ragerunner

Since he no longer can really lower interest rates his only real choices still left is to purchase and print. Interesting that we have comments from another economist talking about a potential market meltdown and a depression. Almost as if these are potential outcomes if Bernanke doesn't print more money. If printing is the only way left to stop these two things from happening, then what happens down the road when this option also disappears and how high will commodity prices go (food, oil, etc.) in the meantime? Bernanke ready for action, but when is in doubt Central banker to deliver key speech Friday "WASHINGTON (MarketWatch) — Federal Reserve Chairman Ben Bernanke is expected to use his highly anticipated speech from Jackson Hole, Wyo. to stress that he is willing to ride to the rescue to stabilize the economy. When, is a different matter. “Ben Bernanke is a student of history, and he is not going to be the central banker that lets financial markets melt down and the economy go into a depression,” said Mark Gertler, a professor of economics at New York University who has co-written research with the Fed chairman, who’s due to speak at 10 a.m. Eastern on Friday." http://www.marketwatch.com/story/bernanke-ready-for-action-but-when-is-in-doubt-2011-08-22?dist=afterbell

This should be interesting. Goldman shares drop on Blankfein attorney news "SAN FRANCISCO (MarketWatch) -- Goldman Sachs Group Inc. shares dropped Monday just before the closing bell following a Reuters report that Chief Executive Lloyd Blankfein has hired high-profile Washington defense attorney Reid Weingarten. Shares of Goldman Sachs closed down 4.7% at $106.51 a share. Weingarten has represented such clients as former WorldCom CEO Bernard Ebbers and former Enron accounting officer Richard Causey, according to the report." http://www.marketwatch.com/story/goldman-shares-drop-on-blankfeins-attorney-news-2011-08-22?dist=afterbell

In the past a lot of these types of forecast end up being on the high side. We shall see. J.P. Morgan further cuts U.S. growth forecast FRANKFURT (MarketWatch) -- Economists at J.P. Morgan on Friday further cut estimates for U.S. economic growth and warned that recession risks are "clearly elevated." While the outlook for third-quarter growth looks only "moderately softer" than previously projected, the economists, in a research note, said they have slashed the outlook for fourth-quarter growth to 1% from a previous projection of 2.5%. They also lowered their first-quarter 2012 growth forecast to 0.5% from 1.5%. "Declining energy prices should help to cushion some of the weakness in the economy, and the still-low levels of cyclically-sensitive spending could reduce the chances of getting a negative GDP quarter. Nonetheless, the risks of a recession are clearly elevated," they said. http://www.marketwatch.com/story/jp-morgan-further-cuts-us-growth-forecast-2011-08-19

There is no way they would have done this. I am sure its just a mistake or some strange conspiracy theory. States Go After Big Bank on Forex "The legal stakes are rising for Bank of New York Mellon Corp. in a widening controversy over the way it prices currency trades for pension funds and other big clients. On Thursday, attorneys general in Virginia and Florida filed civil suits against BNY Mellon alleging that the bank cheated pension funds in those states by choosing improper prices for currency trades the bank processed for the funds. The Virginia lawsuit, filed in a Fairfax, Va., state court, cites internal bank emails allegedly showing that senior bank officials knew about, and endorsed, a currency-trading method that hurt state pensioners. In addition to Virginia and Florida, California and Tennessee are also suing BNY Mellon and State Street Corp. over the alleged fraud." "In this case, Markopolos says BNY Mellon and State Street we’re taking about “three tenths of a percent from every forex transaction for pension funds” by back-timing the trade to benefit banks at the detriment of their pension fund clients. “It’s almost the exact same scheme as the market timing scandals of 2003,” he claims." http://online.wsj.com/article/SB10001424053111903918104576502293798149096.html

I am sure the 3,000 to 10,000 employees might feel this is foretelling were their future economy is going. You are right though, BoA have got to get cost under control. They already are needing to set aside some of the largest funds for potential RE loses of all the big banks.

