cover the money spent that you don't have.
Bush Economy Sheds 62K Jobs in June; Sixth Straight Monthly Decline
July 5, 2008
Private sector job gains in the Bush years may fall below 3 million by November. The employment to population ratio (EPOP) fell to 62.4 percent in June, its lowest level in more than three years, as the economy lost another 62,000 jobs in June. This was the sixth consecutive month in which the economy lost jobs. The private sector lost 91,000 jobs in June. With the April and May numbers revised down by 76,000, the job loss in the private sector over the last three months has been 273,000, an average of 91,000 a month. The private sector has now shed 578,000 jobs since employment peaked in November.
Job loss continues to be led by construction and manufacturing, but most sectors are now losing jobs. Construction lost 43,000 jobs in June, with both residential and non-residential construction now shedding jobs. Employment in residential construction has fallen by 15.8 percent since its peak in February of 2006. By comparison, real spending is down by almost 50 percent over this period. The fact that employment has fallen so much less than production undoubtedly reflects the fact that many undocumented workers never showed up in the employment data.
Losses were widespread across sectors. Manufacturing lost 33,000 jobs in June, a number that would have been larger had it not been for the return of about 15,000 striking workers in the auto sector.
The retail sector lost 7,500 jobs, with 4,800 of the lost jobs in auto dealers. Auto dealerships have shed just 25,900 jobs (2.1 percent of total employment) over the last year. Given the sharp falloff in sales this number is likely to increase substantially in the months ahead.
http://www.alternet.org/workplace/90510/
July 5, 2008
Private sector job gains in the Bush years may fall below 3 million by November. The employment to population ratio (EPOP) fell to 62.4 percent in June, its lowest level in more than three years, as the economy lost another 62,000 jobs in June. This was the sixth consecutive month in which the economy lost jobs. The private sector lost 91,000 jobs in June. With the April and May numbers revised down by 76,000, the job loss in the private sector over the last three months has been 273,000, an average of 91,000 a month. The private sector has now shed 578,000 jobs since employment peaked in November.
Job loss continues to be led by construction and manufacturing, but most sectors are now losing jobs. Construction lost 43,000 jobs in June, with both residential and non-residential construction now shedding jobs. Employment in residential construction has fallen by 15.8 percent since its peak in February of 2006. By comparison, real spending is down by almost 50 percent over this period. The fact that employment has fallen so much less than production undoubtedly reflects the fact that many undocumented workers never showed up in the employment data.
Losses were widespread across sectors. Manufacturing lost 33,000 jobs in June, a number that would have been larger had it not been for the return of about 15,000 striking workers in the auto sector.
The retail sector lost 7,500 jobs, with 4,800 of the lost jobs in auto dealers. Auto dealerships have shed just 25,900 jobs (2.1 percent of total employment) over the last year. Given the sharp falloff in sales this number is likely to increase substantially in the months ahead.
http://www.alternet.org/workplace/90510/
Not Your Grandma's Depression
This isn't so funny anymore. Intimations of a July banking collapse rumbled though the Internet this weekend while mainstream news orgs like The New York Times and CNN pulled their puds over swift boats and Amy Winehouse's performance technique. Something is happening, and you don't know what it is, do you Mr. Jones...? to quote the master.
What's happening is that American society is sliding into a greater depression than the one Grandma lived through. On the technical side, there has been unending controversy as to whether we're gripped by inflation or deflation. It's certainly deceptive. Food and gasoline prices are rising faster than the rivers of Iowa. But the prices of assets, like houses, stocks, jet-skis, GMC Yukons and pre-owned Hummel figurines are cratering as America turns into Yard Sale Nation.
We're a very different country than we were in 1932. In that earlier crisis of capital, few people had any money but our society still possessed fantastic resources. We had plenty of everything that our land could provide: a treasure trove of mineral ores and the equipment to refine it all, a wealth of oil and gas still in the ground, and all the rigs needed to get at it, manpower galore (and of a highly disciplined, regimented kind), with fine-tuned factories waiting for orders. We had a railroad system that was the envy of the world and millions of family farms (even despite the dust bowl) owned by people who retained age-old skills not yet degraded by agribusiness. We had fully-functional cities with operating waterfronts and ten thousand small towns with local economies, local newspapers, and local culture.
We had a crisis of capital in the 1930s for reasons that are still debated today. My own guess is a combination of a bad debt workout that sucked "money" into a black hole (since money is loaned into existence, but vanishes if the loans are not systematically paid back) plus a gross saturation of markets, meaning that every American who had wanted to buy a car or an electric toaster had done so and there was no one left to sell to. (The first round of globalism -- 1870 - 1914 -- had shut down after the fiasco of World War One.)
Our debt problems today are of a magnitude so extreme that astronomers would be hard pressed to calculate them. By any rational measure our society is comprehensively bankrupt. From the federal treasury down to the suburban cul-de-sacs so much loaned money is either not being paid back, or is at risk of never being paid back, that the suckage of presumed wealth has passed through an event horizon out of the known universe into some other realm of space-time, never to be seen again in this realm. This would seem to be the very essence of monetary deflation -- money defaulted out-of-existence.
