ragerunner

This could turn out to be VERY interesting. Note: This is not meant to spur discussion about WikiLeaks in this thread. WikiLeaks plans to release a U.S. bank's documents "WASHINGTON (Reuters) - The founder of whistle-blower website WikiLeaks plans to release tens of thousands of internal documents from a major U.S. bank early next year, Forbes Magazine reported on Monday." "Asked what he wanted to be the result of the disclosure, he replied: "I'm not sure. It will give a true and representative insight into how banks behave at the executive level in a way that will stimulate investigations and reforms, I presume." "He compared this release to emails that were unveiled as a result of the collapse of disgraced energy company Enron Corp." "This will be like that. Yes, there will be some flagrant violations, unethical practices that will be revealed, but it will also be all the supporting decision-making structures and the internal executive ethos ... and that's tremendously valuable," Assange said." http://www.reuters.com/article/idUSTRE6AS68S20101129

Gramarye said - "As for the risks in the dollar's relative devaluation: in the short term, that may be true, but in the long term, a strong currency is a bedrock of a strong economy. Maintaining currency strength represents foregoing a transient measure of instant gratification in exchange for longer-term rewards. If inflating one's way out of debt was really a viable economic stimulus plan, Latin American economies would be the envy of the world." Brazil and China are all the rage in the economic world right now.

TARP was not the only issue. It was the FEDs (taxpayer) taking on a Trillion+ (I have seen numbers even higher) in bad paper from these institutions. I also think on of the biggest issues of all of this is the concept of risk being reduced in certain industries. That is no way to operate a 'free market'. Many health companies have been hurt by not allowing the health to grow/thrive and the insolvent to be removed. We have 'saved' may companies at the expense of other health ones that could have take over the market shares that the insolvent ones left behind.

That would have been a very risky play given the financial institutions which we would have let fail and the impact of those failure on not only our economy.... but the global economy as well. I just hope we don't find out that the approach we did take, of taking on all this debt and removing risk from the 'to big to fail' category, ends up looking a lot worse down the road.

If only the US would have done this. Instead, we have indebted the citizenry to save private enterprises and lined the pockets of Wall Street. Iceland Is No Ireland as State Free of Bank Debt, Grimsson Says "Iceland’s President Olafur R. Grimsson said his country is better off than Ireland thanks to the government’s decision to allow the banks to fail two years ago and because the krona could be devalued." “The difference is that in Iceland we allowed the banks to fail,” Grimsson said in an interview with Bloomberg Television’s Mark Barton today. “These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.” "Iceland’s banks, which still owe creditors about $85 billion, were split to create domestic units needed to keep the financial system running, while foreign liabilities remained within the failed lenders." http://www.bloomberg.com/news/2010-11-26/iceland-faring-much-better-after-permitting-banks-to-fail-grimsson-says.html

Another quick look across the pond. Wait until Portugal and/or Spain joins the party. Fresh market turmoil as British bank shares take pounding over fears Irish crisis will spread "Some £3billion was wiped off the value of RBS and Lloyds Banking Group yesterday over fears that the lenders are facing further heavy losses on their £53billion and £27billion respective loans in Ireland." "And investors took further fright as Ireland's shaky coalition government edged towards disintegration - raising fears that a critical four-year budget designed to tackle Dublin's colossal budget deficit will be vetoed by lawmakers." "So if the chaos continues to spread through Europe, we could have to bankroll other ‘basket-case’ economies such as Portugal and even Spain." "Experts have warned that the joint European and International Monetary Fund bailout package might have to be postponed, threatening the stability of the entire eurozone, after a snap general election was called in Ireland." Read more: http://www.dailymail.co.uk/news/article-1331979/IRELAND-BAILOUT-Fresh-market-turmoil-British-bank-shares-pounding.html#ixzz16DXOca9F

Looks like the housing bust and its accompaning mess will be with us for several years to come. This will definitely put a strain on any real economic recovery and a big strain on home prices. Fitch: Shadow Inventory Will Take 40+ Months To Clear "The non-agency shadow inventory will take more than 40 months to clear, according to projections from Fitch Ratings. The ratings firm pegs the shadow inventory for non-agency residential mortgage-backed security (RMBS) loans at 1.5 million. For all loans, the total is closer to 7 million. Fitch - which defines shadow inventory as the total number of delinquent loans, foreclosures and bank-owned properties - notes that fallout from foreclosure affidavit defects will elongate liquidation timelines and cause further buildup." http://www.mortgageorb.com/e107_plugins/content/content.php?content.7049 'Shadow' supply of 2.1 million homes potentially looms "This "shadow inventory" of residential real estate -- in which the property is either in foreclosure, has a loan 90 days past due or has been taken back by a lender and is not listed for sale -- stood at an eight-month supply at the end of August, according to the Santa Ana mortgage research firm CoreLogic, which released the data. That was an increase from 1.9 million, a five-month supply, a year earlier. The total number of U.S. properties listed for sale at the end of August plus the unlisted shadow inventory was 6.3 million, representing a 23-month supply of homes, according to CoreLogic, more than three times the amount considered healthy by economists." http://latimesblogs.latimes.com/money_co/2010/11/shadow-supply-of-21-million-homes-potentially-looms.html Speaking of home prices and decline in demand. U.S. new-home sales down 8.1% for October Median sales price plunges 14% to $194,900, government data show http://www.marketwatch.com/story/october-new-home-sales-down-81-us-says-2010-11-24 How far we have fallen from the boom? New home sales: Down 80% from the boom http://money.cnn.com/2010/11/24/real_estate/new_home_sales/index.htm?hpt=T2