Thousands Camp Out for Job Fair as Jobless Rate Rises "Thousands of unemployed waited overnight, camping out in their business suits and office heels and braving the tormenting heat in Atlanta to stand in line for a job fair Thursday. Authorities treated 20 people for heat exhaustion as they struggled to keep the line moving and get people moved inside. The incredible turnout at the job fair comes on the heels of the state labor commissioner’s announcement that Georgia’s jobless rate rose." http://abcnews.go.com/m/story?id=14336519&sid=74 Ohio home weatherization workers face layoffs as stimulus funds dry up "Community action agencies writing to the state said the layoffs would take place by Oct. 31, adding that more than 250 of the 700 already have been cut." http://www.bizjournals.com/columbus/morning_call/2011/08/ohio-home-weatherization-workers-face.html DOE approves up to 1,100 additional layoffs at Hanford "RICHLAND, Wash. -- The Department of Energy has authorized its environmental cleanup contractors at the Hanford nuclear reservation to lay off as many as 1,100 more workers in the fiscal year that begins Oct 1." http://www.yakima-herald.com/stories/2011/08/18/hanford-doe-approves-up-to-1-100-additional-layoffs

Bank of America to slash jobs: WSJ "SYDNEY (MarketWatch) -- Bank of America Corp. is planning to cut 3,500 jobs this quarter, the Wall Street Journal reported Friday citing people familiar with the situation. The bank will undertake an aggressive overhaul that could result in the elimination of at least 10,000 jobs, according to the report." http://www.marketwatch.com/story/bank-of-america-to-slash-jobs-wsj-2011-08-18 Global markets take fright at the return of the zombie banks "The activities of financial markets are often irrational. Prices go up for no apparent reason and then suddenly the mood changes. What's worrying about the latest spasm that has convulsed bourses in Europe, Asia and North America is that the sell-off is grounded in real and ever-more pressing concerns. Make no mistake, something serious is going on here." "That something can be divided into three parts. The first cause for anxiety is the global economy, and in particular the United States. The report released on Thursday by the Philadelphia Federal Reserve covers only a small part of the Eastern US but it has a good track record for charting the ups and downs of the world's biggest economy. The Philly Fed's barometer has just plunged deep into recession territory." "There are also simultaneous slowdowns going on in the rest of the world. Europe's economy has slowed to stall speed, the UK is still operating way below its pre-recession level and activity has come off the boil in China, even though to western eyes growth still looks amazingly strong in China." "Concern number one has re-ignited fears about the health of the global financial system. Again, markets have been operating for the past couple of years on the assumption that large dollops of financial help from the taxpayer and a return to growth have made the global banking system immune from a fresh collapse. This always looked questionable, and now that activity is slowing markets suspect that some banks may go under. In the 1990s, the Japanese government prevented its financial system from collapse but only at the expense of creating zombie banks, neither alive nor dead but kept functioning thanks to the largesse of the state. The reason the sell-off in financial stocks has been more pronounced than the fall in stock markets as a whole is that investors believe Europe and North America now have their own zombie banks." http://www.guardian.co.uk/business/2011/aug/19/global-markets-take-fright-banks

It will be interesting to see what/if anything comes out on this. I noticed this morning this info was already being buried in many MSM sites. Just like most of the other stuff about the banks and the FED has been. One day headline and no need to discusses it again. Ahhhh.... the good ole "MSM" acronym and accompanying conspiracy talk. This explains a lot.... and I was always wondering "why all the glee?" Don't over read the comments and there never has been any 'glee' in all of this. Just a reality check on our economy. I saw a lot of the same comments before the 2007+ recession and now we are growing closer and closer to another potential recession. As far as the conspiracy comment, if you go back and take a look at a lot of the MSM articles about banks (Goldman and things like trading software, etc.) they usually get one MSM article and then no more discussion or they are printed in a major European newspaper, but not the US. How is this a conspiracy comment, it just what happens. The same happens in reverse, many times you will see something about Europe in the US media but not in the MSM European media. Sometimes MSM of different nations don't like to print their countries dirty laundry (expecially when it comes to economic issues). I found if you really want to have a better understanding of current economic issues then its wise to look around, not just listen to CNN, FOX, MSNBC and the Wall Street journal. These and many other outlets have their own political spin they like to put on things. Branch out, read the BBC, Telegraph, Financial Times, even some of the New Zealand/Austrialia MSM outlets, your view of the world and what is going on in economics might just grow and yes you might even see somethings that didn't show up in the US media, for whatever the reason. The world is connect economy like never before, understanding what is going on across the globe does help in understanding it potential impacts our us and vis verses.