This condition is partly disguised by both the loss of credibility of US currency and real-world scarcities of oil and food, but the upshot will be something at least twice as bad as the Great Depression of the 1930s: people with no money in a land with no resources (with manpower that has no discipline), hardly any family farms left, cities that are basket-cases of bottomless need, comatose small towns stripped of their assets and social capital, an aviation industry on the verge of death, and a railroad system that is the laughingstock of the world. Not to mention the mind-boggling liabilities of suburbia and the motoring infrastructure that services it.
http://jameshowardkunstler.typepad.com/
This isn't so funny anymore. Intimations of a July banking collapse rumbled though the Internet this weekend while mainstream news orgs like The New York Times and CNN pulled their puds over swift boats and Amy Winehouse's performance technique. Something is happening, and you don't know what it is, do you Mr. Jones...? to quote the master.
What's happening is that American society is sliding into a greater depression than the one Grandma lived through. On the technical side, there has been unending controversy as to whether we're gripped by inflation or deflation. It's certainly deceptive. Food and gasoline prices are rising faster than the rivers of Iowa. But the prices of assets, like houses, stocks, jet-skis, GMC Yukons and pre-owned Hummel figurines are cratering as America turns into Yard Sale Nation.
We're a very different country than we were in 1932. In that earlier crisis of capital, few people had any money but our society still possessed fantastic resources. We had plenty of everything that our land could provide: a treasure trove of mineral ores and the equipment to refine it all, a wealth of oil and gas still in the ground, and all the rigs needed to get at it, manpower galore (and of a highly disciplined, regimented kind), with fine-tuned factories waiting for orders. We had a railroad system that was the envy of the world and millions of family farms (even despite the dust bowl) owned by people who retained age-old skills not yet degraded by agribusiness. We had fully-functional cities with operating waterfronts and ten thousand small towns with local economies, local newspapers, and local culture.
We had a crisis of capital in the 1930s for reasons that are still debated today. My own guess is a combination of a bad debt workout that sucked "money" into a black hole (since money is loaned into existence, but vanishes if the loans are not systematically paid back) plus a gross saturation of markets, meaning that every American who had wanted to buy a car or an electric toaster had done so and there was no one left to sell to. (The first round of globalism -- 1870 - 1914 -- had shut down after the fiasco of World War One.)
Our debt problems today are of a magnitude so extreme that astronomers would be hard pressed to calculate them. By any rational measure our society is comprehensively bankrupt. From the federal treasury down to the suburban cul-de-sacs so much loaned money is either not being paid back, or is at risk of never being paid back, that the suckage of presumed wealth has passed through an event horizon out of the known universe into some other realm of space-time, never to be seen again in this realm. This would seem to be the very essence of monetary deflation -- money defaulted out-of-existence.
This condition is partly disguised by both the loss of credibility of US currency and real-world scarcities of oil and food, but the upshot will be something at least twice as bad as the Great Depression of the 1930s: people with no money in a land with no resources (with manpower that has no discipline), hardly any family farms left, cities that are basket-cases of bottomless need, comatose small towns stripped of their assets and social capital, an aviation industry on the verge of death, and a railroad system that is the laughingstock of the world. Not to mention the mind-boggling liabilities of suburbia and the motoring infrastructure that services it.
http://jameshowardkunstler.typepad.com/
A Bear Market, Officially
It's now officially a bear market:
How bad was it? Pretty bad, says the Times:
Weren't people saying the financials were starting to look good? Didn't I hear something like that from Larry Kudlow or one of his water-bearing guests?
So what are the Fed and Treasury officials doing? Jawboning the markets, but to little or no effect:
And the dollar looks set to make another run south. Glad I am getting paid in an Asian currency. Nice to get a pay raise for doing nothing but being in the right place at the right time.
http://agonist.org/sean_paul_kelley/200807...rket_officially
It's now officially a bear market:
QUOTE
Widespread fear about the health of the mortgage industry took hold Wednesday afternoon, and investors could not shake the jitters. The Dow Jones industrial average, already swimming deep in negative territory, dived 75 points in the final 30 minutes of trading and finished down 2.1 percent at its lowest close of the year. The sell-off marked the third consecutive day that trouble at big mortgage lenders has resulted in steep volatility in the stock markets. Slumping shares of financial firms dragged the Standard & Poor’s 500-stock index, the broadest measure of the equity markets, into its first official bear market since 2002.
How bad was it? Pretty bad, says the Times:
QUOTE
Freddie Mac, the big buyer of home mortgages, was the worst performing stock in the S.& P. 500. Its shares dropped 23.8 percent, or $3.20, to $10.26. Freddie’s stock has lost a quarter of its total value in the last week alone.
Fannie Mae, Freddie’s sister company, tumbled 13.1 percent, or $2.31, to $15.31 a share. Its stock is down 16 percent since last Thursday.
Fannie Mae, Freddie’s sister company, tumbled 13.1 percent, or $2.31, to $15.31 a share. Its stock is down 16 percent since last Thursday.
Weren't people saying the financials were starting to look good? Didn't I hear something like that from Larry Kudlow or one of his water-bearing guests?