U.S. retail sales climb 1.2% in October Sales of autos, building materials. online items drive increase "WASHINGTON (MarketWatch) — U.S. retail sales grew sharply in October, marking the fourth straight monthly gain, as consumers flocked to auto showrooms and made more purchases online. Excluding motor vehicles, however, retail sales rose a more modest 0.4%." http://www.marketwatch.com/story/retail-sales-in-us-jump-12-in-october-2010-11-15?dist=afterbell Only off by 26 points. Empire State Manufacturing Index Turned Negative in November "The Empire State Manufacturing Index, which provides a snapshot of a key U.S. economic region, jolted investors Monday. It took a surprising plunge to a minus 11.14 reading in November -- the index's first negative measure since July -- the Federal Reserve Bank of New York announced today. A Bloomberg survey had expected the Empire State index to dip to 15 in November from 15.73 in October. The index was at 4.14. in September. Readings above zero indicate manufacturing activity is growing; below zero, contracting." See full article from DailyFinance: http://srph.it/dzUGWf

Wall Street to American taxpayers in the 21st century. - Give me your TARP and I will give you financial engineering and my trillion plus bad notes. In all three examples there is one winner and one looser. The transfer of wealth continues onward and upward. Wall Street Collects $4 Billion From Taxpayers as Swaps Backfire "The subprime mortgage crisis isn’t the only calamity Wall Street created that’s upending the finances of U.S. states and cities. For more than a decade, banks and insurance companies convinced governments and nonprofits that financial engineering would lower interest rates on bonds sold for public projects such as roads, bridges and schools. That failed promise has cost more than $4 billion, according to data compiled by Bloomberg, as hundreds of borrowers from the Bay Area Toll Authority in Oakland, California, to Cornell University in Ithaca, New York, quietly paid Wall Street to end agreements since 2008." http://www.bloomberg.com/news/2010-11-10/wall-street-collects-4-billion-from-taxpayers-as-swaps-backfire.html

The Georgetown Plume Creek National Historic district is located west of Denver along 1-70 near the Eisenhower Tunnel. The town was established during the Silver Boom in Colorado in 1859. The Town's elevation is about 8,500 feet. A few fall pics from Golden Gate Canyon State Park just outside of Golden, CO.

Was able to find a new job before the old job went away. Had to move the family across the country but, income went up significantly, job stability increased and the amount of sunshine about doubled. So all in all, not bad. I have had a lot of friends in Florida, Ohio, Indiana and Colorado that have not been as fortunate.

Protectionism of internal employment and the ability to compete in the world markets is definitely growing. Will it just be more talk, or will someone finally start throwing toys in the sandbox at the other kids? Fed Global Backlash Grows China and Russia Join Germany in Scolding; Obama Defends Move as Pro-Growth "NEW DELHI—Global controversy mounted over the Federal Reserve's decision to pump billions of dollars into the U.S. economy, with President Barack Obama defending the move as China, Russia and the euro zone added to a chorus of criticism." http://online.wsj.com/article/SB10001424052748703514904575602820114533804.html?mod=mktw

It's a move in the right direction. We are still on a downward slope, with a growing unemployment number. But, the slope is not as steep as it was. Good news on payrolls isn’t good enough Commentary: Population is still growing faster than jobs are "WASHINGTON (MarketWatch) — Finally, the economy is starting to deliver some good news. Not great news, but good. After struggling through the summer, the labor market is strengthening again. Payrolls rose by 151,000 in October, the Labor Department reported, beating the economists’ predictions handily. What’s more, the job losses in August and September weren’t as deep as previously reported." http://www.marketwatch.com/story/good-news-on-payrolls-isnt-good-enough-2010-11-05