Another leading indicator takes a BIG dive. Confidence is collapsing around us Commentary: Drop in Philly Fed worrisome, but doesn’t prove recession "The 34-point drop in the Philly Fed index was the largest since October 2008, when the global economy was reeling from the failure of Lehman Bros. and the near-death of many other significant banks. The drop in the Philly Fed index to negative 30.7 in August follows a weaker-than-expected survey from the New York Federal Reserve Bank earlier in the week." http://www.marketwatch.com/story/confidence-is-collapsing-around-us-2011-08-18 Sales of existing homes fall 3.5% in July "WASHINGTON (MarketWatch) — Sales of existing homes fell 3.5% in July to an eight-month low, with a high cancellation rate again taking its toll on an already troubled market, according to data released Thursday." http://www.marketwatch.com/story/sales-of-existing-homes-fall-35-in-july-2011-08-18-1011410

It will be interesting to see what/if anything comes out on this. I noticed this morning this info was already being buried in many MSM sites. Just like most of the other stuff about the banks and the FED has been. One day headline and no need to discusses it again.

Back over 400,000 and last weeks revised up to 399,000. Jobless claims filings rise above 400,000 mark "Unemployment claims rose 9,000 to a seasonally adjusted 408,000 in the week ended Aug. 13, the Labor Department reported Thursday." "Claims in the week ended Aug. 6 were revised to 399,000 from the initial estimate of 395,000. Claims have been at or above 399,000 for 19 straight weeks." http://www.marketwatch.com/story/jobless-claims-filings-rise-above-400000-mark-2011-08-18

Wow, what a SHOCK!!!! :wink: All the info that just keeps coming out about the big boys on wall street and how they keep getting their hands slapped, but in the end they just keep passing 'payday' and always avoiding the 'go to jail' card. At least we are learning that our FED agency(s) that are there to keep a eye on things are making sure there is very little to keep an eye on. I guess is just another day for Wall Street. If we keep this up we will destroy our nation's economy and its credibility (in more ways than one). SEC may have destroyed documents, senator says Grassley: Agency may have got rid of Goldman, Madoff documents "WASHINGTON (MarketWatch) — The Securities and Exchange Commission may have destroyed documents and compromised enforcement cases involving activity at large banks and hedge funds during the height of the financial crisis in 2008, according to allegations made by a lawmaker on Wednesday." "It doesn’t make sense that an agency responsible for investigations would want to get rid of potential evidence. If these charges are true, the agency needs to explain why it destroyed documents, how many documents it destroyed over what timeframe, and to what extent its actions were consistent with the law.” Agency staff “destroyed over 9,000 files” related to preliminary agency investigations, according to a letter sent in July to Grassley, the top Republican on the Senate Judiciary Committee, and obtained by MarketWatch." http://www.marketwatch.com/story/sec-may-have-destroyed-documents-senator-says-2011-08-17?dist=afterbell

Even with gas prices dropping inflation continues on. I know my wife and I have noticed some significant increase in food prices at the grocery store in the last month or so. Of course this is on top of all the previous increase over the last year or so. Interesting to see that the increase in the PPI almost equaled the increase in consumer spending. It looks like people really aren't buying more, they are just paying more for the same amount of stuff. Producer prices climb hotter-than-forecast 0.2% "WASHINGTON (MarketWatch) — Producer prices rose 0.2% in July as a decline in energy costs didn’t immediately filter through the rest of the economy, according to government data released Wednesday." "Excluding food and energy, core PPI rose 0.4%, the largest monthly rise since January." http://www.marketwatch.com/story/producer-prices-climb-hotter-than-forecast-02-2011-08-17

