How Bad Can It Get???

Is this in the US???


Bank Repossess Sheriff's Patrol Cars Produced by Rob Wildeboer on Wednesday, September 23, 2009

The Alexander County Sheriff's department at the Southern tip of Illinois is trying to round up some vehicles, as most of the department's patrol cars were repossessed earlier this week. Sheriff David Barkett surrendered five Crown Victoria's emblazoned with the Sheriff's seal to First National Bank in Cairo on Tuesday of this week. The bank won't comment on the cars except to say customers in Illinois have 21 days to try and reclaim them. Barkett was left with only one county owned vehicle though a volunteer spokesman for the Sheriff says the state has been able to provide a 2004, Ford SUV to the department and he's hoping they'll be able to provide additional cars. And the spokesman says the department will try to figure out if there's a way to get their old patrol cars back. He says they took the lights off the roofs before turning the cars over to the bank. Sheriff Barkett recently laid off 11 employees, three quarters of his workforce, because of budget problems.

http://www.chicagopublicradio.org/content.aspx?audioid=36977

Is the Great Recession Over Yet?

Doesn't feel like it yet. Tax receipts not recovering yet...

We don't know if we've hit bottom yet in tax receipts

Housing is not showing a typical V recovery.....

Banks aren't loaning...

On the positive side...sort of....State Tax receipts are a lagging indicator. Won't improve typically until after the economy improves....sometimes up to 2 years later...

Housing isn't still dropping....but could....

On the negative side....banks not loaning could be a deflationary sign.....in other words....Depression....like.... The money supply is shrinking in spite of all the printing....

for more information...Mike Mish

http://globaleconomicanalysis.blogspot.com/2010/03/im-sure-glad-recession-ended.html

What's Up With the Stock Market

Most of us have heard stock market experts pointing one way or another...up or down. Recently we've been inundated with with experts saying they really don't know what is going on.

The problem is this. What is happening doesn't really happen very often. The Government is increasing the money supply in massive amounts to keep the economy going. Our dollars become worth...less. Holding onto cash causes one to lose value in the money they have in cash or in the bank at very low interest.

Unemployment and less economic activity normally is deflationary....your non cash assets decrease in value. This typically causes people to leave the stock market as the stock levels should decrease. Instead, the fear of inflation is causing people to invest in stocks to keep the value of their money up.

This is why the economy is struggling and stocks are going up. This is not indicative of a healthy economy. The situation is saying that people have little faith in the US dollar and utlimately the US economy. This is a massive disconnect from time proven normalcy. Eventually something in the marketplace will need to be correct through a stronger dollar/US economy, or a return to normal stock levels for the economic situation.

Economic Growth

From: Orange County Register

http://economy.freedomblogging.com/2010/02/10/ucla-economy-not-so-hot/26677/

All PostsUCLA: economy not so hot
February 10th, 2010, 1:00 am · 12 Comments · posted by Mary Ann Milbourn
Hopes that the strong U.S. growth in the last three months of 2009 was the beginning of a recovery dimmed today with release of a new UCLA economic indicator that suggests a pullback in January.

The new Ceridian-UCLA Pulse of Commerce Index, based on a three-month moving average, grew 3.3% in January, down from 14.6% in the previous month.

UCLA economist Edward Leamer, who worked with Ceridian data to create the index, said it didn't bode well for a strong recovery.

"Don't put your party hats on anytime soon," he said.

Unless the economy bounces back with 15% growth in February and March, Leamer said December's optimism about the strength of the recovery may be misplaced.

Leamer noted that even if the U.S. is able to sustain the index's fourth quarter growth rate of 7.3%, it will take until the third quarter of 2011 to return to the last peak in the second quarter of 2008.

The new index is based on a real-time analysis of diesel fuel consumption at 7,000 truck stops across the country. Unlike other measures, Leamer said using Ceridian's up-to-the-minute database of diesel purchases gives a real-time picture of what is going on in the economy as opposed to other indexes which are based on surveys or dated information.