I guess last weeks headline, about the G20 promising no currency war, that Wall Street and the financial markets all cheered was a little premature. This could get ugly pretty fast. Its the battle to make your goods more affordable on a the world market. While the US has been devaluing its currency for some time now, Japan and China are king at this right now. Emerging market policymakers vow to combat Fed's QE2 SEOUL/BEIJING (Reuters) - Policymakers from the world's new economic powerhouses in Latin America and Asia pledged on Thursday to come up with fresh measures to curb capital inflows after the U.S. Federal Reserve said it would print billions of dollars to rescue the economy. "As long as the world exercises no restraint in issuing global currencies such as the dollar -- and this is not easy -- then the occurrence of another crisis is inevitable, as quite a few wise Westerners lament," Xia Bin, an advisor to China's central bank wrote in a newspaper managed by the bank. South Korea's Ministry of Finance and Strategy said it had sent "a message to the markets" on Thursday and would "aggressively" consider controls on capital flows while Brazil's Foreign Trade Secretary said the Fed's move could cause "retaliatory measures". http://finance.yahoo.com/news/Emerging-market-policymakers-rb-1608515460.html?x=0

For an economy that not in a recession, the FEDs sure act like that is not the case. Maybe its an illness that is much bigger and different than just a recession? Maybe the article Jeffery just posted above is touching on the bigger issue? If nothing else, the currency war just took a step forward. Fed to buy $600 billion in bonds to aid economy "WASHINGTON—The Federal Reserve announced a bold plan Wednesday to try to invigorate the economy by buying $600 billion more in Treasury bonds. The Fed said it would buy about $75 billion a month in long-term government bonds through the middle of 2011 to further drive down interest rates on mortgages and other debt. This is in addition to an expected $250 billion to $300 billion in Fed purchases over the same period from reinvesting proceeds from its mortgage portfolio." Read more: Fed to buy $600 billion in bonds to aid economy - The Denver Post http://www.denverpost.com/business/ci_16512900#ixzz14G6kr3mL

Trying to understand what you are saying. Yes, We are seeing about 450,000 new unemployment claims each month. I don't believe the economy is creating 450,000 new jobs each month. ADP doesn't show that and the government numbers don't show that. By what I see in the data, we continue to have more and more unemployed people each month in the US. What I am hoping for the ADP and other stats is the amount of people that are joining the unemployment ranks each month are starting to decline. But, at this rate we are still going deep into the unemployment hole, just at a slower rate. I think we are probably saying the same thing?

Some positive news. Private sector October job growth beats expectations "NEW YORK (Reuters) – U.S. companies added to payrolls more than expected in October, slightly boosting optimism about the job market ahead of Friday's government employment report. U.S. private employers added 43,000 jobs in October compared with a revised loss of 2,000 jobs in September, payrolls processor ADP Employer Services, which developed the report with Macroeconomic Advisers LLC, said on Wednesday." http://news.yahoo.com/s/nm/20101103/bs_nm/us_usa_economy Of course the unemployment numbers continue to grow by about 400,000 a month, even with this job growth.

At the minimum, this should be seen as a warning shot to the 'To Big to Fail' crowd or this could be step one setting into motion some future actions on these instititutions. Could only hope. New Rules on Bank Breakups FDIC Expected to Use Discretion to Rank the Creditors; That Can Be Tricky "The Federal Deposit Insurance Corp., as part of a proposed rule, is expected to say that all creditors of large, nonbank financial firms should expect losses in a failure, according to people familiar with the government's plans. The rules are part of a broader effort to end the era when certain institutions were judged "too big to fail" because the government had no orderly way to dismantle them." http://online.wsj.com/article/SB10001424052748704011904575538483479899308.html

Something tells me the rise in income, in August, do to the return of umeployment extensions didn't equate to much of a rise in consumer spending (expect for gas and food). September consumer spending weakens while incomes dip "Americans slowed their spending in September to the weakest pace in three months and their incomes fell for the first time in 14 months. Personal spending rose at an annual rate of 0.2 percent in September, the Commerce Department said Monday. That's below the 0.5-percent gains recorded in July and August. Incomes fell 0.1 percent in September, following a 0.4-percent rise in August that had been pushed higher by the return of extended unemployment benefits." http://www.ibj.com/september-consumer-spending-weakens-while-incomes-dip/PARAMS/article/23158

Due to us being part of a global economy, I think we have a very good chance of seeing stagnation or decline in wages over the next decade that will be accompanied by noticable inflation in items like food, oil, energy, etc (this might happen due to the decline in the buying power of the dollar). With deflation continuing in things like housing and property values (residential and commercial). It could be a very nasty mixed.