German growth nearly grinds to a halt "Gross domestic product rose 0.1% in the April-June quarter from the preceding three months, the German statistics institute reported Tuesday, citing seasonally adjusted data. The figures mark a sharp slowdown after German GDP expanded 1.3% in the first quarter. “The German economy, accustomed to success, is unable to decouple from slowing global economic growth,” said Joerg Kraemer, chief economist at Commerzbank AG, in a note." http://www.marketwatch.com/story/german-growth-nearly-grinds-to-a-halt-2011-08-16 U.K. inflation accelerates to 4.4% "LONDON (MarketWatch) -- U.K. consumer price inflation accelerated to an annual rate of 4.4% in July from 4.2% in June, according to data released Tuesday by the Office for National Statistics. The increase was due to upward pressure from a number of areas, including higher housing rent and rising fees in financial services." http://www.marketwatch.com/story/uk-inflation-accelerates-to-44-2011-08-16 July is usually the end of the spring/summer housing construction peak. It has now become clear their was no rebound in new home construction this year. They also revised the previous month numbers lower. (This seems to be a pretty consistent trend, not just for housing data but for a lot of data.) Housing starts slip 1.5% in July, U.S. data show "Starts fell to a seasonally adjusted annual rate of 604,000, down from a downwardly revised 613,000 rate in June, the Commerce Department said." http://www.marketwatch.com/story/housing-starts-slip-15-in-july-us-data-show-2011-08-16 Fitch Fights S&P: USA Reaffirmed ‘AAA’ With Stable Outlook "Fitch has just reaffirmed the “AAA” rating and more important is that the outlook is STABLE." "Fitch did leave an out here to go negative in the future. It said it will review its fiscal projections in light of the Joint Select committee due by the end of November as well as the near-term and medium-term economic outlook by the end of the year. A negative outcome from the Joint Select committee or a weakening of the economy further most likely result in an outlook change to Negative from Stable. It also said that the debt ceiling is not an effective tool and it also went back to this $4.1 trillion pledge in the deficit cuts." Read more: Fitch Fights S&P: USA Reaffirmed ‘AAA’ With Stable Outlook - 24/7 Wall St. http://247wallst.com/2011/08/16/fitch-fights-sp-usa-reaffirmed-aaa-with-stable-outlook/#ixzz1VCiNNLAM

I posted a few pages back how the consumer is adding a lot of new debt onto their credit cards at this time. Something tells me a lot of this 'growth' in retail is just more debt for Main Street right now. It is not because MS is finding incomes on a nice rise.

Two data points that stand out in this index. First how fast and how far the index has dropped since spring and the HUGE plunge in the index as manufactures look forward. This is not painting a positive picture for the rest of the year. (Side note: "The future new orders and shipments indexes dropped to their lowest levels since September 2001.") Source: http://www.zerohedge.com/news/empire-state-index-resumes-downward-slide-misses-consensus-future-conditions-index-lowest-febru Empire State index negative for third month Future expectations lowest since February 2009 "The Empire State index fell to negative 7.7 in August from negative 3.8 in July, according to the manufacturing survey released Monday by the New York Federal Reserve." "A key barometer of future activity that asks manufacturers about expectations six months ahead plummeted in August to 8.7, its lowest level since February 2009. The index was 32.2 in July." http://www.marketwatch.com/story/empire-state-index-negative-for-third-month-2011-08-15

U.S. moves to sell, rent 92,000 foreclosures Administration looks for buyers for U.S.-owned foreclosed homes "WASHINGTON (MarketWatch) — Struggling to clear its inventory of foreclosed properties, the Obama administration said Wednesday it’s looking for investor ideas for converting more than 92,000 foreclosed properties owned by the U.S. government into rental units, a sign of the depths to which the U.S. housing market has sunk." http://www.marketwatch.com/story/us-moves-to-sell-rent-92000-foreclosed-homes-2011-08-10

I think the current market issues will keep the rating agencies 'caution flag' out for now. But, if France is downgraded it will be another major blow to the system. Of course there is the old saying that goes something like "a watched pot never boils over'. For next rating downgrade, S&P may look at France Commentary: France has lots of debt, and dysfunctional politics "LONDON (MarketWatch) — The U.S. is broke? Been there. Italy is bankrupt. Done that. Spain is teetering on the edge? Got the T-shirt. There is, however, one major industrial country that has so far managed to sail through the market turmoil without anyone seriously questioning its credit-worthiness: France. " "First, French debt is escalating rapidly. It might not be as big as that of some other countries yet, but it’s getting there fast. Last year it ran a deficit of 7% of GDP. French debt will total 90% of GDP this year and 95% in 2012, according to estimates by Capital Economics." http://www.marketwatch.com/story/for-next-rating-downgrade-sp-may-look-at-france-2011-08-10