So what are the Fed and Treasury officials doing? Jawboning the markets, but to little or no effect:
QUOTE
The steep sell-off came as a disappointment after Tuesday’s session, when reassuring remarks from Ben S. Bernanke, the Federal Reserve chairman, and Henry S. Paulson, the Treasury secretary, led to a 152-point rally in the Dow. Mr. Bernanke, in particular, had hoped to soothe fears about the mortgage crisis by announcing plans for the Fed to restrict exotic mortgages and high-cost loans, an effort to help resuscitate the ailing housing market.
And the dollar looks set to make another run south. Glad I am getting paid in an Asian currency. Nice to get a pay raise for doing nothing but being in the right place at the right time.
http://agonist.org/sean_paul_kelley/200807...rket_officially
Bush Cheerleads While the Economy Dives
Posted July 21, 2008
I was extremely confused by Bush's rosy economic speech. Here my local bank, IndyMac, is collapsing, with distraught customers waiting in line for hours last week to get their money. Gas at my neighborhood pump has surged to nearly $5 a gallon, the price of oil plunging aside. California's unemployment rate just jumped to a new dispiriting high of nearly 7 percent. Then friends are losing their jobs because a real estate mogul is having his own billion-dollar cash meltdown and can't pay his debts. And well, why does a major American newspaper need all those journalists anyway?
And recently the New York Times reported that people worried about losing their homes are shopping for roommates so they can make the mortgage. Good thing we've got a full basement and I know a few college kids because the way things are going it just might come to that.
But Bush thinks we're all going to be OK. And the two-term president who didn't realize that gas hit 4 bucks a gallon long after most teenagers were begging their parents for more gas money must know what he's talking about. It's simply our attitude that's wrong.
Even as fed chairman Ben Bernake was working strenuously to avoid using the word "recession," Bush was telling Americans not to fret. We're only going through a "time of uncertainty," the president insisted. Those failing banks and mortgage lenders are actually a sign that the financial markets are "basically sound."
I wonder what it would take for Bush to admit the country's in crisis and to do something serious about it. Other than tell people to head over to the mall or to give us a pep talk. Which doesn't seem to have solved the foreclosure crisis or shored up the banks any. But then this would require Bush to interact with ordinary Americans a little. To see their pain.
Like the middle-aged woman in a pantsuit I saw in front of the pharmacy a few mornings ago. I had to pick up a prescription. (Which, speaking of skyrocketing consumer costs, would have cost $130 more if I didn't have such fabulous, high-priced health insurance.) She was sitting on the concrete leaning against a wall. She looked dazed, her hair was sticking out and her skin was red and splotchy -- the way people's faces are when they've been in the elements too long. She looked like someone's wife or mother who had fallen on hard times. I had never seen her before, but I'm seeing more and more people like her in my neighborhood.
She didn't look up when I walked by. She was too busy eating ravenously out of a pudding cup.
http://www.huffingtonpost.com/mona-gable/b...e_b_114095.html
Posted July 21, 2008
I was extremely confused by Bush's rosy economic speech. Here my local bank, IndyMac, is collapsing, with distraught customers waiting in line for hours last week to get their money. Gas at my neighborhood pump has surged to nearly $5 a gallon, the price of oil plunging aside. California's unemployment rate just jumped to a new dispiriting high of nearly 7 percent. Then friends are losing their jobs because a real estate mogul is having his own billion-dollar cash meltdown and can't pay his debts. And well, why does a major American newspaper need all those journalists anyway?
And recently the New York Times reported that people worried about losing their homes are shopping for roommates so they can make the mortgage. Good thing we've got a full basement and I know a few college kids because the way things are going it just might come to that.
But Bush thinks we're all going to be OK. And the two-term president who didn't realize that gas hit 4 bucks a gallon long after most teenagers were begging their parents for more gas money must know what he's talking about. It's simply our attitude that's wrong.
Even as fed chairman Ben Bernake was working strenuously to avoid using the word "recession," Bush was telling Americans not to fret. We're only going through a "time of uncertainty," the president insisted. Those failing banks and mortgage lenders are actually a sign that the financial markets are "basically sound."
I wonder what it would take for Bush to admit the country's in crisis and to do something serious about it. Other than tell people to head over to the mall or to give us a pep talk. Which doesn't seem to have solved the foreclosure crisis or shored up the banks any. But then this would require Bush to interact with ordinary Americans a little. To see their pain.
Like the middle-aged woman in a pantsuit I saw in front of the pharmacy a few mornings ago. I had to pick up a prescription. (Which, speaking of skyrocketing consumer costs, would have cost $130 more if I didn't have such fabulous, high-priced health insurance.) She was sitting on the concrete leaning against a wall. She looked dazed, her hair was sticking out and her skin was red and splotchy -- the way people's faces are when they've been in the elements too long. She looked like someone's wife or mother who had fallen on hard times. I had never seen her before, but I'm seeing more and more people like her in my neighborhood.
She didn't look up when I walked by. She was too busy eating ravenously out of a pudding cup.
http://www.huffingtonpost.com/mona-gable/b...e_b_114095.html
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