Leamer said using truck diesel sales has historically proven to be a strong indicator of the gross domestic product. For instance, he said that if the indicator had been available in the second quarter of 2008, when the index turned down but the GDP was still positive, he would have known the economy was headed for serious economic trouble.(Click on chart to enlarge.)



"The Pulse of Commerce Index that crisscrosses the country is like the arteries and the goods being trucked are the lifeblood," Leamer said.

The good news is that the index signaled "all clear" in the second quarter of 2009 indicating the GDP growth in the following two quarters.

Is Unemployment Getting Better?

Last week it was announced that late November unemployment dropped. In the last post, I discussed seasonal adjustments. Unemployment actually grew, but the theory is that seasonal deviations have to be accounted for, so the rate was listed as declining.

Mike Mish provides the following charts on seasonal unemployment adjustments in January:

Above, the red line shows the adjusted figures and the blue line the unadjusted figures. The red adjusted line is less volatile and smooths out unemployment.

January unadjusted unemployment since 2003 is always higher than the adjusted figure. However, the past 2 years have seen an increasingly wider difference.

What can we surmise?

The significant drop in the seasonally adjusted figure (red) is substantial and not within the norm of previous drops. It is an impressive drop. This could mean the economy is rapidly improving, or there is something in the numbers that are taking us down an unusual path. Record numbers are long term unemployed.

We really aren't going to be able to tell what is really going on until we see what happens to the unadjusted blue line in the coming months, especially when a tradional bottom hits in May (the gap between red and blue). The last blue line (unadjusted) figures that increased that much was during a very large rise in unemployment. No wonder the markets are confused.

Friday, February 5, the national statistics for unemployment were released. The previous day, it was announced that nearly a million more jobs were destroyed in the first quarter of 2009 than what was stated by the Government. This of course is the same Government that said we weren't in recession for about eight months before finally admitting the recession had started....eight months previous. This employment news trashed the stock market with the biggest single day losses in over nine months.

Here is the confusing information we must sort through.

• U3 unemployment (the figure most quoted in the news) dropped .3%. U3 does not included long term unemployed people who have given up.
• U6 unemployment which includes those who have given up and those that are underemployed (taking a part-time job) dropped from over 17% to just over 16%.

The figures above are "seasonally adjusted" based on past seasonal trends. Some think this is a fair way of looking at employment due to seasonality differences. Others see it as manipulation.

• Non-seasonally adjusted U6 employment rose to over 18%.
• the Government (misreported past job losses and seems to always revise the figures later...upward.....worse than reported.

There are somethings going on. These confusing numbers, as misreported as they may be....signal that things might be turning around. If it is a signal, that signal is very weak at best.

What we do know is that we are about to undergo a worsening of foreclosures for homes and businesses, as well as many states are having budget problems on a huge scale. During a normal recession, state revenues don't rebound for a year or two after the deepest point of a recession.

We seem to be on a teeter totter and not sure which way the economy will fall.

Goog Economic News? Well, Maybe

Today, the Commerce Department released the economic data for the 4th quarter of 2009. At an annualized rate (the economy actually shrank by over 2% in 2009), the economy grew at a rate that would amount to a 5.7% increase in the 4th quarter.

Why be happy? Well, for one, things didn't get worse, inspite of increasing unemployment.

Why be concerned? Well, last previous quarter estimates were later revised down. Expect some downward adjustment later. Discounting the building of business inventories, the actual retail economy actually grew at a 2.2% rate. This is close to what is actually considered break even. Less than this amount it can actually be assumed the economy is not actually growing.

What to look for? If inventories grew by that much, and consumer demand doesn't pick up, it is likely thand at we will head back downward as businesses try adjust to excess inventory.

Also, the auto industry barely grew at all, coming in at 0.6 percent increase. There are a lot of old automobiles out there needing replacing.