If this doesn't give a glimps into how poorly our economy is starting to do again, I don't know what will. Fed: Low rates to stay through at least mid-2013 Three Fed officials dissent "WASHINGTON (MarketWatch) — The Federal Reserve on Tuesday put more clarity on what it means to hold interest rates low for an “extended period” of time, saying for the first time that it means “at least” through mid-2013. The action brought strong dissent, as Richard Fisher, Narayana Kocherlakota and Charles Plosser objected to the new terminology. In the statement, the Fed said growth was much slower than expected and the labor market had deteriorated." http://www.marketwatch.com/story/fed-low-rates-to-stay-through-at-least-mid-2013-2011-08-09

A look over the pond. While a police shooting may have been the ingition for these riots, I think the unemployment and the divide between the have and have nots (which is growing) is keeping fuel on the fire. Rioters need jobs, says Carpetright's Lord Harris "Lord Harris of Peckham, the chief executive of Carpetright, the store that was destroyed in the Tottenham riots on Saturday night, has called on the Government to do more to provide jobs for young people." "He said part of the cause for the violent scenes in London had been caused by youth unemployment." http://www.telegraph.co.uk/news/uknews/8689622/Rioters-need-jobs-says-Carpetrights-Lord-Harris.html To see how these riots (attacks) are not just in one or two spots click on the Telegraph Map link below. http://www.telegraph.co.uk/news/uknews/law-and-order/8689355/London-riots-all-incidents-mapped-in-London-and-around-the-UK.html China July inflation hits 6.5%, tops estimates "HONG KONG (MarketWatch) — Chinese consumer prices accelerated further to 6.5% in July from 6.4% in the previous month, official data showed Tuesday, beating expectations and keeping alive the prospect that Beijing may maintain a restrictive monetary policy." http://www.marketwatch.com/story/china-july-inflation-hits-65-tops-estimates-2011-08-08

If we go into another recession it will probably be a process just like last time. There will be conflicting data, some wild swings in both directions, more programs (QE?) and they will wait at least a year after the recession had started to tell us it had started. One of the reasons I have continued this thread and kept posting, even after the first recession was officially over was my belief that the US economy and a lot of the western world's economy is structurally damaged and may find it very difficult to ever return to 'what it use to be' without going through a full blown reset. How that happens I am not sure, depression, multiple recessions, a new currency, etc. But, I just don't believe most of the modern western nations can avoid a prolonged and/or acute economic readjustment that will not be pleasant. This doesn't mean the sky is falling, but it does mean we are living as a nation(s) above our means and that lifestyle must be adjusted.

Second-quarter U.S. productivity falls 0.3% Employees work more hours to push labor costs higher, data show "WASHINGTON (MarketWatch) — The productivity of U.S. businesses fell in the second quarter, the government said Tuesday, while first-quarter figures were revised lower to show a decline as labor costs accelerated." http://www.marketwatch.com/story/second-quarter-us-productivity-falls-03-2011-08-09-856360

This discussion is a MASSIVE one that has been touched on in this thread off and on. Its one of the those discussion that would be a challenge to have on forum site. Just setting the bases of the discussion (good vs bad) would be huge in itself. But, in my opinion I think we are starting to see what happens when 'bad' government and 'bad' private sector gets together. (under what I think is bad) This doesn't mean I think all is bad on either side, but there is enough of it going on that its starting to cause some serious structural issues.

Obama Voices Confidence in U.S. Credit, Blames 'Gridlock' for Downgrade Read more: http://www.foxnews.com/politics/2011/08/08/sp-downgrades-fannie-freddie-credit-ratings/#ixzz1USvsQ1KB I have been careful not to turn this thread into a political discussion. I am not a Republican or a Democrat. I think the reality of the situation (through all these different posts on this thread and much more) is both parties follow the direction of Wall Street. Back in 2008 the companies that became insolvent do to poor business decisions needed to go down. Instead we stepped in (FEDs and US Government) and transfered their bad debt onto the taxpayers. This didn't remove the bad debt it just moved it to a different location and now that debt load is weighing on the new 'owner'.

You're totally missing what I'm saying. The family's business IS the United States economy. This analogy doesn't make sense to people who have heard their whole lives that private and public sector activity is fundamentally different. The 'family business' is the US government. Not all the US businesses and their incomes. The real difference with the simplified examples was two main things: - the ability to print money - and the ability to collect and raise taxes. Dude you are totally on your own tangent now. You didn't even listen to what I said lol. If you say so. Just stating that the 'family business' in example is not the US economy.