We can all remember...
George Bush: The economy is structurally sound
http://www.youtube.com/watch?v=oSMpBUURRf0
John McCain: saying the same thing the day Lehman Brothers collapsed
http://www.dailymail.co.uk/news/worldnews/article-1056475/McCain-calls-U-S-economy-fundamentally-sound-day-Lehman-Brothers-declared-bankrupt.html
Ben Bernanke: (2005) House prices will slow and stabilize...I'm confident in the bank regulators... (2006) Consumer spending will continue to grow...auto makers are recovering...
(2007) We expect moderate growth going forward... our assessment...subprime mortgage issues aren't spreading...global economy should be strong...US economy strengthening in 2008.. you get the picture.
http://www.youtube.com/watch?v=HQ79Pt2GNJo&feature=related
What did Bernanke say this week? The sharp declines may be slowing...I am optimistic about our economy...
http://www.federalreserve.gov/newsevents/speech/bernanke20090414a.htm
Jim Kramer: The housing bottom is in..
http://www.huffingtonpost.com/2009/06/03/jim-cramer-buy-a-house-no_n_210768.html
We could go on and on about this. Bottom line is that there is a lot of spin that leaders want us to hear.
Think things are getting better? Want to know where people are getting money from to increase spending? Foreclosures are still rising. Don't pay your home payment and you have more money.
http://www.zerohedge.com/article/march-foreclosures-surge-absolute-record-369491-19-jump-february
Thursday, April 15, 2010
Friday, April 2, 2010
Who is to Blame??? Part I Federal Level
A common past-time is to assign blame to the financial crisis. There is plenty of blame to pass around.
The Government - Was seemingly asleep and the wheel and didn't see this coming. That's like not seeing a 747 taking off when at a major airport and standing on the runway. Unfortunately these are the same people that we are applauding in their efforts to solve the problem. The Government players involved are either inept or corrupt...or a combination of both...likely.
We can't just blame the current Government players either. We could go back for a lot of years, but we'll start with Nixon. Nixon took put us squarely on the path of not having real money to back up our currency. By increasing the money supply we can make things look like real economic growth. We settled for inflation as our homes suddenly had cash. Maybe we are making less in our jobs in buying power, but our salaries gradually increased and our home became "free" savings accounts. We were content while the very wealthy were taking the "real wealth". He who has money can more easily make more money.
Ford and Carter brought us inept leadership. Government became "demonized" and led to the Reagan Revolution which in turn brought a dismantling of regulations designed to keep the rich from exploiting the rest. Bush I led to more weak leadership which led us to vote for Clinton, who temporarily showed us we can have what ever we want without much real consequence beyond embarrassment. Oh yes, Clinton gave us the idea we could buy homes without really having the means to pay for them. The liberal side was excited about health care possibilities, abortion rights expansion, and liberal justices. They didn't wince much as our businesses were being sold overseas as certain sacred issues were being championed.
Bush brought us politics where the "elite" were the base. Regulations were further dismantled. Bush gave quiet concern about the inflating housing bubble, but didn't really put anything substantial together to combat the situation. Wall Street gained free licensed to do what they wanted. The Christian Right didn't wince as abortion rights were minorly restricted and the rank and file saw tax breaks...while the rich weren't paying much either. The gap between rich and poor deepened and widened.
Obama comes on the scene. Due to just down right evil practices on Wall Street, we had a chance to make real changes in Wall Street regulations. Obama teamed with Wall Street for policy leadership. Now the arsonists are helping craft fire safety laws. The liberals don't care as they now have their health care system change. Never mind that this will put billions of dollars from the backs of big business and the rich to the rank and file. He is championing the very people who did nothing to stop the crisis as those where are leading us out of it, while we had the biggest transfer of wealth from the rank and file to the elite in history.
Houston! We have a major Washington DC problem. Problem is the rocket has already exploded.
The Government - Was seemingly asleep and the wheel and didn't see this coming. That's like not seeing a 747 taking off when at a major airport and standing on the runway. Unfortunately these are the same people that we are applauding in their efforts to solve the problem. The Government players involved are either inept or corrupt...or a combination of both...likely.
We can't just blame the current Government players either. We could go back for a lot of years, but we'll start with Nixon. Nixon took put us squarely on the path of not having real money to back up our currency. By increasing the money supply we can make things look like real economic growth. We settled for inflation as our homes suddenly had cash. Maybe we are making less in our jobs in buying power, but our salaries gradually increased and our home became "free" savings accounts. We were content while the very wealthy were taking the "real wealth". He who has money can more easily make more money.
Ford and Carter brought us inept leadership. Government became "demonized" and led to the Reagan Revolution which in turn brought a dismantling of regulations designed to keep the rich from exploiting the rest. Bush I led to more weak leadership which led us to vote for Clinton, who temporarily showed us we can have what ever we want without much real consequence beyond embarrassment. Oh yes, Clinton gave us the idea we could buy homes without really having the means to pay for them. The liberal side was excited about health care possibilities, abortion rights expansion, and liberal justices. They didn't wince much as our businesses were being sold overseas as certain sacred issues were being championed.
Bush brought us politics where the "elite" were the base. Regulations were further dismantled. Bush gave quiet concern about the inflating housing bubble, but didn't really put anything substantial together to combat the situation. Wall Street gained free licensed to do what they wanted. The Christian Right didn't wince as abortion rights were minorly restricted and the rank and file saw tax breaks...while the rich weren't paying much either. The gap between rich and poor deepened and widened.
Obama comes on the scene. Due to just down right evil practices on Wall Street, we had a chance to make real changes in Wall Street regulations. Obama teamed with Wall Street for policy leadership. Now the arsonists are helping craft fire safety laws. The liberals don't care as they now have their health care system change. Never mind that this will put billions of dollars from the backs of big business and the rich to the rank and file. He is championing the very people who did nothing to stop the crisis as those where are leading us out of it, while we had the biggest transfer of wealth from the rank and file to the elite in history.
Houston! We have a major Washington DC problem. Problem is the rocket has already exploded.
Tuesday, March 2, 2010
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
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
Monday, March 1, 2010
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
Friday, February 26, 2010
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.
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.
Wednesday, February 10, 2010
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.
Monday, February 8, 2010
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.
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.
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