I still find it surprising that the 'experts' and the 'media' find this type of news unexpected. I realize we have talked about a lot of different forces at play, many of them for several years now, that have put a lot of pressure on the US economy. But at its simplist form, the US consumer is generally broke, highly leveraged, has falling or stagnate wages and many are unemployed or under employed. This makes current home prices, on average, still out of balance for consumer affordability. Even with some of the lowest interest rates in history, we still have afforablility issues. Add in the data showing that many of the next 'buying' generations (X and Y, etc) are struggling to find good paying jobs out of college, are heavily in debt with college loans and are starting to challenge the concept that the American dream is owning a house and the future supply and demand chart just keeps looking sicker and so does prices. Market Alert: Clear Capital Reports Sudden and Dramatic Drop in U.S. Home Prices "First Index Report for October Shows a Two-Month 5.9% Price Decline Representing a Magnitude and Speed of Decline Not Seen Since March 2009; Similar Declines Expected to Appear in Other Industry Indices in Coming Months" http://finance.yahoo.com/news/Market-Alert-Clear-CapitalTM-iw-2539670557.html?x=0&.v=1

We promise, to not promise, we will not take actions that is designed to focus on our economy and job growth. But, it makes for great headlines. G20 vows to avoid currency war "In a final statement after two days of heated negotiation, the G20 said it would “move towards more market-determined exchange rate systems” and that the International Monetary Fund would “deepen” its supervision of exchange rates." While several member countries of the G20 hailed the summit in South Korea as a success, Japan immediately broke ranks to declare that, contrary to the spirit of the communique, it would continue to devalue the yen if it saw fit. “There was a criticism of the American policy of creating more liquidity,” said Rainer Breuderle, the German Finance minister. “I tried to make clear that I regard that as the wrong way to go. An excessive, permanent increase in money is, in my view, an indirect manipulation of the [exchange] rate.” http://www.telegraph.co.uk/finance/economics/8082701/G20-vows-to-avoid-currency-war.html

China just increased rates to slow growth and inflation. These types of actions also have the potential to affect the US exports business as well. Speaking of exports and trading partners. Some UK news. Danny Alexander reveals 500,000 job cuts in document gaffe "It revealed that the Office for Budget Responsibility had forecast a reduction in public sector workforce numbers of 490,000 by 2014-2015." http://www.telegraph.co.uk/news/newstopics/politics/liberaldemocrats/8073943/Danny-Alexander-reveals-500000-job-cuts-in-document-gaffe.html Defence review: David Cameron says 42,000 jobs to go "David Cameron, the Prime Minister, has disclosed that 42,000 defence jobs in Britain will go as part of 8 per cent budget cuts in the strategic defence review." http://www.telegraph.co.uk/news/newstopics/politics/defence/8073455/Defence-review-David-Cameron-says-42000-jobs-to-go.html

Hts121, I think its is valuable, on this thread, to have a lot of different view points and knowledge. I do believe these economic challenges are not over, so I do continue to post concepts, articles and data that I believe show the fat lady has not sung yet. If you have a different view point or other information to show things are different, I hope you do post them. It gives us all an opportunity to discuss different concepts and issues and hopefully gain a better understanding of our economy and world.

We have discussed the concept of 'currency wars' and how that is/can affect the US and its economic state. Europe is having more and more unrest in many nations and a lot of it has to do with jobs, debt and the inability to generate increased income for its citizens. One action that a nation or nations might take to try and stimulate job growth is to devalue their currency so that their goods are potential cheaper on the world market. Japan is doing this in a big way and China is not willing to revalue the Yuan for the very same reason. Looking at these types of internal events in different nations can give insite into what pressures may be in play related to future economic decisions. Japan and China's continuing attempts to keep their currencies down are clearly affecting the ability for the US to create jobs to releave the unemployment rate and in turn, stabilize the supply and demand issue for housing. Its a world economy. But that is not what the article discusses and certainly is not the parts you chose to highlight. The article is about an internal debate in France regarding the governmental set age of retirement and the protests that have ensued in France following the proposal to raise that age by 2 years. It has relatively little to do with the "U.S. Recession" even if we are living in a world economy. You are entitled to your opinion. I highlighted the part that if they didn't take some type of action the system could become bankrupt. This means that their debt levels are not sustainable nor do they believe that the current working class (employment) can sustain this debt level. If you look back at my other posts that have I done related to these world events, including the IMF warnings about a global 'currency war' you would see how these items are connected and how I have connected several times these events. Since I had already posted these concepts several times I didn't feel the need to say it again. Until you asked. One of the main issues I have been focusing on lately is the idea that the bank crisis is receeding some and now many nations, including the US, are starting to focus on the new crisis, jobs and debt. These types of events in France and others that have been taking place clearly show a growing need in many countries to start addressing these types of concerns, sooner than later. This has lead the IMF and others to release strong statements that they see a growing potential for a global currency war. Such events clearly can and would affect the US economy, employment numbers and ultimately housing. I would make the case current events with China, Japan and others are doing many of these things right now and are affecting the US's ability to improve its employment picture. Until the US is truly able to improve the employment picture (including balancing cost of living with income - Up or down) housing is going to struggle to get out of the basement. Currency pricing clearly affects a country's employment picture. If you don't believe in these ideas, that fine, everyone is entitled to their view point.